• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Brazil Central Bank Cuts Benchmark Rate From 9.75% To 9.00%

Tyler Durden's picture


The global reliquification continues:


First India, now Brazil (even if the move was largely expected). When are Russia and China joining the fray?

From the BCDB:

Monetary Policy Committee reduced the Selic rate to 9% per year


18/04/2012 20:06:00


Brasília - The Monetary Policy Committee considers that at present, remains limited risks to the inflation trajectory. The Committee further notes that, until now, given the fragility of the global economy, the external sector has been disinflationary.


Thus, in response to the process of adjusting monetary conditions, the Committee decided unanimously to reduce the Selic rate to 9.00% pa, without bias.

Brasilia, April 18, 2012

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Wed, 04/18/2012 - 19:18 | 2356548 CClarity
CClarity's picture

Will it weaken the currency, as they hope, or is it a sign that "there are problems out there . . . and not just in the developed tired world"? 

Wed, 04/18/2012 - 19:38 | 2356624 ACP
ACP's picture

Yes, because their benchmark is "only" 9% more than the Fed funds rate.

Wed, 04/18/2012 - 19:53 | 2356660 SHEEPFUKKER

Race to the bottom continues. Brazil is way behind.  9%? Common, you can do better than that. 

Wed, 04/18/2012 - 22:08 | 2356986 AldousHuxley
AldousHuxley's picture

9% - 7% inflation = 2% growth.


but government is printing to be able to afford nice soccer stadiums for the world cup in 2014 and olympics in 2016.....


Wed, 04/18/2012 - 22:22 | 2357012 Bear
Bear's picture

I'll take it since 1.5% - 5% = -3.5% for us

Thu, 04/19/2012 - 03:47 | 2357454 GernB
GernB's picture

You can offset that -3.5% by investing in the S&P which made a whopping -0.00318% last year so you get a grand total return of -3.50318%

Wed, 04/18/2012 - 23:34 | 2357133 Seer
Seer's picture

And 2% means a COMPLETE doubling of Brazil's economy in 35 years.  How much you want to bet that this won't happen?  Really, WTF do they have that would double, that the rest of the world, as it continues to slide down into the pits of the corrective parabola, would be begging for (with no money)?

And don't get me started on sports arenas or the Olympics!

Thu, 04/19/2012 - 04:00 | 2357461 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

NO WAY Brazilian inflation in only 7%, gals.


Petrobras took a beating in the market because the BR goverment decided to use it as an anti-inflation tool.  They held gas prices down through the national gas corp.


Anyways, what kind of wtf place can be called Brasilia??  wtf?  It's like the name of the capital of Austria or some other stupidity, gals 

Wed, 04/18/2012 - 20:21 | 2356739 phungus_mungus
phungus_mungus's picture



I say cut it to 0.25! 


Wed, 04/18/2012 - 19:27 | 2356590 slewie the pi-rat
slewie the pi-rat's picture

and southAfrica?

Wed, 04/18/2012 - 19:59 | 2356689 greensnacks
Thu, 04/19/2012 - 05:12 | 2357518 johny2
johny2's picture

Exactly. The Currency war is heating up. The loosers are usual 90% of population, who are going to pay the bill.

Wed, 04/18/2012 - 19:30 | 2356597 Caviar Emptor
Caviar Emptor's picture

Same day Brazil eases.....Bank of England took a hawkish tone due to inflation fears.

It's a BI world. BIflationary, that is. 

Wed, 04/18/2012 - 19:30 | 2356598 Debeachesand Je...
Debeachesand Jerseyshores's picture

"there are problems out there.... and not just in the developed tired world"?

IMHO,the Great Depression II is just around the proveribal corner.

Wed, 04/18/2012 - 19:30 | 2356599 Debeachesand Je...
Debeachesand Jerseyshores's picture

"there are problems out there.... and not just in the developed tired world"?

IMHO,the Great Depression II is just around the proveribal corner.

Wed, 04/18/2012 - 21:51 | 2356957 Dr. Engali
Dr. Engali's picture

Just around the corner? We've been in a depression since 2000, we just masked it over with debt.

Wed, 04/18/2012 - 23:36 | 2357143 Seer
Seer's picture

Yes, but it hasn't been wheeled out to the showrooms yet.

Wed, 04/18/2012 - 19:34 | 2356608 Rainman
Rainman's picture

This'll get Bill Gross' attention for sure.

Wed, 04/18/2012 - 20:51 | 2356813 LongSoupLine
LongSoupLine's picture



yep, and the algos tomorrow morning as they choose to focus on this rather than the pending horrific Spanish bond fiasco.

Wed, 04/18/2012 - 19:34 | 2356610 dannyboy
dannyboy's picture

This also coinsided with the closing of the Stolper trade unwind, GS frontrunning brazil CB too?

Wed, 04/18/2012 - 22:46 | 2357064 LeBalance
LeBalance's picture

coin-sided (omfg!)  Freudian!  lol.

Wed, 04/18/2012 - 19:34 | 2356611 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Brasil better hurry up and buy some gold if they are going to devalue their currecie.

Wed, 04/18/2012 - 19:44 | 2356637 greensnacks
greensnacks's picture

I hear Syria has some for sale.

Wed, 04/18/2012 - 19:47 | 2356646 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

No, that is Hillary's.  She isn't satisfied, even after she got Libya's.

Wed, 04/18/2012 - 21:48 | 2356951 Dr. Engali
Dr. Engali's picture

Is there anything that can satisfy Hillary ? Anything ? She obviously couldn't satisfy Bill.

Wed, 04/18/2012 - 22:50 | 2357069 LeBalance
LeBalance's picture

Garbage: The World Is Not Enough:


Wed, 04/18/2012 - 23:37 | 2357146 Seer
Seer's picture

And I never hear all those right-wingers trumpeting how they hate the bitch, now that she's waving the war flag (what a bunch of fucking hypocrites).

Wed, 04/18/2012 - 19:37 | 2356621 chump666
chump666's picture

wow...and oil is still bid over 100.  Silly Brazil, you lot bought en masse sh*t loads of USD's when hyperinflation hit your shores in the early 90's.  But it's China, Vale Iron Ore demand collapse I guess is a freak out.

Australia will cut next.

Wed, 04/18/2012 - 19:48 | 2356645 Pete15
Pete15's picture

Gotta love these currency wars. Sadly Gold stocks keep going down the drain, NEM has been ass raping me along with ASA. Still got the physical but I want to have the Ron Paul type protfolio. http://www.informationliberation.com/?id=36289 Everthing Ive researched makes me confident in the long run Gold stocks will perform but its only my second year investing and these gold stocks are killing me. Im not going to sell at the lows to pick up more pysical but Im feeling really stupid today not getting more physical. 

Wed, 04/18/2012 - 19:50 | 2356651 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You are DCA'ing right?  If you like miners, which I do, then you should keep buying them.

Wed, 04/18/2012 - 20:03 | 2356697 Pete15
Pete15's picture

I do like them and I also own SVM and IPOAF but all of them minus IPOAF has sucked. All Im saying is that its frustrating, if I can be a monday morning quaterback for a minute I could have bought more physical and more high dividend paying stocks. Lets just say my timing has sucked. I dont know how you guys can trade and be so confident everyday its impressive. I believe with all my heart that my inflation bets will pay off big one day but for the past two years my performance hasnt been where Id like it to be. Seeing more red than green never makes anyone comfortable. You guys were smart enough to start your gold buying years and years ago when I was still in grade school. Yet again the research tells me to hold on but I always fear being wrong. 

Thu, 04/19/2012 - 01:23 | 2357344 Pete15
Pete15's picture

Awesome thanks a ton, Im calling my broker tomorrow!

Thu, 04/19/2012 - 00:45 | 2357289 walküre
walküre's picture

Tough tough tough. Most miners are on a downward spiral since 2011 and haven't come back. There are some real good ones, real cheap. Semafo Inc. produces 61,000 oz Au last quarter with cash margins of $900 to $1000 per oz. Stock is trading at under $5 bucks in Toronto. Almost seems like the rally in miners is done. Nobody wants to touch anything right now.

Thu, 04/19/2012 - 01:24 | 2357351 Pete15
Pete15's picture

I really appreciate the recomendation, Ill be checking it out. Im also interested in GORO since you can get dividends in gold and silver now. 

Wed, 04/18/2012 - 19:53 | 2356661 StockHut
StockHut's picture


Wed, 04/18/2012 - 19:59 | 2356684 SHEEPFUKKER

You get both. 

Wed, 04/18/2012 - 23:40 | 2357156 Seer
Seer's picture

And a free FLAG! (one that your children will have to pay for)

Wed, 04/18/2012 - 19:58 | 2356686 chump666
chump666's picture

China appreant going to cut RRR sent AUD bid (HFTs mania).  I think it's jaw boning, those crazy Chinese sent oil bid against their wide YUAN band and 99% of Chinese companies dump Yuan and buy USDs.  A  total mess. 

China is a doomsday engine.


Wed, 04/18/2012 - 20:13 | 2356728 chump666
chump666's picture

Dumb asses

* Xinhua report saying China will ease "at appropriate time" not a surprise * The AUD/USD spiked to 1.0388 on the headline but has now eased below 1.0370 * The AUD/USD underpinned by AUD/JPY out of Tokyo


Wed, 04/18/2012 - 20:08 | 2356712 Bunga Bunga
Bunga Bunga's picture

That Brasilian butt going down hard.

Wed, 04/18/2012 - 20:43 | 2356791 Global Hunter
Global Hunter's picture

Is anybody taken aback by a country cutting to 9%?  I mean 9% is soooooo 80s, if these guineas wish to get into the big boys club they need to start talking negative interest rates or at least cuts to 1.5 or 2%.  Get with the program guys!

Wed, 04/18/2012 - 20:57 | 2356846 Platinum_Investor
Platinum_Investor's picture

If India or Brazil raised rates the thieves would use that as an excuse to RAID Gold just because.

But cuts.  Well lets send gold down as well.

Tough fighting this manipulation.

Wed, 04/18/2012 - 21:04 | 2356857 navy62802
navy62802's picture

Well, at least Brazil's central bank actually charges interest.

Wed, 04/18/2012 - 21:44 | 2356941 Dr. Engali
Dr. Engali's picture

Central banks of the world unite.

Wed, 04/18/2012 - 22:19 | 2357006 Bear
Bear's picture



New Verb: to zirp - to irrationally reduce your sovereign currency to zero

I zirp

You zirp

We zirp

They zirp

Wed, 04/18/2012 - 23:20 | 2357108 NotApplicable
NotApplicable's picture

Sad thing is, it's actually very rational, if you happen to benefit from it.

Wed, 04/18/2012 - 23:20 | 2357102 pleseus
pleseus's picture

Gold and Silver are on sale. Buy low sell high.. The global Print fest winds back up. Deflation was so 2011. Inflation will be the theme at the end 2012.

Thu, 04/19/2012 - 00:43 | 2357288 Non Passaran
Non Passaran's picture

I agree. According to my inexperience, this is quet before a major inflatory storm.

Thu, 04/19/2012 - 04:31 | 2357482 Nussi34
Nussi34's picture

Sell to get what? Paper?

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