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Semana santa also tends to be one of the occasions when heaps of Mexicans feel drawn to the beach. When asking students every now and then what they’re going to do during semana santa, eight out of ten respond that they’re going to the beach. You’ll find them on beaches all over the place like Cancun, Acapulco, Manzanillo, Mazatlan, Puerto Vallarta....Add to them in your imagination students from the United States who are on Mexican beaches for spring break, and you’re starting to understand why yours truly feels rather disinclined to join the crowd on the beach. That combination of alcohol, clubbing and sex before collapsing lost its appeal to me quite a while ago. The priorities of a junior elder in Colima look a little different to my priorities during my wild days in Africa. Investment In Art Since shifting into college teaching in the less developed world, my priorities have shifted to – among other things – sussing out emerging markets and investments off the beaten track. You’re aware by now of my increasing interest in the commodities market. The bull market for stuff that you can drop on your feet appears to be in full swing. However, one sector of that market hasn’t managed so far to attract a bunch of attention. It may be the right time to chat a little about it. I’m rambling about art investment, in particular art funds. For quite a while, investment in fine art seemed to have been reserved for the extraordinarily affluent – e.g.oil honchos. About a year ago, Picasso’s “Garcon a la Pipe”sold for US $ 104,-- million, setting a new record at an art auction for an individual piece of art. This sort of money indicates that the art market is heating up again. To attract the interest of folks who don’t have that sort of money available, various financial honchos have set up art funds. These art funds are run more or less along the lines of hedge funds, private equity funds and mutual funds. In case you wonder what yours truly reckons about this sort of thing, I’m inclined to be a little sceptical. The reasons for my being reserved? First, the art market is characterised by high transaction costs and low transparency. That’s already reason enough for me to keep a healthy distance. Second, to quote my favourite financial column, which is Buttonwood on the website of The Economist:”....this market....is virtually unhedgable”. By the way, there’s a reason why I’m fond of reading Buttonwood. The author tends to display a healthy contrarian attitude and lived in some exotic places. She seems to tick a little like me. Anyway, there’s
another reason why my enthusiasm for this sort of thing deserves to be
characterised as underwhelming. Investors’ money in these funds is frequently
locked up for about ten years, which means art funds with that sort of
time frame don’t offer shiploads of flexibility, so to speak. We may put
it like this. It’s comparatively easy to have cash available when loads
of folks have cash available. But it’s more important to have cash available
when heaps of folks are broke. In that situation you can buy bargains.
Even though I can’t claim to be an exploration geologist, it looks as if discoveries continue to be made. Just look at more or less recent discoveries, and you see what I’m rambling about. Completely new ore zones have been discovered – among others – in Concepcion del Oro (1996, 2001), Dolores (1996) and San Martin – Sabinas (1996). Completely new districts have been discovered – among others – in San Sebastian – Saladillo (1996) and Platosa (2001). In a nutshell, Mexico still looks like fertile ground for investing in silver exploration. Latin America And The IMF Even though I don’t tend to read the Wall Street Journal, a while ago I stumbled across an article in the Wall Street Journal that’s worth chatting about. The article deals primarily with the International Monetary Fund (IMF) and its economic prescriptions for Latin America. According to that article, the IMF reckons that Latin America needs to strenghten financial regulation (including insulating central banks from political pressure) to improve economic growth. Joseph Stiglitz, who won the Nobel Prize in economics and was the World Bank’s chief economist in the late 1990’s retorts to these IMF proposals:”What a whitewash....the IMF was part of the problem”. When I read Joseph’s remarks I was wondering along the lines “what problem”. Eventually I found the answer in Fortune, which I usually don’t read either. According to what I read there, more than fifty percent of the less developed countries borrowing from the IMF between 1965 and 1995 were no better off than when they started with the IMF. About thirty percent were worse off. Most of these countries were more indebted. All this makes me wonder now whether the world really needs an outfit with that sort of underwhelming track record. Everybody may be better off if the IMF is going to be abolished. Now wait a second. I’m not saying that everybody is better off with the IMF abolished. I’m only saying may be. We better leave the issue open here. On the other
hand, the former German executive director for the World Bank, Fritz Fischer,
has come up with a different idea. His idea boils down to merging the IMF
and the World Bank. His main argument for a merger is that both Bretton
Woods institutions provide financial resources to the same sort of clients,
developing countries and countries in transition.
In my humble opinion, we better forget about merging the two Bretton Woods institutions. In case mankind really needs the IMF – which I’m not entirely convinced of – a few changes at that outfit may be worth mulling over. These changes may reduce the rate of unnecessary casulties in the less developed world. The following is a list of articles written by Jurgen for the magazine:
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Some
Thoughts On Living In Latin America ~ 