Quote from jem:
don't change the subject. dont evade the point.
we are not talking about the creation of money as loans against securitized assets.
I specifically stated when you allow the fed to monetize the debt.
Deficit spending causes the currency to devalue...
-You are pissed the USA currency is going down relative to the Brazillian - Real
- yet you support the wasteful massive deficit spending of the dems and Obama.
Your economic and poltical stances are incompatible.
Its like arguing a debt crisis can be solved by more spending.
Oh wait that is what you were arguing.
Jem: â-You are pissed the USA currency is going down relative to the Brazilian â Realâ
*****
August 21, 2012
SouthAmerica: Reply to jem
Jem you got all wrong, this is what I have been saying for the last 2 years.
The real appreciated even more against the US dollar see my posting below - and I wrote a number of times here on ET and also on Brazzil magazine that they should devalue the Brazilian currency by 35 percent against the US dollar and also against the Chinese yuan.
In the last years the Brazilian currency has been devalued by 33 percent so far â exactly what I had been suggesting all along.
The only problem is that today Euroland, China, and the US economies are all imploding and going to hell, I suggested that the Brazilian currency keep pace with the US dollar and also the Chinese yuan on this race to the bottom.
I was pissed with Ben Bernanke's QE.....XXXXXXXXXXXX..program, because what he is doing is exporting inflation, bubbles and trouble to the economies of the emerging countries including Brazil.
And when the Selic interest rate was over 12 percent in Brazil (the Brazilian fed funds rate) I have been suggesting for the Brazilian Central bank to reduce it all the way to 7 percent to get ride off the âHot Moneyâ that was flooding the Brazilian economy and blowing bubbles inside the Brazilian economy.
I hope the Selic rate reaches the 7 percent level by early 2013.
If the race to the bottom gets worse against the US dollar and the Chinese yuan then they should lower the Selic rate even further to 6 percent to keep the âHot Moneyâ away from the Brazilian economy.
Here is one of my postings here on ET forum from almost 2 years ago.
http://www.elitetrader.com/vb/showt...409&highlight=Devalue+the+real+by#post2998409
...November 1, 2010
SouthAmerica: In my opinion, on Wednesday when Ben Bernanke announces the next wave of QE2, then Finance Minister Guido Mantega should also announce a 30 percent devaluation of the Real, and adopt a fixed rate currency system pegged to a basket of currencies including the US dollar and the Chinese yuan â a program designed to stop the âHot Moneyâ from going into the Brazilian market to blow all kinds of bubbles in Brazil.
There's nothing wrong with this strategy, since the 2 countries with the 2 largest economies in the world are not playing a fair game in the international monetary arena, and Brazil should play the game according to their rules.
If having a currency system pegged to the US dollar is good for China, it should also be good for Brazil. And since these 2 countries are very important for the Brazilian economy, then Brazil should first devalue its currency by 30 percent, then adopt a fixed rate currency system pegged to a basket of currencies including the US dollar and the Chinese yuan.
And neither country has the right to complain anything to Brazil if Brazil adopts this currency strategy, since this strategy is designed to protect Brazilian manufacturers, the tourism industry in Brazil, and to keep the âHot Moneyâ from blowing bubbles inside the Brazilian economy.
After Brazil follow these steps, Henrique Meirelles at the Central Bank should take action and reduce the Selic interest rate in Brazil in the coming months to a level around 8 percent or even lower.
And don't forget to put a penalty in place for when the âHot Moneyâ starts to leave Brazil in a stampede â make these guys pay on the way out for the damage that their actions will cause to the Brazilian economy.
.
