Over the last quarter of a century, with loud praise from American liberals, ‘democracy’ has taken hold throughout Latin America, bringing socialists, Marxists, and leftist politicians of all stripes to power in country after country.

The January 2006 inauguration of Evo Morales as president of Bolivia is but a reminder of this trend.

Left-leaning Latin governments are good news for the U.S. bond market, although not necessarily for the people of the countries involved.

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Despite constant news about the weakening of the Dollar against the Euro, the American currency still is strong compared to the currency of many of its trading partners in Latin America and Asia. The Brazilian Real is a case in point.

Although the dollar has fallen about 20% compared to the Real since 2002, this decline was almost entirely due to recovery from a collapse of the Real after the election of Luiz Inacio Lula da Silva, a leftist union leader of the Worker’s Party, as president of this large and important country.

As an self-proclaimed “old friend” of leftist dictators Castro of Cuba and Chaves of Venezuela, the election of President “Lula” sent chills through the international financial markets.

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