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What's the difference between Latino and Hispanic?

What's the difference between the terms 'Latino' and 'Hispanic? Most people use these words interchangeably, but there is actually a difference. I try to tackle this difficult and complex topic, but looking at the origin and different uses of the words.

I also attempt to define where actually Latin America is. Something that, like so many things, does not have a clear definition.

Music:
No Frills Cumbia - Kevin MacLeod
(http://incompetech.com/music/)
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