Brazil never learns from its boom-to-bust cycles, which are tied to commodity cycles. John Lyons and Paul Kiernan of the WSJ write,
How Brazil’s China-Driven Commodities Boom Went Bust
Developing nation’s big bet on China turns sour as China’s appetite for exports dims; ‘looking at a lost decade’ As the title explains, the phenomenon is not exclusive to Brazil, but repeats itself in the whole of Latin America.
Brazil fell under what some economists call the “resource curse,” a theory describing how countries with abundant natural resources sometimes do worse than countries without them. The idea is that the money from commodity sales can lead to overvalued currencies and shortsighted policy-making, leaving such countries badly exposed when the resource boom finally ends.
Read the whole sad story, which ends with,
Even now, Brazil is looking to China for help.
In that, again, the hemisphere is never learning. Even Chile, Colombia and Peru, who have free-trade deals with the U.S. and EU, are now looking at moves that hinder their economies.
Sing it, guys!