A Latin American Century?
I happened to see a reference about a week ago that the stock market of Mexico was doing rather well, along with many other stock markets south of the US and Canada in Latin America. Before I take a direct look at those price patterns, here is some background context of social commentary.
While violence in Mexico has received significant attention in recent years, I have never really thought much about it at all before. I’ve been to Mexico only for a few days and it seemed quite safe at the time, at least where I was, though people there did seem to drive with less compliance with traffic regulations (though maybe that was just the drunk teenagers vacationing from Arizona).
When living in northern Arizona (as well as Virginia and Florida), I had very little awareness of Mexico or the international border issues of southern Arizona (and southern borders along California, Texas, and New Mexico). In fact, I do not have much more personal awareness now, even living in the area of greater Phoenix.
So here is my brief commentary. I’m not a student of the details of the trends in Mexico, but I am an analyst of trends in behavior. Increasing violence in Mexico is an obvious sign of decreasing “social mood.” However, from low points in social mood, increases tend to follow. Increases in social mood produce increasing stability of social patterns and institutions, increasing business activity (including from international investors), and increasing wealth, like relative to the rest of the planet.
The article I read a week ago was featuring Southeast Asian stock markets. I was researching them because of my firm expectation that certain developing nations and so-called “emerging markets” currently offer better opportunity than most developed nations. In particular, markets in Southeast Asia (such as India, Pakistan, Indonesia, Malaysia) as well as Taiwan, Korea, and even Jordan are geographic regions that may offer far greater long-term profit opportunity than North American or European stock markets, which I expect to collapse in coming months. Not only do I expect stock markets in the US to plummet, but social mood in general. (By the way, as social mood goes, stock market prices tend to follow, as well as things like violence including war).
For instance, note that the US military dramatically increased military operations in Afghanistan and Iraq during and just after the 46% US stock market decline from 2000-2002. I just a moment ago was surprised when I saw a trend chart of the US military fatalities in Afghanistan since 2001, which show a clear trend of consistently increasing US military fatalities year after year: http://www.icasualties.org/oef/
Not only did I not know that the US has more troops in Afghanistan than Iraq (according to an online article I just now saw), but again I was quite surprised to learn that US military fatalities have gone from about 50 per year in 2002-2004, to about 100 per year in 2005 and 2006, then up and up and then way up to over 300 in 2009, with a new record-setting pace so far this year.
Anyway, I do not know why there have been so many more US military deaths in recent years in Afghanistan. I was simply going to note that it was in a short-term low in social mood (as measured by US stock market prices) that the US got so involved in the mid-east violence in the first place. I could give many other examples from US history and world history, but will not here, though I note that I have seen charts correlating stock market prices to large-scale organized violence and I can refer people to the sources.
Basically, during lows in social mood, people overall tend to be more likely to initiate violence (especially large-scale violence like revolutions and invasions, both of which can be deemed signs of desperation AKA despair, which corresponds to the psychological pattern of greed, as in “desperately greedy”). Further, when social mood is low (and people are relatively desperate), they are less likely overall to pay attention to the violence conducted by their neighbors and governments (or even to acknowledge it).
However, when social mood is low (or falling), those that do notice the violence of their governments tend to presume that the habit of violence is new, when in fact it may be just more open and more widespread during times of low social mood. With low social mood, there is more divisiveness about whether violence is ever justified, which violence is most justified, which other drastic government intervention (rescues, bail-outs, desperation blockades) is most justified, and so on. In other words, there is more divisiveness in general, more antagonism, more blame, more paranoia, more desperation, more panic, more narcissism, more fanaticism, more idealism (including cynical or negative idealisms)… or what we might simply call “declining social mood.”
So, patterns of social mood (like people’s priorities and the nature of the conversations that people are having) influence what kinds of actions people in those societies take (such as quietly desperate gambling on speculative real estate borrowing or desperately invading former allies, etc). This fits with the model of “variations in being lead to variations in doing which lead to variations in having various results.”
I learned that model first I think in Religious Science and later with Landmark Education. A similar model called “logical levels” was featured by a leading Neuro-Linguistic Programmer, Robert Dilts, in a book of his in 1990. Way back in the 1930s, Ralph Elliott established the same basic principle, calling it “socionomics”: social mood guides actions, which consequently produce measurable results (like stock market prices).
NLP practitioners (as well as the programs of Landmark Education and ministers of Religious Science) offer individual people, either in private consultations or in groups, access to new results by way of new actions which can be motivated by new patterns of conversation. Or, in the case of NLP in particular, conversation patterns in language are recognized themselves as products of certain neurological “programs,” so language is only one of many possible modes of “intervention” or “education,” with music, art and physical activity (like yoga or tai chi) recognized as providing profound neurological stimulation and “re-programming” as well as more obvious influences on neurological function like spinal manipulations and the biochemistry of nutrition and digestion and so on.
Now I have referenced the majority of my areas of personal interest, connecting them through the simple language model of “life is orderly,” with a “root cause” producing behavior patterns and then measurable results. Next, let’s “go back to the future” of Mexico. I assert that the social mood in Mexico, as well as much of Latin America and Southeast Asia, while it is very likely to decline notably at times in the coming months and years, is much more stable now than the social mood in leading developed nations like the US, which is still very near it’s recent highs.
The general public in the US is still almost just as complacent as a few years ago, even after several years of clear signals that major changes are emerging. Consider that the relatively desperate social mood in Mexico has enormous room to keep rising (lots of motivation to innovate), while the relatively complacent social mood in the US has enormous room to decline (in terms of social stability, prices, motivation to borrow or otherwise gamble with disregard for any risks, as well as trends of domestic tranquility or escalating violence).
More specifically, without considering issues of fluctuation of currency values, I notice that the stock markets of Mexico, Brazil, and Argentina have dramatically outperformed those of the US not just for the last year or last few years, but for decades. Apparently, social mood overall is still on a major upswing in those regions, at least according to some analysts of social mood, as well as the particular measures of economic behavior known as stock market prices. Here is the last 11 years or so of US stock prices (yellow) compared to Mexico’s (green) and Brazil (blue) and Argentina (red):
“Socionomists” are those who study social mood as a determinant of behavior trends and resulting measures like prices (and even military casualties). One simple point that socionomists have noticed about the last few years of prices in Latin America (as distinct from the US) is that after the lows of 2008, Latin American stock prices did not make new lows in early 2009, as the US stock market did. This has been interpreted (for reasons I won’t go in to here) that the “waveform harmonics” of Latin American stock markets (as well as various Southeast Asian stock markets) indicate that they are probably continuing their long-term trend of rising, while US stocks (according to the analysis of waveform harmonics) reversed and began a long-term downtrend somewhere between 1999 and 2007 (depending on exactly which US stock index is used, and whether adjusting for inflation, etc).
US stock prices clearly are significantly down in the last 10 years, but social mood is still quite complacent, rather than humbled (at least among the suburban middle class- I’m not talking about in inner city ghettoes or the ballooning numbers of homeless people in places like Sacramento, California). In contrast, stock prices in Mexico are way up in the last 10 years, while social mood may have reached a low with recent outbreaks of violence, which I understand has been concentrated in areas bordering the US (?). Perhaps mood is so far down in those areas because US tourism into Mexico has dropped, destabilizing local economic patterns.
However, social mood in Mexico may not have ever been nearly as high as that of the US. Thus, it simply cannot fall as far. Further, consider that in the last 18 years at least, Mexican social mood has been far outpacing US social mood increases, at least when measuring social mood through the behavioral indicator of stock market pricing. Stock market activity in Mexico has been making new highs consistently, while US stock market activity for over a decade now has been basically wobbling slowly, but with the wobble or volatility increasing dramatically in 2008 and again recently.
The Mexican stock market is up 2,588% in the last 18 years, compared to a 165% increase in the US. From 2000-2002. Mexican stock prices were much more stable than in the US and began their recovery much earlier. Then, from 2003-2007, Mexican prices rose much further than in the US, and again in 2009 and so far in 2010.
Will Mexico continue with the long-term boom in South America economies, or topple along with the US? Will Mexico catch up with Argentina’s outperformance of since late 2002 (shown below)?
No one is certain. However, social mood analysts, interpreting waveforms and trends of stock market pricing, can say that it is highly probable that Mexico will outperform the US in the next few decades (and perhaps even for a few centuries). Mexico has lots of room to catch up. The US has lots of wealth to lose, perhaps to neighboring Mexico. Consider that as construction companies, car manufacturers, computer dealers and cell phone companies “saturate” one market, they first try discounting prices with sales and other special promotions, but soon volume and profit margins may get low enough that neighboring markets that were previously ignored suddenly have access to cheap construction specialists, plus discounted computers, cell phones, cars, and so forth, even if the technology might be five or ten years behind the cutting edge (or twenty!).
Note that all of this is meant primarily as an intentionally superficial introduction to the idea of a context of mood (or “state of being”) as the causal factor leading to actions and results. I am not recommending “buy and hold” investing in Mexico. For example, the huge global stock market declines starting in the early fall of 2007 were very easy to forecast, so long-term “buy and hold” is virtually never the most intelligent choice.
(relevant forecasts of mine regarding the global stock plunge starting 2007:
July 21, 2007 (warning of the primary reversal) : http://www.gold-eagle.com/editorials_05/hunn072107.html
August 25, 2008 (warning of a marked acceleration of the decline): http://groups.yahoo.com/group/redpill_info/message/491 )
As noted repeatedly lately by me, the simplest and most obvious trend of relevance to the US population is that after over 100 years of the US increasing in it’s relative global affluence, that trend has reversed. Peaking at about 50% of global economic affluence relative to only 6% of the human population, the US could decline in relative prominence for years, decades or even centuries. Did we really think that soon our 6% of humanity would keep rising to control 90% of global affluence (or, while we are throwing out figures “randomly,” how about 150%)?
Places like Mexico, Argentina, India, and Jordan may be the next places to surge in long-term relative affluence. As the rate of increasing the disproportionate global affluence of the US began to slow down around the 1970s, it began surging in places like Saudi Arabia and Venezuela. Since about 1990, Southeast Asia (along with India and China) has done well while Japan and the USSR have not.
There is always a shift of global affluence between various people, various places, and even various paradigms (“ways of being/thinking/communicating”). There will always be groups above average and groups below average.
Among those above average in any particular measure, some will be falling. Among those below average, some will be rising.
“Equality” is not a natural fact within humanity any more than between fish and insects. Diversity is a natural fact. Fish are not the same as insects, just as your grandmother is not the same as your nephew. Equality as a legal principle may refer to equal procedural methods in similar cases.
There is no actual equality, even in law (perhaps especially in law!). Inequality is why people hire lawyers: because they perceive lawyers to be more competent than they are!
The trend of the US population controlling more and more global affluence decade after decade may have ended and may not resume for centuries. A similar trend of the population of Mexico (in particular and Latin America in general) controlling more and more global affluence decade after decade… may be just about to accelerate.
Incidentally, I am confident that I read recently that the Hispanic population of a few states in the US is already (or about to be) a majority. How long will caucasians be a majority in the US? I do not pose these as questions that are especially important for you today, but to give a sense of a certain way of inquiring.
Things change. Some of us inquire directly into recognizing the order by which things change. Some of us then inquire into actually participating in changing things consciously, rather than resisting or reacting against or condemning change.
Adapt what is small and dependent to what is large and controlling. For instance, when the weather changes, adjust what you wear. When the wind changes direction, adjust the direction of your sail. When patterns of global economic behavior have obviously just changed dramatically, though, how willing are you to adjust your finances?
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