Marc Chandler

BRIC or CRIB?

What we now popularly call emerging markets, once called Third World economies typically grow faster than advanced industrial nations. They say Brazil is the country of the future. They said it ten years ago and they'll say it ten years from now.

A recent post of mine was criticized because I cited US data which some comments said was flawed. But now i am told that we should not just accept Chinese data at face value, but that we should bolster it and the other BRICs by using PPP levels. PPP--purchasing power partity--levels for EM--typcially are above spot levels, due to higher inflation. So this too is not new in the BRIC concept.

And what of democracy. It does not appear that many of these comments see any risks posed by the lack of representative government. I submit representative government allows for continuouos changes while undemocratic governments produce large changes/discontinuities when they collapse

Many comments seem to think the BRICS are a free-lunch--so superior of an investment to the US--yet what looking at things on a risk adjusted basis. Won't that reveal different conclusions ?