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Guest Post: When Currency Wars Become Trade Wars...

Tyler Durden's picture


Submitted by John Aziz of Azizonomics blog,

Beggaring thy neighbour has consequences. Neighbours might turn around and bite back.

China and the United States are already locked in an intractable and multilayered currency war. That has not escalated much yet beyond a little barbed rhetoric (although if China want to get a meaningful return on the trillions of dollars of American paper they are holding, one can only suspect that there will be some serious escalation as the United States continues to print, print, print, a behaviour that China and China’s allies are deeply uncomfortable with).

But Brazil are already escalating.

Brazil flag face

The Washington Post notes:

When the Brazilian economy began to stall last year, officials in Latin America’s largest country started pulling pages from the playbook of another major developing nation: China.


They hiked tariffs on dozens of industrial products, limited imports of auto parts, and capped how many automobiles could come into the country from Mexico — an indirect slap at the U.S. companies that assemble many vehicles there.


The country’s slowdown and the government’s response to it is a growing concern among U.S. officials worried that Brazil may be charting an aggressive new course — away from the globalized, open path that the United States has advocated successfully in Mexico, Colombia and some other Latin American nations, and toward the state-guided capitalism that the United States has been battling to change in China. As the world economy struggles for common policies that could bolster a still tentative recovery, the push toward protectionism by an influential developing country is seen in Washington as a step backward.


“These are unhelpful and concerning developments which are contrary to our mutual attempts” to strengthen the world economy, outgoing U.S. Trade Representative Ron Kirk wrote in a strongly worded letter to Brazilian officials that criticized recent tariff hikes as “clearly protectionist.”

And Brazilian officials are very, very clear about exactly why they are doing what they are doing:

Brazilian officials insist the measures are a temporary buffer to help their developing country stay on course in a world where they feel under double-barreled assault from cheap labor in China and cheap money from the U.S. Federal Reserve’s policy of quantitative easing.


“We are only defending ourselves to prevent the disorganization, the deterioration of our industry, and prevent our market, which is strong, from being taken by imported products,” Brazil’s outspoken finance minister, Guido Mantega, said in an interview. Mantega popularized use of the term “currency war” to describe the Federal Reserve’s successive rounds of easing, which he likened to a form of protectionism that forced up the relative value of Brazil’s currency and made its products more expensive relative to imports from the United States and also China.

How long until other nations join with Brazil in declaring trade measures against the United States is uncertain, but there may be few other options on the table for creditors wanting to get their pound of flesh, or nations wishing to protect domestic industries. After all, the currency wars won’t just go away; competitive devaluation is like trying to get the last word in an argument. The real question is whether the present argument will lead to a fistfight.


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Tue, 12/04/2012 - 16:51 | 3033482 Spastica Rex
Spastica Rex's picture

My state-guided capitalism is bigger than yours.

Tue, 12/04/2012 - 17:01 | 3033508 ACP
ACP's picture

"The sinews of war are infinite money." - Marcus Tullius Cicero

Tue, 12/04/2012 - 17:11 | 3033532 I think I need ...
I think I need to buy a gun's picture

i've noticed we are having port problems on the west coast and read an article that mississippi river water levels may halt goods as well, its like a disney script they tell us but is hyperinflation coming bitchez? no goods to the united states?

Tue, 12/04/2012 - 17:15 | 3033544 economics9698
economics9698's picture

Ah autarky the favorite economic policy of fascist for eons.

Tue, 12/04/2012 - 17:49 | 3033630 Spastica Rex
Spastica Rex's picture

North Korea is Best Korea

It's so sad Kim Jong-Il is gone. He was way funnier than his kid.

Tue, 12/04/2012 - 17:59 | 3033647 SafelyGraze
SafelyGraze's picture

the "choice of currency" as false choice:

young lady was nearby today, in grocery store, holding her kid.

kid was squirming.

lady says to kid: do you want me to put you in the *cart*, or do want me to *hold you*

the kid is no slouch. realizes this is a false choice. 

says "I want you to put me *down*"

she says: that's not an option.

the kid is no slouch. realizes he can create his own options.

the kid squirms, looks around at other customers, screams "she's squeezing me", pounds on her shouder, and cries "help" really loud.

good luck kid. there's a whole lot more of that up ahead.


Tue, 12/04/2012 - 18:16 | 3033688 falak pema
falak pema's picture

you look at the worse half; he has a nice lady friend. Its time those north koreans showed more of their women in swim suits; it would thaw the cold war and there would be more nuking in bed than nukes on military parade! 

Tue, 12/04/2012 - 18:29 | 3033710 Spastica Rex
Spastica Rex's picture

She's quite adorable. Good point. Best to look at the bright side.

Korean girls are hot.

Tue, 12/04/2012 - 20:54 | 3034079 dark pools of soros
dark pools of soros's picture

K-Pop is seriously california dreamin these days..



Tue, 12/04/2012 - 22:00 | 3034313 Spastica Rex
Spastica Rex's picture

My kids tell me K-Pop is going to take over the world. My 13 yr old duaghter doesn't like it; she's a Joan Jett fan. I think G-Dragon is pretty interesting.

Tue, 12/04/2012 - 17:21 | 3033561 NotApplicable
NotApplicable's picture

The Mo River is going to have to be renamed the Less River.

Wed, 12/05/2012 - 04:42 | 3034917 Ar-Pharazôn
Ar-Pharazôn's picture

"nervos belli pecuniam infinitam" Marcus Tullius Cicero

Wed, 12/05/2012 - 04:56 | 3034927 AvoidingTaxation
AvoidingTaxation's picture

Buon compleanno Ar

Tue, 12/04/2012 - 16:53 | 3033484 Lost Wages
Lost Wages's picture

Any money printer that wants to get in a fight with Ben Bernanke is going to lose.

Tue, 12/04/2012 - 16:57 | 3033497 Incubus
Incubus's picture

I heard the 'nanke feeds his printers gunpowder to make them super-aggressive.

Tue, 12/04/2012 - 17:02 | 3033513 LFMayor
LFMayor's picture

raw hamburger w/ gunpowder mixed in.   like a fur covered wood chipper.

Tue, 12/04/2012 - 17:12 | 3033537 Ness.
Ness.'s picture

Jacob's Ladder.  

Tue, 12/04/2012 - 17:30 | 3033583 zilverreiger
zilverreiger's picture

Not when they team up, it only works if the 95% of the world thats not the USA, that holds 80% of the USD, let themselves be divided and then conquered.

Tue, 12/04/2012 - 18:18 | 3033694 BraveSirRobin
BraveSirRobin's picture

It's not printed anymore, it's simply 1000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000

Tue, 12/04/2012 - 16:54 | 3033485 LawsofPhysics
LawsofPhysics's picture

Way off base. I'd argue that the real owners in the U.S. and China have been on the same page for quite some time.  Both are outright currency manipulators slaughtering sheep.  A stable currency in either country would imply real accountability. Good luck with that.

Tue, 12/04/2012 - 16:58 | 3033499 fonzannoon
fonzannoon's picture

I had a real real rich guy tell me recently that the reason the US is the greatest country in the world is because we have convinced the world to work at factories for a few cents and hour and make our shit for us. Before I could wrap my mind around that thought he continued "but make no mistake, I could care less if it some kid in China or your kid that is in those factories making my shit". So Laws you are 100% right.

Tue, 12/04/2012 - 17:01 | 3033509 Karlus
Karlus's picture

We get wonderful crud from across the sea and trade them what? Little paper promises?


Heck, even our current President has figured a way to have the populace not even have to work for stuff..../sarc

Tue, 12/04/2012 - 17:08 | 3033520 LawsofPhysics
LawsofPhysics's picture

The paper has been coming back for quite some time. You better go have a look at the names on those land titles out west as well as the contracts that have been secured for resource extraction.  In many ways, china has become more capitalist and america more socialist/centrally planned.  At the highest levels, these people don't care because their children will go to the right schools, be in the right fraternities and know all the right people to stay in this league.  Money really is irrelevant, power and control is what matters.  Sheeple from different countries may squabble, but no wars actually start until these people (the 0.01 %) start disagreeing.

Same as it ever was.

Tue, 12/04/2012 - 17:11 | 3033522 Kitler
Kitler's picture

Time for China to stop buying coal and iron ore and copper and use up their sky high inventories of same to crash these commodity prices. Then step up with those little paper promises and buy the mines for pennies on the dollar.

Now that's what free trade is all about.

Tue, 12/04/2012 - 17:14 | 3033542 Dr. Richard Head
Dr. Richard Head's picture

From what I understand, China is already trading those pieces of paper for water from Lake Michigan. 

Tue, 12/04/2012 - 18:43 | 3033731 Zwelgje
Zwelgje's picture

And from Norway.

Tue, 12/04/2012 - 18:05 | 3033669 Dapper Dan
Dapper Dan's picture

There seems to be direct correlation in the last 15 years with the US dollar (depreciating in value), exchanged for Chinese products, that are ( depreciating  in quality).

And on a long enough time line, we will end up giving them nothing and getting nothing in return.  But hey, look at that GDP number!

Tue, 12/04/2012 - 17:03 | 3033516 LawsofPhysics
LawsofPhysics's picture

Both of my brother-in-laws are in venture capital.  They don't care and you would be surprised by exactly what they own and where they can be at the drop of a hat with their complete security team.  This is the reality that people don't see.  The matrix on many levels.  It amazes me that these guys continue to extract the wealth that they do from the system.  Same as it ever was, the capital and resource mis-allocation and mal-investment continues.

Tue, 12/04/2012 - 17:25 | 3033571 NotApplicable
NotApplicable's picture

When you've got the whole world under your thumb, a little bit of wealth extraction here and there starts to add up.

"Synergy," I think, is the word for it.


Tue, 12/04/2012 - 17:29 | 3033581 LawsofPhysics
LawsofPhysics's picture

Precisely.  All of my nieces and nephews speak, read as well as write mandarin.  Being groomed to do business in both spheres.  The "writing" is very much "on the wall".

Tue, 12/04/2012 - 20:26 | 3034004 TheAlchemist
TheAlchemist's picture

They don't write Mandarin.  Mandarin is a spoken language.  They write either Simplified or Traditional Chinese (or possibly both).

Not being an ass... just providing clarification.  It'll be important when the new overlords change the signs on the White House lawn.

Wed, 12/05/2012 - 09:08 | 3035083 Urban Redneck
Urban Redneck's picture

Just to be an ass... and because I speak German...

Tue, 12/04/2012 - 17:57 | 3033651 HungryPorkChop
HungryPorkChop's picture

I thought it was called VULTURE Capital.

Tue, 12/04/2012 - 20:12 | 3033962 Nassim
Nassim's picture

Are your sisters first wives or the more recent models?

Tue, 12/04/2012 - 17:07 | 3033523 Everybodys All ...
Everybodys All American's picture

Henry Ford realized the stupidity of this argument best. If his workers made a good wage they would be buying his cars and everyone would reach their goal. The short term mentality of this type of "rich" just kills me.

Does it do anyone here in the US any good in the long haul to pay for an unemployed person to not work and employ a worker in China to do presumably the same job? That's why are deficits just keep getting larger and larger. Right here is where our government can actually help out but I think the goal is to create this new world order which effectively makes the US middle class ''pay'' for the jobs and growth elsewhere around the world.

Tue, 12/04/2012 - 17:16 | 3033541 LawsofPhysics
LawsofPhysics's picture

Shit, are you kidding me?  It really depends on how hard or easy it is to placate or disappear those unemployed.

God, wake up, look around, give half the males a six pack, X-box, and a box of ho-hos and you won't see them for a week.

Doesn't bode well for a real revolution does it?  Look at 6000+ years of history.  No real structural changes or revolutions start until the supply lines for essential commodities get cut.  Now is no different.  Without steal and the energy to run those factories, henry ford wouldn't have made shit.

Tue, 12/04/2012 - 17:19 | 3033557 economics9698
economics9698's picture

When you increase wages you sell LESS cars.  Wages are a supply impute.  Ford increased wages to stop turnover on the assembly line.  He felt the increased cost was worth it, that’s all folks.

Tue, 12/04/2012 - 17:28 | 3033577 Global Hunter
Global Hunter's picture

economics9698, why would higher wages equate to selling less cars?  I don't understand, but I'm interested.

Tue, 12/04/2012 - 17:32 | 3033592 LawsofPhysics
LawsofPhysics's picture

Yes, do tell.  I can see how responsible people making better wages might pay down debt (and in the fractional reserve banking world of fiat currency, that might be a problem), but that's it (okay, maybe some inflation).

Tue, 12/04/2012 - 18:30 | 3033712 Shigure
Shigure's picture

Higher wages = higher production costs, so the company would be less competitive. It's a race to the bottom.

Tue, 12/04/2012 - 23:21 | 3034596 TBT or not TBT
TBT or not TBT's picture

Leading to higher prices (because auto making was a bit of an oligpoly back then), higher prices leading to reduced demand, and fewer cars sold.    Until GMAC / Ally comes to the "rescue" with loans for anyone with a pulse, or zombies of course, at 0%.

Tue, 12/04/2012 - 17:25 | 3033566 Global Hunter
Global Hunter's picture

An x-box and twinkies doesn't do squat for me.  Perhaps if you offered 10 cases of Labatt's Blue, an all expenses paid weekend with a Hungarian porn star, 4 ounces of blow, and a quarter pound of weed I'd disappear for a week.

A lot of people are just selling themselves very short right now.

Tue, 12/04/2012 - 17:31 | 3033589 LawsofPhysics
LawsofPhysics's picture

Perhaps, but you get the idea.  Moreover, you still need major resources to actually do anything, especially revolt.  perhaps BofA has a special loan program?

Tue, 12/04/2012 - 17:48 | 3033620 Everybodys All ...
Everybodys All American's picture

I see things differently.  Sure looks to me like higher sustained unemployment is the main problem with our government's fiscal problem. Individuals can be placated until the government goes to shit and then we all start turning on each other. I'm saying it could be avoided and I sense you're already gearing up for the revolution. It takes leadership and that is definitely missing.

Tue, 12/04/2012 - 17:53 | 3033638 LawsofPhysics
LawsofPhysics's picture

Leadership and accountability.  Tell me, when was the last time you saw real consequences for bad behavior on wall street or the financial world?  Address the issue of moral hazard and most of this fixes itself.  By the way, having your bonus go from 50 million to 20 million is not a real consequence.  Losing your head would be. 

Tue, 12/04/2012 - 17:54 | 3033644 Everybodys All ...
Everybodys All American's picture

Absolutely. 100% agreement. Not sure about losing the head. lol

Tue, 12/04/2012 - 17:52 | 3033639 ThirdWorldDude
ThirdWorldDude's picture

Using the words 'government' and 'help out' in the same sentence makes the meaning an oxymoron.

Tue, 12/04/2012 - 17:44 | 3033615 zorba THE GREEK
zorba THE GREEK's picture

This could get uglier than a botched Brazilian butt-lift.

Wed, 12/05/2012 - 07:26 | 3034983 Bobbyrib
Bobbyrib's picture

Hopefully he has no PM's when TSHF. He sounds like an asshole.

Tue, 12/04/2012 - 16:54 | 3033486 magpie
magpie's picture

EU Core downgrades coming on Friday

Tue, 12/04/2012 - 16:58 | 3033501 Cangoroo
Cangoroo's picture

Source pls

Tue, 12/04/2012 - 17:00 | 3033506 magpie
magpie's picture

It was a rumor today. The last time the ESM rumor was floated, it happened right after market close. With this one, the effect has to be sustained to keep the dollar strong into 1)fiscal cliff clown show but more importantly 2) Any FED operation later in December.

btw i am not Euro short

Tue, 12/04/2012 - 17:03 | 3033518 Cangoroo
Cangoroo's picture

Yes I heard this rumour too. Just state it.

Tue, 12/04/2012 - 17:04 | 3033519 magpie
magpie's picture

It's only a rumination - don't turn into an algo headline or you will be caught in the short squeeze until then.

Tue, 12/04/2012 - 17:08 | 3033525 butchee
butchee's picture

the algos start with the comments section at zh

Tue, 12/04/2012 - 17:10 | 3033529 magpie
magpie's picture

I'ts a short squeeze algo headline then

Tue, 12/04/2012 - 18:23 | 3033699 SokPOTUS
SokPOTUS's picture

Fade ZH, lol.

Tue, 12/04/2012 - 19:57 | 3033903 CPL
CPL's picture


Google it and read it you'll get an idea what's happening.

Tue, 12/04/2012 - 16:54 | 3033490 moskov
moskov's picture

All these third world countries can give a rest about fighting a trade war. They think they have something to fight with. Yeah right, you meant like Europe the paper tiger. Who needs their shitty currency when they can't even take back their gold from the fed.

Tue, 12/04/2012 - 16:58 | 3033500 Global Hunter
Global Hunter's picture

Moskov, Brazil has been getting resources out of the ground, so they do have something to fight with vis a vis the great powers.

Tue, 12/04/2012 - 17:44 | 3033608 DoChenRollingBearing
DoChenRollingBearing's picture

Peru´s case is different than Brazil´s, as there is relatively little industry (except food).  But the currency is STRONG (and not just reflecting dollar weakness).  Net all of that out, and it is great to be a bearing importer here.

Soon I hope to report in on the BIG-TIME natural gas powered car fleets here.  We just filled up with gas today!  I still do not understand why we cannot do the same in the USA.

Tue, 12/04/2012 - 16:58 | 3033495 Global Hunter
Global Hunter's picture

Why did Reuters feel the need to call the finance minister outspoken?

"Brazil’s outspoken finance minister, Guido Mantega, said in an interview"

Tue, 12/04/2012 - 16:59 | 3033504 Karlus
Karlus's picture

Would you prefer corpulent or myopic? How about blusterous or disingenious?

Tue, 12/04/2012 - 17:03 | 3033517 Global Hunter
Global Hunter's picture

"finance minister" would do fine or at least until they start saying "the outspoken Timothy Geithner", or "the outspoken Christine Lagarde" or the "outspoken Ben Bernanke". 

Objectivity in journalism and all that.

Tue, 12/04/2012 - 17:18 | 3033553 Toolshed
Toolshed's picture

"Objectivity in journalism and all that."

Objectivity and journalism in the same sentence? You must be kidding.

Tue, 12/04/2012 - 17:20 | 3033560 Dr. Richard Head
Dr. Richard Head's picture

At least the journalists got the MissBumBum contest right -

Tue, 12/04/2012 - 17:24 | 3033570 Ookspay
Ookspay's picture

The American media are as useless as tits on a boar. Unless you are a Saul Allinsky radical, and then they are your most trusted accomplice, OFF WITH THEIR HEADS!

Tue, 12/04/2012 - 17:29 | 3033579 NotApplicable
NotApplicable's picture

Anybody who believes that objectivity can exist in within an opinion... well, I guess they get what they deserve.

What is so hard to understand that ALL opinions are formed within the belief system known as "reality" that exists within the human mind.

Simply put, an unbiased opinion is NOT an opinion, but rather a nullity.

Tue, 12/04/2012 - 17:42 | 3033610 Global Hunter
Global Hunter's picture

NotApplicable, surely you see a conflict in interest in a media organization selling themselves successfully to 95% of the Western World's population as an unbiased reporter of truth, while subtly including political propaganda in their pieces? 

If I went back to a university and referenced some Reuters articles in an essay, it would be accepted I bet, but I also think that if I began referencing NotApplicable it wouldn't go down so well. I'm just pointing out the hypocrisy of that, because I am willing to bet you're less conflicted than Reuters is, and you'll ultimately do me less harm.

Tue, 12/04/2012 - 18:18 | 3033693 Ookspay
Ookspay's picture

Exactly right. Trayvon Martin is the perfect example of media selective fact finding designed to incite and influence.

Tue, 12/04/2012 - 18:09 | 3033677 Ookspay
Ookspay's picture

Selective reporting of what they want to tell us is not journalism, it is manipulation of the masses.

Tue, 12/04/2012 - 17:34 | 3033594 Global Hunter
Global Hunter's picture

I am not kidding, I find the lack of objectivity in journalism and education the most worrying aspects of this current situation. 

Tue, 12/04/2012 - 18:27 | 3033709 Panafrican Funk...
Panafrican Funktron Robot's picture

You haven't really started down the rabbit hole yet then, have you?  Propaganda is the most worrying aspect of the current situation?  Shit, man, that's just the tips of the tentacles.  

Tue, 12/04/2012 - 18:11 | 3033679 moroots
moroots's picture

Let's go with cromulent.

Tue, 12/04/2012 - 17:26 | 3033576 WTFx10
WTFx10's picture

Reuters owned by Rothschild's.

Brazil not following the game plan. Shame

    Surprised they didn't call him a terrorist for going against the global economic cluster fuck that all the puppets have been preaching to us for the last 40 years. Protectionism is Bad, Globalism is good. Can't exploit workers in other countries and make huge profits if you limit imports. If you manufacture as much shit as possible in your own country and sell it to the people who make their own shit. How you gonna make any money? The only way anything will change for the good is to do everything the puppets tell us not to do. They are always the first ones to say what really ,really bad things will happen to us if we don't do what they tell us. Bank Bailout comes to mind.    

   We don't know what would have happened because NO fucking one can predict the future. In the centrally controlled financial cluster fuck some one comes up with a plan and tells you BAD things will happen if its not implemented 99% of the time the only really,really bad things that will happen are to the people telling you bad things will happen. Greece, Spain,Italy comes to mind. Once the plan is implemented the really,really BAD things happen to everyone else. Perfection.


Tue, 12/04/2012 - 17:30 | 3033587 NotApplicable
NotApplicable's picture

"Do as I say, and nobody gets hurt."

Tue, 12/04/2012 - 18:30 | 3033713 Ookspay
Ookspay's picture

Dontcha mean One move and the nigger get's it?

Tue, 12/04/2012 - 18:53 | 3033769 forwardho
forwardho's picture

The CCFCF, I like that Sir WTF. Perfect description of present situation.

Tue, 12/04/2012 - 17:01 | 3033510 lolmao500
lolmao500's picture

When trade wars become wars.

Tue, 12/04/2012 - 17:02 | 3033511 AldoHux_IV
AldoHux_IV's picture

The driver = multinational corps scouring the world for the last remaining consumers that then buy politicians

The enabler = psychotic politicians/centralbankers looking to push credit upon a nation of fat greedy consumers thinking they can create jobs or "growth"

The end result = under and high levels of unemployment as local economies are taken over by large multi players and inflation as the credit card gets bigger

The vicious loop = trying to find "growth" and create "jobs" we keep doing the same thing hoping for a different result, but the only result we get is inflation, imbalances, and a growing global elite hell bent on securing their power over their debt slaves

Tue, 12/04/2012 - 17:08 | 3033526 Super Broccoli
Super Broccoli's picture

this shows how reckless moneyprinting will kill the WTO ;-)


at least Berny would have been usefull somehow !

Tue, 12/04/2012 - 17:10 | 3033527 Dr. Engali
Dr. Engali's picture

The country’s slowdown and the government’s response to it is a growing concern among U.S. officials worried that Brazil may be charting an aggressive new course — away from the globalized, open path that the United States has advocated successfully in Mexico, Colombia and some other Latin American nations, and toward the state-guided capitalism that the United States has been battling to change in China

Come on John you don't believe this do you? If anything the U.S is trying to drag us closer to China's model. We are more centrally planned than ever. Free markets ( as free as we ever had them) are dying a little more each day.

Wed, 12/05/2012 - 09:23 | 3035114 Urban Redneck
Urban Redneck's picture

There isn't even a DTA in place between Brazil and the US, much less a FTA.

There has been antagonism between the foreign ministries for years, even tit-for-tat BS over VISA FEE equalization.

Putting an ugly arrogant dumb ass like Cuntlery Clinton in Foggy Bottom hasn't helped any,

But neither does the fact that Brazilians tend to be even more nationalist than Americans.

Freedom of economic activity versus State control is entirely irrelevant to the US-Brazil situation.

It is laziness on the part of the author to conflate internationalism with hegemony under the conflicting delineations of globalism.

Tue, 12/04/2012 - 17:10 | 3033528 tooriskytoinvest
tooriskytoinvest's picture

‘We Are In The Midst of The Keynesian Depression’: UNPRECEDENTED Central Bank Interventions Backfire As House Price Keep Raising While Wage Growth Goes Flat. Discretionary Spending Took A Notable Turn For The Worse, And American Households Hit 43-Year Low In Net Worth.

Tue, 12/04/2012 - 17:11 | 3033535 Catullus
Catullus's picture

What's going on to Pandora? The short sellers sniping it in the AH? Complete ponzi bullshit.

Tue, 12/04/2012 - 18:52 | 3033766 Panafrican Funk...
Panafrican Funktron Robot's picture

Large increases or decreases in Pandora's stock prices is super not shocking.  What is it that they produce again?  Oh, right.  High moat then?  No?  Fuck, it's about as worthless as GRPN.  That said, if it went up 50% tomorrow on.... nothing, it would not surprise me.  

Tue, 12/04/2012 - 17:14 | 3033543 Toolshed
Toolshed's picture

"and toward the state-guided capitalism that the United States has been practicing to change into China."

There......I fixed the OBVIOUS typo in this article.

Tue, 12/04/2012 - 17:20 | 3033558 Ookspay
Ookspay's picture

Ruh Roh, the foriegners have realized that we have been exporting inflation in the form of USD and they don't like it. Before you know it they will demand gold as payment for their goods, bloody heathens.

Tue, 12/04/2012 - 17:22 | 3033563 Seasmoke
Seasmoke's picture

Can we sacrifice Bernanke as a peace offering ?

Tue, 12/04/2012 - 18:16 | 3033689 news printer
news printer's picture

Yes We Can

Tue, 12/04/2012 - 18:48 | 3033758 Sweet Chicken
Sweet Chicken's picture

Change I can believe in!

Tue, 12/04/2012 - 17:23 | 3033564 buzzsaw99
buzzsaw99's picture

brazil isn't run by traitors unlike the usa

Tue, 12/04/2012 - 19:05 | 3033784 nonclaim
nonclaim's picture

The Brazilian president was a bank robber and guns cache controller in her commie rebel years ...

If nothing else, she had bigger balls than the "community organizer".

Tue, 12/04/2012 - 17:50 | 3033634 EscapingProgress
EscapingProgress's picture

America has pissed off the entire globe. Every country on earth hates America. As soon as the American military gets tied up in the Iranian death trap all of the victims of America's foreign policy and monetary policy will begin to act out (as we can see it is already happening) and that is when it all hits the fan. America has unwittingly gotten itself into checkmate. Get out while the gettin' is good because if the path taken by Rome under Diocletian is again being taken by America the American borders will soon be closed going both ways - nobody in, nobody out.

Tue, 12/04/2012 - 18:01 | 3033664 formadesika3
formadesika3's picture

US prison population per 100,000:


Tue, 12/04/2012 - 18:08 | 3033675 Darth Rayne
Darth Rayne's picture

You do piss us off but we don't hate you. We can see what your Government is doing to you and that's far worse than what we would do.

It might help if you recalled your military and stopped printing dollars.

Dollars are your main export and you are printing them into oblivion. I know you ZH ers know this is fucked up.

Time you brought your Government to heel. Short sharp shock. Us brits ought to do the same. So should the Spanish and Greeks. Fuck bernanke and fuck any central bank. Fuck the monopoly money.

Talking of money, here in the UK if you buy physical gold or silver the TAX man is notified. WTF. That can't be good. I look forward to some armed Govt thug trying to take it from me. He will fail and I will have a firearm, sweet. A free gun.  :-)

No doubt I am being monitored, fucking unreal. My wealth being wasted by the governemnt monitoring people who are pissed off at them for wasting their wealth. Catch 22 or just fucking unreal. Now, where's my fucking gun!

Fuck gold and silver get ammo and an ammo dispensor!



Tue, 12/04/2012 - 18:25 | 3033706 BraveSirRobin
BraveSirRobin's picture

At least you are only being monitored electronically, and not via the little window in the cell door.

Ain't technology great?

Tue, 12/04/2012 - 20:47 | 3034046 Acet
Acet's picture

The TAX man is only notified if you buy more than a £5000 at once or £10000 a year.

Also you can get your Gold from suppliers elsewere in Europe (hurray for the open market). The cheapest supplier I know is actually in Holland.

Tue, 12/04/2012 - 18:46 | 3033755 toomanyfakecons...
toomanyfakeconservatives's picture

Unwittingly? No... it's been part of the plan all along.

Tue, 12/04/2012 - 18:16 | 3033687 q99x2
q99x2's picture

I vote for state capitalism and the young lady's lips.

Tue, 12/04/2012 - 18:38 | 3033728 falak pema
falak pema's picture

those lips aren't made for collectivised use. Thats no pig's sty! 

Not saying its kate middleton either! 

Tue, 12/04/2012 - 18:17 | 3033690 topshelfstuff
topshelfstuff's picture

I have been expecting to see a coordinated ReValuation by the BRIC, BRICets, or some call the EastBloc of Nations (not geographically) since most of Latin/South America is included. It would likely look something like a very large Raise in the Value of their currency vs the USD. An example could be something like China Pegging at 2 to 1 vs the USD and ALL the other nations doing the same by Pegging to China's renmimbi.

This would be done simultaneously, same day and time. Would change Nothing in all the Trades amongst themselves, plus give them, the Nations and People, access to Commodities (all price quoted in USD) at a fraction of what they are paying now (and an ever growing larger purchaser of). Currently it takes about 622 renmimbi to equal $100/US, afterwards it would take 200 renmimbi to equal $100/US. You can use Gold, any Base Metal, Crude Oil, Grains, Rubber, Cement, etc... , all the stuf they're already the largest purchaser of and the EastBloc growing more and more...and give it serious thought. At the current time Trade with the WestBloc brings along currencies that are being shunned more and more. The size of the Pie is getting bigger for the EastBloc/BRICets and smaller for the US/UK led WestBloc. Its either that or the USD changes by the addition of two decimal places, making $1.00 Current Dollar equal to $100.00. That allows for Foreign Debt to be Paid at 1% of Current, though technically these debts would still "appear" to be Paid In Full. There would be at least two Line Items, whereby all Mortgage Debt would remain Booked at the Current level but Payable with the New USD, and the same with Student Loans. This would eliminate these two problems [forget the blame game for now] and all future mortgages would be correctly re-written. This also would apply to everyone, so those who believe blame falls on those who took the mortgage, instead of the makers of the mortgage, would also get to pay off their mortgage and student loans with the New USDs.

W just have to see which BLOC moves first....and that's the rough draft, open to fine tuning

Tue, 12/04/2012 - 18:43 | 3033748 AurorusBorealus
AurorusBorealus's picture

All of South America is charting this course increasingly, and Brazil is the latest.  Among one another, however, the South American nations enjoy tariff-free trade by and large through the Mercosur.  As such, the Mercosur is becoming quietly an ever more powerful economic block and the path charted by the South American countries is heartening.  They are finding a way through the mindfield of cheap Asian labor and Western financial chicanery, by using fair trade practices to lock out both East and West, national currencies, sovereign governments (unlike in Europe), a free-trade union of like-minded nations, and the assets of a resource-rich continent.  It is possible that the future, whatever there may be of it, is in South America. 

The problem here in South America, however, as in the U.S. and Europe is oversized governments.  However, the problem is not entitlements, it is simply too much government (too many employees: police bus-drivers, etc...) , which is an easier problem to solve politically since 50% of the population is not receiving transfer payments.

Wed, 12/05/2012 - 07:32 | 3034987 smacker
smacker's picture

Yep. But where it falls down is when anybody from Brazil pays a visit to the outside (to US, Europe and Asia) and is faced with a far wider range of quality stuff to buy at prices which are anything from 40% to 80% less expensive than their home country, due to protectionist import taxes imposed by their government. Home made goods are often poor design and sub-standard manufacture and not the latest technology.

Tue, 12/04/2012 - 18:59 | 3033754 WhiteNight123129
WhiteNight123129's picture

Rethoric stuff. Who is most statist China or the US? I am not sure. China is right now liberalizing its deposit rates, China will sacrifice the SOEs over food and energy inflation, why? Because that is the way to stay in power in China. Unlike the West, people in China have toppled governments over inflation in 1948 and almost did it in 1989. So the Chinese communist party which is letting its people buy Silver and Gold and not taxing them on ~capital gain~, knows too well what it costs ultimately to bail-out endlessly the set of corporations which are oligarchly controlling hte economy. In teh US the gov is controlled by corporations. In China Corporations are controlled by the government, so State Owned Entreprises are a mean to an end. If the end is to stay in power and now it means making deposits good at the expense of corporations (Buffet would cry in such country) and letting people buy precious metals, so be it.


Tue, 12/04/2012 - 18:49 | 3033762 toomanyfakecons...
toomanyfakeconservatives's picture

They don't call it the B(razil)RICs *alliance* for nothing.

Tue, 12/04/2012 - 18:51 | 3033765 WezTheJuic
WezTheJuic's picture


An applied trend? For that you also need to realize the main tangents of where these individual actions lead to.

YET, the list is growing regarding individual countries who are bucking that trend as well. Which is why the Central Bankers/U.N. was also designed to bring them back into the fold. Full circle, and the realization of that circle within its applications/implications is why that circle is falling apart.

AND for that, that will be defined on how the censorship game is applied to those levels of communication.

Keeping people busy.

Thank-you for sharing Tyler, and to the people making comments within this section.



Tue, 12/04/2012 - 19:43 | 3033870 Stuck on Zero
Stuck on Zero's picture


 “We are only defending ourselves to prevent the disorganization, the deterioration of our industry, and prevent our market, which is strong, from being taken by imported products,” Brazil’s outspoken finance minister, Guido Mantega, said in an interview. 

I wish we had someone in our government who would effect policies like this for us.

Tue, 12/04/2012 - 19:47 | 3033885 ShrNfr
ShrNfr's picture

Smoot-Hawley in drag. What could possibly go wrong??

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