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Brazilian Real Crashes Most In 4 Years As Hope Fades
Following recent strength on the heels of hope for a new finance minister, news that Ruosseff has sent the minimum-wage-hike Bill to Congress appears to have crushed the hype of any fiscal rectitude and sent Real tumbling. Down over 4% - the most since September 2011 - BRL is back above 4.00 per USD, giving up all the recent gains.
Broad weakness in EMFX...
Seems to have been exacerbated by:
- *BRAZIL ROUSSEFF SENDS BILLS ON CIVIL SERVANT WAGES TO CONGRESS
A Bill that could cost BRL 4.77 billion, wrecking hopes of any improvment in the fiscal situation. As Bloomberg reports,
Brazil’s bigger-than-estimated minimum wage increase and potential credit expansion make it harder for govt to control around 11% on year inflation and cut budget gap, Marcelo Schmitt, portfolio manager at investment firm Sul America, says in a phone interview.
These initial policy steps after Barbosa replacing Levy as finance minister are concerning, says Schmitt.
And so...
This is the biggest drop in BRL since September 2011.
Charts: Bloomberg
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Brazil has been crushed by the decline in oil prices and slowdown in China.
The Nobel Prize Winner's war on oil has reduced world oil revenues over $3 trillion a year. Brazil's oil revenue loss has been over $100 billion a year, about 5% of GDP.
Brazil will not recover until oil recovers.
This could be one of the most interesting lead-ups to the Olympics since perhaps the 30s.
I think they're in the shit with the Olympics.
The BRICS aren't looking so good now, are they?
While the USA and Europe have our problems, they are in deeper. Why? My guess is that their totalitarian temptations make them even worse than our Junior Varsity .govs.
Are you serious? 100,000 high paying jobs lost in the US from low oil prices. Same is going on in Canada. Debt at all level (municipality, state, federal) is at all-time high. States like Illinois started printing virtual currencies, one month delay in pension payments (this is nowhere in the world). Look back 15 years ago where those countries (BRICS) where and where they are now and you will figure out who is actually developing.
Most of the BRICS have done well over the past 15 years. No argument there.
But, the corruption is extremely high in all five of them. And they have (likely) hit the limits of easy (centralized planning) growth.
* * *
Tell us, is St. Petersburg nice this time of year?
They have corruption because it is not legalized like here in the US. You can legally pay police, judges, congressmen, senators, school boards etc.
Yeah, I could see the whole Lula 'economic miracle' unwinding like the 1930 "european reconstruction" theme trade. No way PBR was the only "car wash" that was going down post-1995.
Brazil is the future for the USA without reserve currency status
It's all ok though right? they all bought gold before the Crash ? so everythign is good.
Gold up over 30% in Real this year alone. Up 76% the last five years and 245% the last ten.
Venezuela and Brazil are oil brothers. Chile only swears by Copper. And Columbia by coca. As for Peru it hopes that alkaline Lithium will make it king.
I don't know about the others; But Argentina seems to be looking for something mysterious called the Pope.
thanks janet
I think Tyler for got the pics: http://hotbrazilianladies.blogspot.com/
They are hot. The Rio beaches are warm but the ocean polluted, the view generally exceptional. Ahhhh also the women. The "program" will be strong and with the dollar so strong a great playground for the American if you can keep from being mugged and can stomach 2 great steak dinners with beers for like $25.
Yeah and the hell with these pics, they go topless in front of the Melia and wear a string bottom termed flo dental. Truly awsome place to shop. Seen as good as a tourist many, many times. Sometimes hard to imagine, better. It is all what you like anyhow. Just watch out for the trannies. They are all around and can fool the best of us. What a place.
Do they spell that country W E I M A R now?
The payment to striking laborers in the Ruhr region was one of the events that got hyperinflation rolling back in the good ole days of the 1920s. Just be sure that the money flows and the people will love you....until they realize you have ruined the medium of exchange.
The moral is this: do not save in the medium of exchange. Use it for paying bills. If there is any left over...buy something real, I suggest gold...but what do I know....
Weimar was a problem caused by French and Belgian Occupation of the Ruhr and a General Strike together with Communist Uprising in Thuringia and a Putsch in Bavaria. Germany was disintegrating as a country and Stalin was pushing weapons to the Communists to facilitate a takeover.
Brazil is somewhat better
Yes, boys and girls. It's "crashing" in the Reference Frame of the Ellastic Fiat Petrodollar.
They would n;t have this problem, if they adopted a new monetary Reference Frame. And that can't happen until the Russian and Chinese get their shit together, and bring their version of SWIFT (CIPS, RIPS) online for the BRICS and EMs.
Until then, the misery and downward spiral will continue for the aforementioned. What's the holdup? Are the Fifth Column putting sand in the gears, and thus causing delays? It's not that a complicated IT problem to take from Beta-testing to Full Launch -- unless the political pot is being stirred by the wrong people.
Simplicity & Clarity, kids. Simplicity & Clarity. Got some?
I view this a sa great buying opportunity!
Although the COUNTRY will go down (please tell me which one will not?), some REGIONS of Brazil have excellent qualities for strategic relocation and some great life hedge properties available here - http://visa4brazil.com/
If (well, just not sure when) a TSHTF situation will happen, I bet these regions in Brazil will be safer than most of the US!
Think water and food security. Oh, did I forget to mention the women factor?