April 9, 2011
SouthAmerica: Today when I was reading an article published on the Financial Times (UK) âSpeculators send Brazil's real soaring to new heightsâ - I was shaking my head and wondering why they can't grasp in Brazil that China and the United States is playing a different game than Brazil.
In this game Brazil has become the âPatsyâ - as a result of QE1, QE2, and very soon QE3 and so forth where the United States is exporting inflation to Brazil, and the speculators are pushing the real up with the carry trade between the real vs. the US dollar and the yuan.
The FT article said: âBrazil's currency has surged over the past two weeks, breaking one of market's most important resistance levels, as speculators have seized on an apparent shift in government policy.â
*****
In the last 2 years the real appreciated against the US dollar by 45 percent â and now the speculators are going to take Brazil for a ride.
Today Brazil has become the âPatsyâ and Brazil it's in the business of exporting jobs out of Brazil and undermining the foundations of the Brazilian economy.
This foreign exchange policy of the Brazilian government is creating a major problem for the Brazilian economy, because is increasing the cost of doing business in Brazil and products made in Brazil is becoming very expensive, and they are also putting the tourism industry out of business in Brazil. Brazil is becoming a very expensive place for people from other countries to go for vacation.
It is an âeconomic warâ and Brazil in retaliation is shooting blanks.
China and the United States are not going to change their game until the entire house of cards collapse, but in the meantime I wonder what is necessary for the Brazilian government to wake up and start playing in the same game that the US and China are playing.
Maybe the real exchange rate has to appreciate another 50 percent and Brazil has to export another 200,000 or 300,000 thousand manufacturing jobs out of Brazil, and have a real crisis in the tourism industry in Brazil, and inflation to go back to the levels that most Brazilians would prefer to forget â the level of the old bad days.
People finally started to grasp that the US economy and financial system is collapsing just like the Soviet Union â and the only reason they did not have a massive meltdown is because of the status of the US dollar as the main global reserve currency.
Now even George Soros is coming out and saying that the US dollar is no longer the main global reserve currency.
***
Guido Mantega anuncia novas medidas na área cambial. Parte II â April 7, 2011
http://www.youtube.com/watch?v=yym5Og_ce0s
*****
Here is what Guido Mantega next move should be to fight and defend the Brazilian economy on this âEconomicâ and âCurrency War.â
Finance Minister Guido Mantega should announce ASAP a 40 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, and also to get under control the constant currency destabilizing effect that serve as a torpedo to destroy the foundations of the Brazilian economy.
This strategy is designed to protect Brazilian manufacturers, the tourism industry in Brazil, and to keep the âHot Moneyâ from blowing more speculative bubbles inside the Brazilian economy.
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 start playing the game according to their rules.
.
SouthAmerica: Today when I was reading an article published on the Financial Times (UK) âSpeculators send Brazil's real soaring to new heightsâ - I was shaking my head and wondering why they can't grasp in Brazil that China and the United States is playing a different game than Brazil.
In this game Brazil has become the âPatsyâ - as a result of QE1, QE2, and very soon QE3 and so forth where the United States is exporting inflation to Brazil, and the speculators are pushing the real up with the carry trade between the real vs. the US dollar and the yuan.
The FT article said: âBrazil's currency has surged over the past two weeks, breaking one of market's most important resistance levels, as speculators have seized on an apparent shift in government policy.â
*****
In the last 2 years the real appreciated against the US dollar by 45 percent â and now the speculators are going to take Brazil for a ride.
Today Brazil has become the âPatsyâ and Brazil it's in the business of exporting jobs out of Brazil and undermining the foundations of the Brazilian economy.
This foreign exchange policy of the Brazilian government is creating a major problem for the Brazilian economy, because is increasing the cost of doing business in Brazil and products made in Brazil is becoming very expensive, and they are also putting the tourism industry out of business in Brazil. Brazil is becoming a very expensive place for people from other countries to go for vacation.
It is an âeconomic warâ and Brazil in retaliation is shooting blanks.
China and the United States are not going to change their game until the entire house of cards collapse, but in the meantime I wonder what is necessary for the Brazilian government to wake up and start playing in the same game that the US and China are playing.
Maybe the real exchange rate has to appreciate another 50 percent and Brazil has to export another 200,000 or 300,000 thousand manufacturing jobs out of Brazil, and have a real crisis in the tourism industry in Brazil, and inflation to go back to the levels that most Brazilians would prefer to forget â the level of the old bad days.
People finally started to grasp that the US economy and financial system is collapsing just like the Soviet Union â and the only reason they did not have a massive meltdown is because of the status of the US dollar as the main global reserve currency.
Now even George Soros is coming out and saying that the US dollar is no longer the main global reserve currency.
***
Guido Mantega anuncia novas medidas na área cambial. Parte II â April 7, 2011
http://www.youtube.com/watch?v=yym5Og_ce0s
*****
Here is what Guido Mantega next move should be to fight and defend the Brazilian economy on this âEconomicâ and âCurrency War.â
Finance Minister Guido Mantega should announce ASAP a 40 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, and also to get under control the constant currency destabilizing effect that serve as a torpedo to destroy the foundations of the Brazilian economy.
This strategy is designed to protect Brazilian manufacturers, the tourism industry in Brazil, and to keep the âHot Moneyâ from blowing more speculative bubbles inside the Brazilian economy.
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 start playing the game according to their rules.
.
