Monday, December 26, 2011

Debt adjustment is painful - ask Latin America

"They don't know how to suffer" Ernesto Zedillo, former president of Mexico.

Latin America has gone through debt crises and hyperinflation. It has seen "lost decades". The process that surrounded these debt crises seem to be playing out in Europe. There is the period of "extend and pretend" but ultimately we get to the point that there is no success without pain. Europe may not be able to take the pain so the final solution may be much worse.

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