The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil.

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January 30, 2008

SouthAmerica: Yesterday, someone who reads Brazzil magazine on a regular basis send me an email to bring to my attention an article published last Sunday on The New York Times Magazine.

It seems to me that enough people have been reading my articles and the message is finally being grasped by other writers.

Recently, other writers and authors have contacted me, and they have been asking me permission to quote my articles or post copies of my articles on other publications, and they also let me know how much they enjoyed reading many of my articles.


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“Waving Goodbye to Hegemony”
By PARAG KHANNA
Published: January 27, 2008
The New York Times Magazine

… Geographically, Brazil is nearly as close to Europe as to America and is as keen to build cars and airplanes for Europe as it is to export soy to the U.S. Furthermore, Brazil, although a loyal American ally in the cold war, wasted little time before declaring a “strategic alliance” with China. Their economies are remarkably complementary, with Brazil shipping iron ore, timber, zinc, beef, milk and soybeans to China and China investing in Brazil’s hydroelectric dams, steel mills and shoe factories. Both China and Brazil’s ambitions may soon alter the very geography of their relations, with Brazil leading an effort to construct a Trans-Oceanic Highway from the Amazon through Peru to the Pacific Coast, facilitating access for Chinese shipping tankers. Latin America has mostly been a geopolitical afterthought over the centuries, but in the 21st century, all resources will be competed for, and none are too far away….


Source: http://www.nytimes.com/2008/01/27/magazine/27world-t.html?pagewanted=5&_r=2&page&ref=asia

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April 27, 2008

SouthAmerica: In the last few days Petrobras has announced that they have found even more oil in Brazil – and in the coming 2 decades Brazil will become a major player on the global oil market.

I just finished reading an article saying that the United States expects to receive most of this new oil found in Brazil.

In my opinion it is a silly assumption since why Brazil would want to accumulate a pile of confetti in the coming decades?

Very soon the Chinese will have accumulated US$ 2 trillion dollars in confetti, and Japan has another US$ 1 trillion in confetti.

Very soon the US dollar will be traded by the kilo in world markets and 1 kilo of US dollars might be enough to buy a loaf of bread. By the time the new oil is flowing in Brazil and available for sale we probably will need 1 kilo of US$ 100 dollar bills to buy a loaf of bread in the United States.

Americans are in LaLaLand if they think that they will be able to buy the new Brazilian oil with their worthless currency.

Today is the time for Brazil to negotiate with China a concrete long-term agreement regarding China investing at least US$ 250 billion dollars in Brazil (as per my article published in October 2007. The article calls for a US$ 200 billion dollar investment, but since then the US dollar lost a lot of its value, and the new figure should be at least US$ 250 billion and should be adjusted even further as the US dollar becomes completely worthless.)

The oil finds in Brazil should be a major incentive for the Chinese government to take seriously my investment plan and move forward to make it happen.

The last time that I met my friend former president Jose Sarney in November 2007 I mentioned to him that article and the plan – and I sent a copy of the article directly to him.

Now I am in contact with some members of my family who are politicians in Brazil – they are influential politicians and form a real dynasty since in the last 200 years there is a gap of only 6 years when a member of the family was not holding some kind of high political office.

When I consider both sides of my grandmothers’ family there were over 50 people who were very influential such as Regent of the Empire, Prime Ministers, Finance Minister, Navy Secretary, Attorney General, various Governors, many Mayors, a number of Senators, a number of Congressmen, and politicians who served on the state and local levels.

One of my cousins have the following information on his website:

Deputado Federal Bonifacio Andrada
http://www.camara.gov.br/bonifaciodeandrada/biografia.html

Then you go to the end of the page and click on: uma dinastia de politicos.

Then you get into the following page:

http://www.camara.gov.br/bonifaciodeandrada/dinastia.html

On that chart my great great grandfather is Jose Bonifacio de Andrada e Silva (O Moco) (1827 – 1886).

My great great grandfather was the older brother of Antonio Carlos Ribeiro de Andrada (1836 – 1893). And all these politicians listed above are his descendants.

These guys are just a short list of relatives of mine that were politicians in Brazil in the last 200 years.

The new generation of this branch of our family they did grew up and they are very close friends of the current Governor of Minas Gerais – Mr. Aecio Neves.

For the people who don’t recognize his name Mr. Aecio Neves is the favorite candidate to replace president Lula in 2010 as president of Brazil.

The Andrada Family is already a very influential bunch, and in the coming years they are going to become even more influential in Brazil.

The Andrada e Silva and the Souza Queiroz are the 2 most influential families in Brazilian history.

Most Americans don’t understand that but whom you know it is an important fact in doing business in Brazil – personal and family connections are very important to get things done.

I have no illusions and I understand that the best days of the United States are long gone – we are in the period of fast decline and no different than the other Empires of the past.

I am seeing the slow death of the last superpower on a daily basis and only a blind person also can’t see it since it is so obvious to me.

Brazil has to look for the future – China – and not to the past – the United States.

The future of Brazil is connected to China.

The future of the United States is connected to Israel and its policies. Hillary Clinton just said the most stupid thing that I ever heard – that she is prepared to nuke Iran.

This very much summarize on a Nutshell the obsolete thinking of many American politicians and at the same time gives the reason for the other countries around the world to arm themselves with nuclear weapons.

I thought John McCain was the dangerous guy on this presidential race, now we also have nuclear Hillary to think about – basically we have two mental cases running for president.


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You can read my entire article that I mentioned above on my blog, since Brazzil magazine has been having a lot of technological problems that they are fixing right now, and that website has been down a lot in the last 2 weeks.

That is too bad since the 4-part article has at least 800 comments so far at Brazzil magazine and more than 5 thousand people took the time to read this article. Eventually they will be able to fix the problems at Brazzil magazine in the meantime you can read the article at:


“The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil.”

China direct investment in Brazil

http://chinadirectinvestmentinbrazil.blogspot.com/

The final conclusion is: It’s imperative that China move forward in an aggressive fashion and implement with Brazil the plan described on this article. And China should look at it as a matter of national security and future survival.

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As one who occasionally trades dollars for ever fewer Reais, I cannot get very enthusiastic about an additional 200 billion dollars coming to Brazil, driving the value of the Real even higher.

Brazil already suffers from the "Dutch Disease." (I.e. "De-industrialization" of high labor cost manufactured items, such as shoes and shirts etc. This has already closed factories that were making them for export.) That capital influx, and associated stronger Real, would make Brazil dependent upon a continued influx of funds for domestic non-farm jobs as the cheaper imports would kill manufacture of almost all good now made in Brazil, certainly all that are now exported.

I have been long predicting that the US and EU will fall into deep depression shortly after the run on the dollar begins. (I gave date for this run more than 3 years ago as in the six year long window starting this October.) I also stated that GDP rates in Asia will remain positive at about 1/3 of their present levels, and Brazil plus other suppliers of food stocks, energy, minerals will grow slightly as "economic colonies" of Asia, especially China.

What you (SA in the OP) are suggesting is: "Why wait? - Become a colony of China now."
 
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Billdick: What you (SA in the OP) are suggesting is: "Why wait? - Become a colony of China now."


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April 28, 2008

SouthAmerica: Reply to Billdick

Since Brazzil magazine has been down for the last 3 weeks because of technical problems I just created a Blogger for two articles published by Brazzil magazine that it will help you understand my point of view.

That's too bad that Brazzil magazine is down right now because you would appreciate all the comments following these articles.


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Posted on Blogger on Wednesday, October 3, 2007
Regarding Brazil and China

"The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil."
By: Ricardo C. Amaral
Brazzil Magazine
Published: October 2007
http://chinadirectinvestmentinbrazil.blogspot.com/


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Posted on Blogger on Monday, April 28, 2008
Regarding Brazil and China

"Here Is Why Brazil Should Adopt the New Asian Currency."
Written by Ricardo C. Amaral
Brazzil Magazine
Published: March 2, 2007
http://brazilandthenewasiancurrency.blogspot.com/


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Posted on Blogger on Monday, April 28, 2008
Regarding Brazil and China

"While China Rises the US Falls in Brazil and Latin America."
By: Ricardo C. Amaral
Brazzil magzine
Published on June 2, 2005
http://whilechinarisestheusfalls.blogspot.com/

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May 20, 2009

SouthAmerica: It is interesting to read the comments following these two articles one year later when we take in consideration what has transpired in the real world since then - (1) the article about China investing in Brazil and 2) the article about Petrobras.


The Coming Renationalization of Petrobras
http://www.elitetrader.com/vb/showthread.php?s=&threadid=131138

Brazzil Magazine - as of 052009
Viewers: 7064
Comments: 346


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Brazzil Magazine – October 2007
"The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil" - Written by Ricardo C. Amaral

…The final conclusion is: It's imperative that China move forward in an aggressive fashion and implement with Brazil the plan described in this four-part series of articles. And China should look at it as a matter of national security and future survival.

Monday, 01 October 2007 - Part 1 of 4
http://www.brazzil.com/component/content/article/184-october-2007/9977.html

Friday, 05 October 2007 - Part 2 of 4
http://www.brazzil.com/component/content/article/184-october-2007/9979.html

Thursday, 11 October 2007 - Part 3 of 4
http://www.brazzil.com/component/content/article/184-october-2007/9983.html

Tuesday, 16 October 2007 - Part 4 of 4
http://www.brazzil.com/component/content/article/184-october-2007/9985.html
Hits: 22,210
12/14/08


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The Smartest Thing China Could Do Right Now: Invest US$ 200 Billion in Brazil
http://chinadirectinvestmentinbrazil.blogspot.com/


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”Brazil Turns to China to Help Finance Oil Projects”
By JOHN LYONS
Wall Street Journal
May 18, 2009

With Credit Markets Tight, President da Silva Hunts for Funding in Beijing, Offering His Hosts Secure Commodity Supplies

SÃO PAULO -- Brazil's oil industry is turning to China for cash in the latest sign of how Beijing's clout is growing amid the global economic downturn.

Brazilian President Luiz Inácio Lula da Silva was set to arrive in Beijing Monday to meet with Chinese President Hu Jintao, who is expected to unleash billions of dollars of credit to help Brazil exploit its massive oil reserves. Brazil will return the favor by guaranteeing oil shipments to Chinese companies.

The nations are being thrust together by the global financial crisis. Brazil's state-controlled oil giant, Petroleo Brasileiro SA, wants to spend $174 billion over the next five years to elevate Brazil into the major leagues of oil-producing nations. With international capital markets on life support, China is among the few remaining sources of cash.

Petrobras, as the company is known, is turning to China at a time when China's appetite for raw materials has lifted economies across commodity-rich Latin America, blunting the impact of the global downturn. In March, China passed the U.S. as Brazil's biggest trade partner.

Brazilian President Luiz Inácio Lula da Silva, at top left with China's Hu Jintao at the G-20 summit in April, and at bottom touring a Petrobras terminal in Rio de Janeiro, is seeking help to exploit Brazil's massive oil reserves.

Terms of the arrangement had yet to be finalized before the Brazilian leader departed, a senior Petrobras official said, although a broad outline of the talks was announced by Petrobras earlier this year. On the table is a $10 billion loan in exchange for as many as 200,000 barrels per day. China's chief goal, however, is to use the loans to win deals to provide services and equipment at a time when Brazil is becoming tougher in dealing with foreign companies, industry experts said.

Even before a deal is done, the months-long negotiations between Chinese and Brazilian officials have illustrated a competitive advantage for China's government-backed companies at a time when credit markets are dry. Underscoring China's importance as a lender of last resort, Brazil engaged China even though many of its past investment initiatives with the nation have ended in disappointment.

"The U.S. has a problem," Sergio Gabrielli, chief executive of Petrobras, said recently when asked about the loan talks. "There isn't someone in the U.S. government that we can sit down with and have the kinds of discussions we're having with the Chinese."

Mr. Gabrielli was referring to the fact that Chinese government banks are willing to extend huge foreign loans to further China's long-term energy-security goals: ensuring diverse global supplies and winning entree into competitive regions for its oil companies. A string of recent oil loans to Russia, Kazakhstan and others has pushed China's total commitments to more than $45 billion.

Such direct government lending is an increasingly powerful tool in an era when three-quarters of the world's oil reserves are in the hands of state-controlled oil companies. By dealing directly with governments in oil-supplier nations, China can use its wealth to reduce the role of big oil
companies -- the traditional intermediaries between oil producers and oil consumers.

"What you are seeing is the new geopolitics of oil, where deals start from a political understanding and cut out the international oil companies," says Roger Diwan, a partner at PFC Energy, a Houston-based consultancy.

To be sure, international oil companies such as Exxon Mobil Corp. and Royal Dutch Shell PLC have important advantages in technology and managerial know-how over state companies. Brazil's most tantalizing oil reserves lie miles beneath ocean, rock and unstable layers of salt. Getting it out likely will require the expertise and muscle of the industry's top companies.

What's more, China's willingness to fund oil projects should ultimately help the U.S. consumer, experts say. Most of the world's oil is sold on the international spot market to the highest bidder. China's willingness to extend credit to oil producers should keep prices from rising simply by increasing the global supply of oil.

Brazil's Petrobras, which is controlled by the government but operates with a free-market ethos and has shares trading on the New York Stock Exchange, is in an unusual position for the global oil industry after notching major oil and gas finds. The company is sitting on far more reserves than it has people and money to pump.

Brazil hatched an ambitious plan to change that, and it has vowed to make it happen even in the downturn. "It's willing to do deals where necessary," says Matthew Shaw, a senior Latin American analyst at Wood Mackenzie, a Scotland-based oil consultancy.

Source: http://online.wsj.com/article/SB124259318084927919.html

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South America!

You do not know what you are writing. Your plan is to ask China to lend Brazil money on some pet projects which you love! You do NOT like any foreigner to invest in any natural resources in Brazil. You do not even like foreigner to invest in even a power line!

China does not invest according to your stupid plan. Chinese is investing in the opposite way of your stupid plan. That is to get the Brazilian oil which you view holy and should be nationalized!

Tom Lloyds
 
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May 21, 2009

SouthAmerica: Tom Loyds

You are a pain in the ass, and you don't even know when your arguments have been shredded into pieces. You are a very poor loser, and you don't know when to go away after you have been beaten badly during our debates on this subject.

Anyway, if you noticed the agreement that China made with the Brazilian government - the Chinese government is lending money to Petrobras in exchange for guaranteed future shipments of oil from Petrobras oil fields to China.

I know you are very narrow minded person and you have a major problem understanding many concepts, but at the end of the day China is not buying Petrobras common stock - China instead made an agreement with the Brazilian government to lend money to Petrobras in exchange for guaranteed future shipments of oil to China - just as I suggested on my articles.

Once again, you are too stupid to be able to get that point.

The Chinese government got the essence of my article and they followed up with the initial step of lending $ 10 billion dollars to Petrobras - this is only the first step on a long term very beneficial relationship to both sides between the Chinese and the Brazilian government.


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