The Latin American Debt Crisis did not happen overnight, the crisis had been in the making for many years and the signs of its arrival were evident in Latin American society. The reasons for its occurrence are also broad; some blame can also be placed on countries outside of Latin America. The real domestic product growth rate of many Latin American countries grew at a consistently high pace in the decade preceding the crisis of the 1980s; this growth led to an increase in foreign investment and business investment, and the world began to support these developing countries. nations (Ocampo). Foreign investment in Latin America created a new international financial system that gave foreign banks access to funds to make massive loans to developing countries in Latin America. However, the prosperity was not continuous. In the mid-1970s there was an increase in natural resources, which led to an increase in the prices of imported goods, and so Latin American countries had to find a way to pay off these deficits, which then caused them to borrow more money. By the late 1970s, Latin America had a debt of more than $150 billion, and each nation's debt growth rates varied greatly, with Mexico and Brazil taking on more than half the debt. Loans accrued by Latin American countries had variable interest rates, making them closely tied to the commodities of the time. The London Interbank Offered Rate controlled the variable rate and these prices were updated every six months (Ocampo). LIBOR calculated rates based on the average interest rate estimated by the major banks in London and what those particular banks would charge if they borrowed from other banks. With LIBOR rates and floati...... middle of paper ......ct. 2010. Network. March 11, 2014.130329523/how-fake-money-saved-brazil>.Smale, Will. "The Brazilian economy marching to the rhythm of samba". BBC News. BBC, 01 August 2012.Web. March 11, 2014. “Trade Policy in Brazil.” The Economist Intelligence Unit (2011): 1-15. Web...Watkins, Thayer. "The Economic History of Brazil". The economic history of Brazil. San Jose State University, October 17, 2000. Web. March 11, 2014.."World Economic Outlook Database, October 2012." World Economic Outlook Database. International Monetary Fund, nd Web. 11 March 2014..