{"id":11522,"date":"2015-08-27T07:24:16","date_gmt":"2015-08-27T12:24:16","guid":{"rendered":"http:\/\/olduvai.ca\/?p=11522"},"modified":"2015-08-27T07:24:16","modified_gmt":"2015-08-27T12:24:16","slug":"trouble-south-of-the-border","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=11522","title":{"rendered":"Trouble South Of The Border"},"content":{"rendered":"

Trouble South Of The Border<\/a><\/h3>\n
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Mexico’s vulnerabilities pose a huge risk to the U.S.<\/strong><\/div>\n<\/div>\n<\/div>\n<\/div>\n

Too big to fail is a seven-year phenomenon created by the most powerful central banks to bolster the largest, most politically connected US and European banks. More than that, it\u2019s a global concern predicated on that handful of private banks controlling too much market share and elite central banks infusing them with boatloads of cheap capital and other aid. Synthetic bank and market subsidization disguised as \u2018monetary policy\u2019 has spawned artificial asset and debt bubbles – everywhere. The most rapacious speculative capital\u00a0and<\/em>\u00a0associated risk flows from these power-players to the least protected, or least regulated, locales.<\/p>\n

The World Bank and IMF award brownie points to the nations offering the most \u2018financial liberalization\u2019 or open market, privatization and foreign acquisition opportunities. Yet, protections against the inevitable capital outflows that follow are woefully inadequate, particularly for emerging markets.<\/p>\n

The financial world has been focused largely on the volatility of countries like China and Greece recently. But Mexico, the third largest US trading partner (after Canada and China), has tremendous exposure to big foreign banks, and the largest concentration of foreign bank ownership of any country in the world (mostly thanks to NAFTA stipulations.)<\/p>\n

In addition, the latitude Mexico has provided to the operations of these foreign financial firms means the nation is more exposed to the fallout of another acute financial crisis (not that we\u2019ve escaped the last one).<\/p>\n

There is no such thing as isolated \u201cBig Bank\u201d problems. Rather, complex products, risky practices, leverage and co-dependent transactions have contagion ramifications, particularly in emerging markets whose histories are already lined with disproportionate shares of debt, interest rate and currency related travails.<\/p>\n

Mexico has benefited to an extent from its proximity to the temporary facade of US financial health buoyed by Fed policy, but as such, it faces grave dangers should any artificial bubble pop, or should the value of the US dollar or US interest rates rise.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n

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Trouble South Of The Border Mexico’s vulnerabilities pose a huge risk to the U.S. Too big to fail is a seven-year phenomenon created by the most powerful central banks to bolster the largest, most politically connected US and European banks. More than that, it\u2019s a global concern predicated on that handful of private banks controlling […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[124,7223,2384,1784,303,418,1154,517,534,805,834,888],"class_list":["post-11522","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-cheap-credit","tag-elite","tag-exports","tag-fed","tag-imf","tag-interest-rate-policy","tag-mexico","tag-monetary-policy","tag-trade","tag-us","tag-world-bank"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11522","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11522"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11522\/revisions"}],"predecessor-version":[{"id":11523,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/11522\/revisions\/11523"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}