whats worst case cash backing?, page-47

dhc,

I wouldn't worry too much about Latin America ... let's just concentrate on South America.

South America is a BIG place; and I agree with you that there is some sovereign risk issues - BUT they're predominantly in Hugo Chavez's Venezuela, Uruguay, Bolivia, and maybe Paraguay imo.

But specifically we are in Brazil ... which has NO sovereign risk and has NO talk of "nationalising natural resources" that I'm aware of.

In 2011, Brazil took over from the UK at the world's 7th largest economy (Source: CIA Fact Book); and the unemployment rate is currently standing at a very low ~4.7% atm. There have been large inflows of capital into Brazil - especially in the last few years - and you wouldn't see this if there was any sort of sovereign risk imo.

Also (according to the CIA), there is negligible sovereign risk issue with Brazil - and in fact in June, 2011 the IMF actually congratulated Brazil's Finance Minister as Brazil's sovereign risk fell below that of the USA.

The following websites have been a great source of research in this regard:-

www.euromoneycountryrisk.com

http://www.standardandpoors.com

This may be another point you may now wish to concede!