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Great blog, written by a wise man living in China

Jonathan (Jono) Warren is a friend of mine who is currently living in Beijing, but is moving to Kashgar, Xinjiang. You know the place where all the riots occurred a little while ago. He is beginning a tea business, where he will be importing Pakistani tea into China, packaging it in China and then selling it to super markets in the West.

Sounds crazy right? Well, regardless of your thoughts of this brief description of his business, the man is quite well read and paints a incredible story with his words… which you can find at his blog Garbage and Noodles (http://garbageandnoodles.blogspot.com/)

Here is a small excerpt from his most recent post “I sing, you sing, we all sing

Up in Changbaixian, Liu Baiguo was that grower. The owner of a local Chinese-medicine shop (???), recommended Mr. Liu as his farm was the closest to the city, but produced some of the best ginseng. Liu walked into the shop and asked for the ones who were looking for him. He seemed genuinely excited to be able to show his roots to two bright-eyed American entrepreneurs.

He led us out of the shop, out of the marketplace, and into his car – a police car that he got to keep after his work as a chinese border customs official. At his fields, he told us everything he knew about ginseng, how he inherited his fields, how there are 92 workers working for him, how he plants trees on the plots where the ginseng is picked because the roots use up all the nutrients…

Click here to read more

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The return of China South America

?? ?? (hello friends),

China South America will be returning to cyber space tomorrow, Aug 11, 2009.

I apologize for the recent absence of updates, I have been traveling in China where access to sites such as this is limited.

We’ll return to China South America’s usual mix of current events relating to China & South America, commodity markets, micro finance and of course my own analysis and writing on the world.

~ Benito

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Good overview on Latin America and the econ crisis

Latin America and Brazil – On Economics and Politics, a blog/site I
have mentioned before on ChinaSouthAmerica ran a great overview
yesterday of how Latin America has handled the current global economic
crisis.

FX Perspectives in Latin AmericaIn contrast to Emerging Europe, Latin
America has emerged out of the crisis as more resilient. This is so in
part because of flexible exchange rates, lower leverage than Emerging
Europe and better macro conditions.

In fact, some countries in Latin America are implementing counter
cyclical fiscal policies to fight the external crisis. The key
countries using counter cyclical fiscal policy in Latam are Brazil,
Peru and Chile. This differentiation adds to the perception that Latin
American credit ratings lag other emerging markets and the near-term
prospects for rating actions in regards to several regional countries
on the cusp of an investment grade including Brazil, Colombia, Panama,
Peru and Costa Rica point to the upside.

Regarding growth, we believe GDP will converge to its potential level
by mid 2010. In the absence of significative inflationary pressures,
it is hardly possible that monetary authorities in key Latam countries
hike rates until Q2 2010. In turn, it is possible that FX play an
imoportant role especially considering that moderate growth rates may
also induce central banks to become more tolerant with eventual
currency weakness.

To read more from Victoria, check out this post at her site located at
http://brazilandeconomics.blogspot.com/


Sent from my mobile device

Benito
International Trade Consultant
Mir Global Marketing LLC
http://www.mirglobalmarketing.com
http://www.chinasouthamerica.com

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Current Situation in Honduras

Today, I present to all readers, Pamela Fernandez, a university colleague of mine from Honduras who was nice enough to email me a incredibly well articulated analysis of the situation going on down in Honduras. The original message arrived in my mail box last night at 1:18 am, June 29, 2009 – Eastern Standard Time.

Pamela writes:

I feel the media has done a terrible job in reporting the events that took place yesterday in Honduras. A friend of a friend mainly wrote the following 8 points. I have edited them out a bit and added the translation of the constitution article. Below you’ll find my views.

1. The event this morning should be taken as an arrest against a Honduran citizen, Manuel Zelaya, who broke the constitutional Honduran law in multiple occasions over the last few days. This SHOULD NOT be taken as a Coup d’état.
TRANSLATION – Article 239.- The citizen that has been the head of the Executive Branch cannot be President or Vice-President again.

Whoever violates this law or proposes its reform, as well as those that support such violation directly or indirectly, will immediately cease in their functions and will be unable to hold any public office for a period of 10 years.

2. The vast majority of Hondurans firmly oppose Manuel Zelaya and are in favor of his arrest.

3. The current news being portrayed in international networks appear to be heavily tilted toward a contrarian view of most Hondurans.

4. The majority of Hondurans are not in favor of Manuel Zelaya and are extremely proud of our congress and military for their stance in favor of democracy and peace.

5. The events happening today were caused by an attempt by Manuel Zelaya to manipulate our country and its constitution to fulfill his ultimate goal of remaining in power indefinitely.

6. The world should be proud of Honduras as we are the first Latin-American country to stand against a tyrannical leader who has tried to topple democracy and peace in our country.

7. Declarations made by Hugo Chavez should be discredited immediately. He should, as President Obama said, allow Hondurans to solve this issue through open communication following LEGAL processes.

8. It is ONLY in the interest of Honduras and its citizens that democracy prevails.

Now mine:

Facts:
• The economic growth the country experienced in 2006 was a result of the previous government not of Mel’s. The country is now in as much debt as it was before. After a GDP growth of 6% in the 2005, according to the World Bank it is expected to fall to about 2% in 2009.

• In December 2008, Mel decided to raise the minimum wage by 60% against the economists and private sector advice. The government itself will not be able to pay the public employees including teachers and doctors next year. It has resulted in a higher than unemployment rate and it is expected to rise even more in 2010.

• The public higher education system cannot afford to pay the university professors under the new minimum. The professors went on strike for two months and the issue still undresolved.

• After the recent earthquake Mel denied the severity of the damages in port city of Puerto Cortes and never declared a state of emergency in the country. In previous years, he had also undermined the impact of floods and hunger stricken south.

• There were no reported cases of swine flu in Honduras before the OAS summit in San Pedro Sula. Once the summit was over the cases jumped from 0 to 118 as confirmed by the BBC. But the Health Ministry says there are 1,000 cases.

• According to the Observatorio Centro Americano de la Violencia, the there are 42 homicides per 1,000 inhabitants; the international rate is 8.8. In average, there are at least 12 violent deaths per day, the highest in Central America.

• According to the 2004 World Bank report, 50% of the population lived under the poverty line and 36.2% below the extreme poverty line 36.2%. The World Food Program estimated it at 73% in 2008; currently the BBC reports a 70% in the country profile.

• The country’s budget for the 2009 fiscal year was never made, some argue there’s no money and that’s why Mel would not make it.

• No body really knows how many millions of Lempiras and possibly dollars were spent on publicity for the referendum.

• Mel was paying people to vote “Yes” in the referendum.

• Hugo Chaves, Correa, Elbo and Ortega are currently in Nicaragua holding an emergency meeting of the ALBA and Central American nations. Chavez said that he would respect Honduras’ sovereignty and would not make a military intervention.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Rumors:

• The referendum materials were sent from Venezuela.

• Mel would have done an “auto” Coup against the congress and the military today if the Public Ministry (not the military) had tried to stop the voting.

• Based on a reported increase flow of Nicaraguans into Honduras: hundreds of Nicaraguan soldiers crossed the border on Friday and Saturday disguised as civilians.

• Chavez is planning to do a military intervention in Honduras. Still, his discourse last night was borderline offensive.

All that said, the president of congress Roberto Micheletti was sworn as interim president promising and making it a decree to hold the general elections on November 29th as scheduled and give the power to the elected president on January 27th. The military is not in power, they just did their job and defended the constitution.

Of course, there are plenty of sketchy things in the whole process. For example, Mel’s resignation letter, which he denies writing, the fact that Micheletti was running for president but lost the primaries are just a few; and the fact that TV, radio, and internet were cut in the main cities for couple of hours during the coup. Also a fact, not every Honduran likes Micheletti but not every Honduran likes Mel. We are trying to pick the lesser of 2 evils.

I’m not against the citizens’ right to give their opinion in the referendum but the Electoral Institute was not supervising it. I, as are many Hondurans, am aware of the social injustice and the extreme poverty in my country. We feared and questioned the transparency of the process. We also believe, and know, that Mel was acting on his interest and not that of the country.

I’m not happy that we have come to this but now we can only wonder what would have happened if Mel had gone ahead with the referendum. From my point of view, the assurance of elections in November makes this a move in favor of democracy and not one against it. Sadly, the international community does not see it this way. The UN, OAS, EU and US want Mel back because he was democratically elected, Honduras doesn’t want him back because he was trying to interrupt the democratic process by staying longer as a president.

Honduras is in peace right now, nobody died, very few were hurt, after some riots by Mel’s supporters yesterday there’s no civil unrest. The curfew is not against civil liberties it is meant to prevent riots and such from happening. In case that rumors are true and Hugo Chavez tries to use military force in Honduras, we hope and pray… I hope he doesn’t and hope we can get back solving the real problems of the country.

The good thing in all of this? I want to believe that Hondurans will wake up and take a more active role in politics. That hopefully the corrupt politicians will take a hint and realize that the “people” as Mel said can stand up against them when need it.

If you read this much, THANK YOU very much,

Pamela Fernandez is graduate of American University who specializes in visual media and film studies. You can learn more about Pamela and see some of her work at her personal site — http://www.pamelafer.com/

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Peruvian Ambassador enlightens the U.S. with his overview on recent conflict in Bagua

June 18, 2009 Op/Ed Excerpts, Peru 1 Comment

Peru’s Ambassador to the United States presented his overview of the recent clashes / massacre / protests (depending on what you call it) in the Peruvian Amazon to The Council of the America’s today in Washington D.C.

The Council of the America’s summarizes this wonderful treat from Peruvian Ambassador, Luis Valdivieso as follows:

Security forces clashed with indigenous groups protesting the development of ancestral lands for oil and natural gas extraction in recent week. The ambassador provided an overview of the current situation, discussed Peru’s legal framework for sustainable development, and highlighted actions taken by the government toward a long-term solution, including the decision to postpone the implementation of land-use laws. He noted that a permanent solution must include dialogue with indigenous groups, the participation of civil society, and respect for democratic principles.

Click here to view/ download a PDF of the PowerPoint show Luis Valdivieso must have used when giving his presentation. I don’t believe you will need his assistance in narrating the slide show.

A interesting download and read for readers not too familiar with the geopolitics of Peru. However, if you are looking for the real deal on the situation down in the Peruvian Amazon, I would not get your hopes up.

The PDF is full of fancy graphics from INEI, the National Institute of Statistics of Peru. The problem is that INEI no longer produces legitimate economic data, as Otto from IncaKolaNews and Farid Matuk explain in their respective web sites.

Farid Matuk if you didn’t know was the old head of the office until President Garcia replaced him with some of his loyal chronies. You can read more about how the government replaced him and how he is now accusing the goverment of persecution in this article (in Spanish), from the usually very pro-government Lima newspaper, El Comercio.

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How much of this map will be red when The Economist does a story on this in 20 years?

Oil and land rights in Peru — Blood in the jungle

FOR seven weeks tens of thousands of Amazonian Indians blocked roads and rivers across eastern Peru. They seized hydroelectric plants and pumping stations on oil and gas pipelines to try to force the repeal of decrees facilitating oil exploration

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Massacre in the Peruvian Amazon

My own personal analysis and more in depth coverage to come tomorrow. Had a very hectic day that kept me away from posting on this, very relevant and important story to get out to the world.

For now, if you have yet to read… please check out some of the following sites.

1. Peruanista — Gives a summary of all major news sites, from AP, to Reuters to Al Jazeera

2. IncaKolaNews

3. United Nations

The Chair of the Permanent Forum on Indigenous Issues (UNPFII) expresses her shock and deep distress at reports received of atrocities committed starting 5 June against indigenous peoples in the Amazon region, resulting in the loss of lives, disappearances and grave injuries. The Chair sends her deepest condolences to the families of the victims. The Chair calls upon the Peruvian Government to:

* Immediately cease all violence against indigenous communities and organizations,
* Ensure immediate and urgent medical attention to the wounded and assist the families of the victims,
* Abide by its national and international obligations regarding the protection of all human rights, including the rights of indigenous peoples and human rights defenders, especially their right to life and security.

Victoria Tauli-Corpuz

President
United Nations Permanent Forum for Indigenous Issues

4. Reuters

By Marco Aquino – Reuters

TARAPOTO, Peru June 6 (Reuters) – Hundreds of indigenous protesters were holding 38 police hostage early on Saturday in Peru’s Amazon jungle after fights between tribes and police killed up to 33 people in the worst violence of President Alan Garcia’s government.

Demonstrators also were threatening to set fire to an oil pumping station of state-owned Petroperu unless the government told police to halt efforts to clear weeks of blockades of roads and rivers that have hurt food and fuel supplies.

Tribes, worried they will lose control over natural resources, have protested since April to force Congress to repeal new laws that encourage foreign mining and energy companies to invest billions of dollars in the mostly pristine rainforest.

Violence broke out on Friday as police tried to disperse a roadblock on a stretch of highway called “Devil’s Curve” in the Bagua region of Amazonas province, about 870 miles (1,400 km) north of Lima, the capital.

Indigenous leaders said at least 22 protesters were killed. The government reported the deaths of three protesters and 11 police officers, some from spear wounds. At least 100 people were injured and more conflict appeared possible.

Click here to read the full article from Reuters

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The only fundamentals improving are commodities

Jim Rogers makes an real life appearance on CNBC and talks to the masses of finance news junkies in the United States.

CNBC’s website is bombarding readers with articles about this Jimmy Rogers interview. If you follow this site, or if you happen to keep your eyes and ears open for Jimmy Rogers in your daily information news sessions, you know he really is not saying anything he hasn’t said before.

Basic conclusion – when the reality of printing so much cash catches up with the major economies of the world, people are going to realize their stock gains are in worthless, debased currencies. When this happens, hard assets and the companies producing them will flourish. Demand for copper and steel are not going to disappear, but is just may greatly diminish for U.S. Bonds and Dollar assets if hyper inflation hits.

Get the picture?

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Jim Rogers: Profit from commodities, currencies and bonds in times of crisis

[youtube=http://www.youtube.com/watch?v=K-EL-AhkFME&hl=en&fs=1&color1=0x2b405b&color2=0x6b8ab6&border=1]

Can’t seem to find part 2. Rogers covers his general view of where markets currently are and where he’s putting his money right now.

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Weekend Newswire: Latin America

OAS can’t agree on Cuba, while Havana ridicules the organization
The task force created by the Organization of American States, OAS, in an attempt to bridge different members’ proposals to consider the readmission of Cuba seems to have stalled with the main actors clearly underlining their stance.

Colombia Cuts Benchmark Lending Rate to Record Low 5% to Stimulate Growth
Colombia’s central bank cut its benchmark interest rate to a record today and signaled it’s ready to lower it further in an effort to ward off an extended recession as inflation eases

Braskem Taps Peru, Venezuela in $3.6 Billion Expansion Outside of Brazil
Braskem SA, Latin America’s largest petrochemicals producer, plans to invest $2.5 billion in a polyethylene plant in Peru, said Cleantho de Paiva Leite, Braskem’s director of international projects.

Sao Paulo-based Braskem, which holds a 50 percent share of Brazil’s resins market, also is working on engineering studies for a $1.1 billion petrochemical plant in Venezuela with state- owned Pequiven SA, de Paiva said in an interview in Lima.


Venezuela Expropriations: Chávez Talks Himself into Trouble with Argentina’s Fernández de Kirchner

The spark for the conversation sought by Fernández de Kirchner was a remark Chávez is reported to have made in private to Brazilian President Inacio Lula da Silva. That remark, it’s said, was to the effect that Venezuela was on course to take over foreign companies except for Brazilian ones.

President Hugo Chávez’ strategy of nationalizing companies including foreign ones, and a remark he did or did not make in seriousness to Brazilian President Ignacio Lula da Silva, appear to have posed problems for him and his Argentine friend and colleague, Cristina Fernández de Kirchner.

Chávez has depicted Fernández de Kirchner as an ally and soulmate in his bid to build a regional alliance to counter what he sees as the undue influence and power of the United States in Latin America. But his peremptory takeover of steelmaker Sidor and his tendency to talk off the top of his head may well have put her in between the proverbial rock and a hard place at home.

Argentina May Be Sanctioned By Manhattan Judge in Bondholder Litigation
Argentina may be sanctioned for failing to comply with a U.S. court order to turn over to bondholders documents regarding its pension funds, a federal judge in Manhattan said.

U.S. District Judge Thomas Griesa ruled in October that Argentine pension funds nationalized by that country’s government and held in the U.S. may be used to satisfy bondholder judgments against the republic. Argentina has appealed. Griesa later ordered the South American nation to turn over documents related to its pension funds to bondholders.

Argentina’s Construction Activity Declined 5.5% in April From Year Earlier
Argentine construction activity fell the most in five months in April, as Argentines delayed investment plans amid the global financial crisis and political concern ahead of next month’s mid-term elections.

Mexico GDP to Sink Most Since 1932 in Fall `Hard to Fathom,’ Goldman Says
Mexico’s economy will contract this year by the most since 1932 as a slump in the U.S. curbs demand for exports and slows dollar flows from tourism and remittances, Goldman Sachs Group Inc. said.

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