Emerging markets are emulating the US by encouraging their citizens to borrow, spend and become debt slaves. This is a bad idea that will cause immense pain
One of the big advantages of being a Latin American or Asian country used to be — somewhat counter-intuitively — the lack of credit available to most citizens. The banking system in, say, Brazil or Thailand simply wasn’t “advanced” enough to offer credit card, auto, or mortgage loans on a scale sufficient to turn the locals into US-style debt slaves.
But that, alas, is changing as those countries adopt their rich cousins’ worst habits.
Brazil, for instance, was once seen as a Latin American success story and future world power. But then it ramped up government spending and started encouraging its people to become “consumers.” And the rest is familiar, if depressing, history.
The following article is from 2015, about the…
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