Brazzil

The Brazilian republic was not an ideological offspring of the republics born of the French or American revolutions, although the Brazilian regime would attempt to associate itself with both. The republic did not have enough popular support to risk open elections. It was a regime born of a coup d'état that maintained itself by force.

Oligarchy seems like such an anachronistic word, like fiefdom, or serf. That is not to say that 'super rich' ala Warren Buffet, or Bill Gates or Rocherfeller, or any other of the American 'elite' the 'blue bloods' are not a kind of capatilistic oligarchy, but it just seems so much more effective then Brazil's historical efforts at economy and government.

They have done so much more with the wealth that they possess. Brazil is more closely alligned with the polst Civil War Jim Crow South. Up until the middle sixties the South was a kind of fifedom. Today Dallas is the New York of the South. It is a financial and capital empire.

I think it is money that motivates things like justice, equality, growth, opportunity, humanity. And over the past five years Brazil has made more money than it has ever had. The oligarchy makes more money empowering people than it ever will by not. We live in a global economy where competition is instantaneous, where E=Mc2 where an idea or thought is a computer mili sec. Capital moves at the speed of light. It is no longer transportation by mules, or on the backs of people that money is made, but by trains, planes, ports, industry, banking, investment. Coffee was Brazil it is no longer. Oligarghical thinking was the way of Brazil, now it is more of Hong Kong, or New York's thinking. Their will always be the super rich, but it is the wealth of the intelligence of the population that is the wealth, the wealth of the land multiplied by the intelligence of the masses.

Todays youth are instantly in touch with intelligence. They are no longer kept. It is the drive of the possible that motivates the country to transcend its antiquated archaic political modalities. The 'old boy network' they exist, but their is other genius in this other century.

The oligarchical horse has best be put to out to pasture. It is a new century moving at light speed. There is no time for poverty, despotism. The time is one of mind, not brawn. Of law, jurisprudence, trasparency, integrity and honor.

Brazil can afford other methods that produce greater wealth. It is trading with the world, not as a petty despot, but as an economic giant in becoming. Let it behave like one.

The rich will get richer along with everyone else. Or the rich will be like some of the old Southern Mansions in the South, in a state of stagnancy and decay.

Wealth is not achieved through oppression, but through generosity of spirit by lifting the lives ofothers, and above all through intelligent action.

If you do not learn from history you are damned to repeat it.

aes...

nice long write up but let us see where the favela dwellers' children are 20 yrs from now. they will probably be earning the same 100-150 real their parents are earning, still wont have a strong public school system that will prepare at least a % of them for a college education, and a solid social and hlth system for the poor. if they above occur....then the poor in time will hold their own with the elite. i dont see it happening anytime soon...unfortunately.

The Southern United States had by some standards the highest standard of living in the world in 1860. Southerners not only founded the country, but conquered all of the land and established the political
institutions including writing the Declaration of Independence and Constitution. No coincidence that Robert E. Lee was married to Martha Washington's great-granddaughter. Slavery was massively beneficial to
the development of the country in at least four ways: (1) was central to the earning of the foreign exchange that was so central to economic development under the gold standard (2) provided the cash crop
agricultural economy with what was effectively a elastic currency essential to development in the absence of a modern monetary regime (3) forced the free population to the frontier as the central driver
of territorial expansion (4) somewhat paradoxically, fostered democratic institutions supported by a broad class of independent property holders. And, yes, Virginians were the first abolitionists before the
movement was hijacked by a bunch of Bolshevik thieves. And, if you want to highlight decay, you would be better off focusing on the genetic defective Lincoln's syphilitic brain.

The moral for Brasil is that the way forward, contrary to the view of the author, is states' rights and free enterprise. Brasilia can't stop stealing just like the Yankees can't stop stealing. the only productive alternative is the free market. And, get rid of the ridiculous law requiring everyone to vote. Democracy is best as a process that protects against tyranny , not some corrupt socialistic construct that puts the
productive elements of society at the mercy of the mob.

$stupid question :
Then why is Brazil still so much UNDEVELOPED compared to the USA, despite the fact Brazil had far more African slaves than the USA ??????

Furthermore, Philippe Wagner, a regular writer in this site Ind< Race, happened to have written an article on this same subject of Brazilian slavery , at the early start of this site, in April 2002 !
I just remind the audience readers that Wagner is also a humanist who is raising money for humanitarian purpose...FOR BRAZILIAN POORS !

His article on Brazilian slavery is at :
http://www.iei.net/~pwagner/brazarticles/April2002.html
His foundation for Brazilian poors......Rythm of Hope in Brazil..... where you could find his many programs he helped is at :
http://www.iei.net/~pwagner/brazarticles/April2002.html
his site is a little bit messy, but by surfing in it, you will find the new site in the old site !

Hopefully many brazilians will say a big Thank You Philippe !

"Brazil is in need of a politician who has deep convictions in changing the country and not compromising with the corrupt political establishment that holds on to political power and who are incapable of rectifying the disparities that persist within Brazil society today."

I began to respond to the section I copied above when I remembered that I read the article below, "Lula's big chance" which contained most of what I was about to write. After the Lula' s first year as president I was hopeful he would be the one to effect the reforms needed. His first year was important because it proved that he was not a radical socialist out to ruin the pledging economic developments that had occurred in the 10 years prior the beginning of his presidency. Today, after five years of inept governance, I am no longer convince he is the one, but I still hopeful and I am sure Brazil does also.

"Lula's big chance"
The Financial Times: Published: May 24 2007

"Steady if unspectacular expansion, five years of current account surpluses and a strengthening currency, which earlier this month regained heights not seen since well before the 2002 financial crisis: Brazil's economy is undoubtedly on a firm footing.
But there is plenty more to do if Brazil is really to consolidate its recent progress, compete more effectively with rival emerging market giants such as China and India and make the transition towards developed country status to which Luiz Inácio Lula da Silva, its leftwing president, aspires.
Reforms designed to reduce the deficit arising from an expensive and dysfunctional public sector pensions system and cut the burden of taxes and bureaucracy on the private sector remain as essential as ever if Brazil is to expand faster than the modest 3-4 per cent a year rates being achieved currently. So do changes to Brazil's inflexible labour codes, modelled in large part on the practices of Mussolini's Italy.
Recently, the strength of the real has exposed the inefficiencies to a greater extent and the case for reform has become more pressing.
That is why it is so encouraging that Mr Lula da Silva appears to be countenancing such steps. At a forum created to examine Brazil's long-term social and economic development options earlier this month, the president said failure to consider reforms of this kind would be a "defect".
Signalling that more flexible regulations are needed to make it easier for employers to give jobs to younger workers, Mr Lula da Silva said: "It is not possible to say that things that were done in 1943 [the year the labour reform was introduced] do not need to be changed."
It will not be easy to push through change. Trade union leaders from Mr Lula da Silva's Workers' party have already served notice of their opposition. A few months ago key officials dismissed the possibility of labour reform.
But Brazil's president and his supporters have proved themselves adaptable in the past. Five years ago few would have envisaged the way in which the Lula government has brought down inflation. Price rises this year will average less than 4 per cent, a level comparable to those in Europe and the US.
Plentiful liquidity and high commodity prices will continue to favour Brazil for the foreseeable future. These conditions, however, may not last forever. Brazil has a unique window of opportunity. The country's political elites must abandon vested interests and encourage Mr Lula da Silva to forge a more ambitious strategy."

Education, health and welfare, and land reforms were not mentioned in the above article. They too are in need of reform. Brazil cannot continue with its inadequate educational system and the Bolsa Familia program is economically unsustainable and ineffective as currently setup.
In my opinion the Bolsa Familia program should be taken away from famillies and added to a reformed educational system where three daily meals are given directly to the children in school. This would accomplish two goals: (1) discourage famillies from having more children thus recieving more money, and (2) lenghtening the school day from the half day that I have observed in quite a few places. A highly educated populace will be needed if Brazil is to be propelled forward. Having all the economic fundamentals in place but unqualified, uneducated workers will not achieve this.

"Plentiful liquidity and high commodity prices will continue to favour Brazil for the foreseeable future."
I do not agree. Thus Brazil should prepare by having a reserve of at least US$200b for when the money now flowing into Brazil begins flowing out. At the same time Brazil's Central Bank needs to cut interest rate more aggressively to slow the inflow of so much dollars into brazil, while Brazilian companies effect efficiency so that they may continue to be competitive.

The United States was founded as a functional agricultural oligarchy, much like Brazil. But the U.S. was divided into Puritan industrialized North and and purely plantation slave driven Southern economy.

Some of the greatest minds were of Virginia in the '1700's. 'that all men are created equal' was written by a slave owner who did not regard as blacks as equals.

Brazil was essentially uniformly Portuguese. The U.S. was Britain, Ireland, Germany, Spain, Russia. There was greater diversity.

The Civil War was about money. The North was making all the money from finished products. The North industrialized, became part of the Industrial Revolution.

The South like Brazil was entrenched in what worked. There was no economic reason to change, certainly no moral or humanistic reason to change.

Their was greater intellectual diversity in the U.S. than in Brazil. The diversity produced currents of thought and change.

The end was a confligration over States Rights, vs National Rights. Brazil has that problem it seems, that there is not a strong enough central givernment, that individual states, oligarchies still function as independent fiefdoms.

The Nation is greater than any state. One nation, under God with liberty and justice for all.

Lincoln was a lot of things, but he sure could write. Jeffferson could also write, and he was a lot of things too. How do you keep slaves, if all men are created equal, that they are endowed by their creator with certain inalienable rights, among which are life, liberty and the pursuit of happiness. Unless of course you were black. Jefferson was a great thinker but he had a small hole in his head, a black hole.

The Civil War was about a lot of things, mostly money. It had little to do with the moral authority of slavery.

It was about power, which was the greater power, the State or the Nation.

somewhat paradoxically, fostered democratic institutions supported by a broad class of independent property holders. And, yes, Virginians were the first abolitionists before the
movement was hijacked by a bunch of Bolshevik thieves

I thought at that time there were no Bolsheviks. I am a bit curious about your statement.Would appreciate if you could clarify how the Bolsheviks thieves come into picture.

This debate is getting interesting.

1) Is not on the back of people, the sugarcane cutters, that 40 % of the 520 millions tons are cut ?
2) Interesting your comments on modern transportation ! You havent seen nothing in Brazil ! Never heard about BR 163 ?
the "highway" to transport the grains from Mato Grosso ? Never seen it ?

Ohhhhh.... you can see it now (quite recent):
http://www.casavaria.com/sentido/video/environment/amazon-highway.html

Hopefully you also paid attention not only to the "highway" quality and structure, but also to the many decades old....trucks !!!

And if you believe that due to world high grains prices Mato Grosso farmers are making a bundle, you would be just wrong.....as usual !
Here is part of an article published in a specialized site on Brazilian agriculture :
"30 May - Wednesday
In the RED........again!
If the quotation of the North American currency drops to R$ 1.80:1, Mato Grosso will accumulate losses of R$ 263 million.
The trend of the dollar has fallen disastrously from 2.15:1 to R$ 2 the last week of May and imposes losses for Mato Grosso farmers exactly at the beginning of the planting of the 2007/08 crop.
In accordance with survey of the Agricultural Agency (AgRural), the rate or return on operational cost of the producer of soy in northern Mato Grosso, was about about 14% in 2006/2007. The return will l fall to 5% in the next harvest, if the exchange continues its current trend.
The damages are incalculable. “It all depend on the currency swings”, admits the analysts, confirming the same scene of losses if the prices at CBOT continue. This week, a new forecast from analysts threw cold water on the productive segment: in next the three months. The dollar will breach the barrier of R$ 1.80.
The loss then would be of approximately US$ 1 for each bag of soy produced in the State. Assuming equal production as last year of 15.5 MMT, the losses could reach reach the level of R$ 263 million in the next harvest.*


As you can see your "theory" that in view of the Real currency strength..... producers and exporters are receiving 1,3 Real for every 1 Real exported.....is DEAD DEAD DEAD....WRONG !!!! Reality being the exact opposite !
No doubt that Joao will still agree with you ! When 2 idiots are together and one says 2 2 equals 5, the second idiot will obviously say : of course it equals 5, every idiot knows that !
Hopefully you can follow and catch what I just said : every idiot knows that 2 2 equals 5 !!!!!


Red Faced...AES ??????
Anyway....ENJOY !

the plus sign did not print !
thus read 2 plus 2 equals 5.....based on your financial expertise in FOREX !

No doubt that Joao will still agree with you

No, this time agree with you!

Red faced, ch.c?

The loss then would be of approximately US$ 1 for each bag of soy produced in the State. Assuming equal production as last year of 15.5 MMT, the losses could reach reach the level of R$ 263 million in the next harvest.*

Actually, this problem is not restircted only to Soya produzers in the state of MT. It has affected the rice produzers in the South too. Though the cost of produzing per ton of rice has gone up by 25 % over the past two years, the whole sale price has come down by 50%. Lots of farmers have decided not to plant rice to drive the whole sale price up,but without much success. Of course, they do not export rice and it is not feasible to do so,because they can not compete with Vietnam,Thailand,Myanmar, India, etc; Though the whole sale prices have come down, the retail prices remain the same.

Because of the falling exchange rate, the biggest losers are small firms that manufacture window frames,doors and wooden furniture. Some had to close and others had to reduce the pay roll, causing heavy unemployment. Mind you, these companies are small, privately owned and not listed in BOVESPA.

The most interesting thing I noted was the difference between the time when Plano Real was introduced and NOW. When the Real was = to a Dollar, there was a fllod of imports of food items to bring down the prices of Brazilian produced ones (both perishable and non perishable). Now the dollar is going down and the retail prices of basic food items going up since March and I am yet to see imported items. One perfect exmple is Milk. In December, a carton of milk (1 Litre) used to cost around R$1.25. Today it costs around R$2.09. I see Uruguan milk being sold at R$1.69, though sporadically.

So my conclusion is that the ordinary Brazilian is not getting any benefit out of the current government´s economic policy. The middle class is getting poorer and poorer and completely at the mercy of the demagogues (?) (heart less ones, as GTY like to put it)

Small farmers never make money. That is why the U.S. has agricultural subsidies, because the cost of production is greater then the world market price.

Interest rates will come down, because the have to. Economics does only what it has to. The strong Real enabled Brazil to pay off its external debt.

Imports had been restricted to protect domestic businesses that cannot compete with Brazilian labor costs being higher than China, or Vietnam.

Protective teriffs are no longer necessary to these inefficient industries. They are being replaced by other commodities, oil, soy, beef, whose exports enable the economy to open to cheaper imports. There is no need for protectionism. Therefore it will cease. It is a balance difficult to control and maintain. The economy will change, the direction I dont know, but it will. You make what you can sell for a profit, and you fix what is preventing you from making a high profit you do it.

If is as your contention the high real is the cause celebre than you lower interest rates and increase imports. So that will happen. Brazil no longer needs an infusion of dollars based upon high interest rates. It no longer needs high interest rates to prevent inflation.

People are investing in the market because of the profit the company is making not because of the 12.5% interest rate.

I find things here extremely expensive. A $100 Toshiba TV in the U.S. is $250 here. That is just one example.

The lower the interest rate becomes the more loans to middle and small business for new trucks etc.

Because Brazil has proven by international banking norms to be able to control its economy, it is a secured risk. Interest rates WILL begin to come down, 7% should be sufficient within three years. There going to drop at least .50% to 12% this month.

I'll get back to you after I study the You Tube link, it looks interesting.

The U.S. destroyed the American plains, destroyed the Buffalo, growing single crops wheat, corn, the Buffalo is back and the eco system of the American plains are being restored. The depression and the dust bowl of the '30s taught lessons in errosion.

I would not choose to be a farmer in Brazil to make money, maybe beef or chicken. Farming is a rough road to hoe, in every society.

You engage in businesses that produce profit not loss. If you do not change to changing events you will fail.

It is manifestly obvious that there must be a finishing not only to BR163 but to every highway. A country cannot compete with Europe, or Canada or the U.S. with no system of transportation.

As to the f**king ecologists they really do not KNOW, they PRESUME knowledge, like the rainforest produced enormous quantities of methane contributing as a primal cause to global warming. There are18,000 prominent scientists opposed to the popular human influence in global warming.

Let them come up with an economic solution to support the people. Save the snakes, kill the people.

Little demagogues protecting there vested interest in barge transportation are historical anachronisms. They will not be allowed to continue to impede the national development of Brazil. There are too many other people making money to allow single individuals their particular fiefdoms.

There are more people that will benefit from infrastructure that have more money and influence then single individuals, grasping at the economic straws of their private enterprises.

The greater the economic prosperity, ie China, the greater the equanimity the emerges.

Brazil now has billions of dollars to implement change. The change produces more billions. It is getting the initial starting capital is cunundrum. Brazil has done that.

Brazil's Real Falls Second Day After Industrial Output Declines

By Ye Xie

June 5 (Bloomberg) -- The real fell after the government reported industrial output declined in April, bolstering speculation that the central bank will cut its key lending rate by a half percentage-point tomorrow.

The currency also declined as yields on benchmark U.S. Treasuries rose to nine-month highs, reducing the appeal of riskier real-denominated assets. Investors have been split in recent days on whether the central bank will cut the 12.5 percent benchmark rate a half point or quarter point at tomorrow's meeting.

``The industrial output came out lower than the market consensus, confirming that the central bank will cut interest rates by 50 basis points tomorrow,'' said Alexandre Lintz, a senior economist with BNP Paribas SA in Sao Paulo. A basis point equals 0.01 percentage point.

The real declined 1 percent to 1.9457 per dollar. The currency fell 1.2 percent yesterday, the most in three months, as a decline in Chinese stocks led investors to pare holdings of emerging-market assets. It's lost 2.5 percent since touching 1.8991 on June 1, the highest since October 2000.

Brazil's industrial output declined 0.1 percent in April, following an increase of 1.3 percent in March, the National Statistics Agency said today in Rio de Janeiro. The median forecast in a Bloomberg survey of 22 economists was for an increase of 0.9 percent.

Policy Meeting

A rise in U.S. Treasury bond yields also drove down the real by reducing the yield gap between Brazilian and U.S. securities. The two-year U.S. note's yield touched 5 percent for the first time since August after the Institute for Supply Management said U.S. service industries grew last month at the fastest pace in more than a year.

Brazil's central bank will reduce the benchmark lending rate by a half-percentage point to a record low of 12 percent tomorrow, according to the forecasts of 18 of 25 economists Bloomberg surveyed. Seven said the central bank will cut the rate to 12.25 percent.

Brazil has room to cuts interest rates faster to spur economic growth, former President Fernando Henrique Cardoso said today.

``I don't think the central bank should move by leaps and bounds, but that doesn't imply moving at a turtle's pace,'' Cardoso said in an interview.

Declines in Brazil's stock market also cut into demand for the real, said Matt Festa, a Latin America bond and currency analyst with 4Cast Inc., a research firm in New York.

The Bovespa Index of the most-traded stocks on the Sao Paulo exchange fell a second day, declining 0.2 percent.

George Soros

Billionaire investor George Soros said at a news conference in Sao Paulo today that Brazil's currency is overvalued and its interest rates are probably too high.

The real gained 10 percent this year, the third best performer among the 71 currencies Bloomberg tracks against the dollar. Only Colombia's peso, up 19 percent, and Iceland's krona, up 13 percent, have gained more.

``I don't think there's a lot of attention on Soros's comment,'' said Sandra Utsumi, chief economist with BES Investimentos in Sao Paulo. ``The real appreciated at a brisk pace on strong capital and portfolio inflows. You cannot fight against the market trend.''

The central bank bought dollars at 1.944 reais in an auction today. The bank has purchased the U.S. currency every day since July to curb the real's appreciation and support Brazil's exporters.

The yield on Brazil's benchmark zero-coupon bond due in January 2008 rose 3 basis points, or 0.03 percentage point, to 11.42 percent, according to Banco UBS Pactual SA.

To contact the reporters on this story: Ye Xie in New York at yxie6@bloomberg.net

Last Updated: June 5, 2007 16:40 EDT

Brazil Stocks Surpass $1 Trillion on Metals Rally (Update4)

By Paulo Winterstein

June 4 (Bloomberg) -- Brazil's stock market became the first in Latin America to top $1 trillion after surging metals prices helped double corporate profits.

The overall value of Brazilian equities rose to $1.02 trillion on June 1 after the Bovespa index rallied 2.2 percent. The gauge has climbed 45 percent in the past year and more than quadrupled since 2002, helped by a stronger currency.

Profits have risen 108 percent during the four-year rally, according to research company Economatica, buoyed by rising prices of nickel and iron-ore. Foreigners also have increased investment on speculation economic growth will accelerate. International investors accounted for 34 percent of shares traded this year, up from 22 percent in 2000, according to the Sao Paulo Stock Exchange.

``Brazil provides growth opportunities that investors went through in other markets,'' said Fabio Spinola, who helps manage 1.7 billion reais in assets at Quest Investimentos in Sao Paulo. ``Investors are buying that expectation.''

The real's 35 percent advance against the dollar since June 2002 has given a further boost to the country's dollar- denominated market value. The currency has jumped 19 percent the past year, the best performance among the 16 most-traded currencies.

The Bovespa fell 0.3 percent to 53,242.68 as of 4:17 p.m. New York time. The index is valued at 13.7 times profits over the last 12 months, about one-quarter its average since 2000. The Standard & Poor's 500 Index in the U.S. fetches 18 times its members' earnings.

Russia, India, China

Brazil is the fourth member of the so-called BRIC group of emerging markets -- Brazil, Russia, India and China -- to reach $1 trillion in overall market value. Russia surpassed it in 2006 and China and India followed this year.

Growing demand for nickel and iron-ore from China and an expanding domestic economy helped push up earnings at companies such as Cia. Vale do Rio Doce, Brazil's second-largest company by market value. Vale said May 3 first-quarter profit jumped 85 percent after it negotiated a 9.5 percent increase in iron-ore prices and nickel prices doubled from the year earlier period.

``We're seeing growth in a lot of blue-chip Brazilian companies,'' said Audrey Kaplan, who manages $2.3 billion in global stocks at Rochdale Investment Management in New York. ``They're able to sell their product well and make good profits.''

The market capitalization of Vale, the world's biggest iron- ore producer, jumped almost 50 percent since the beginning of the year, topping $100 billion in May after opening the year at $70 billion, according to Einar Rivero, economist at Economatica.

The purchase of Canadian nickel miner Inco Ltd. last year boosted Vale as nickel prices climbed 40 percent in five months.

Chinese Demand

``It's China that's responsible for all this,'' said Rodrigo Ferraz, steel and mining analyst at Brascan Corretora in Rio de Janeiro. ``China continues to grow enormously, and Brazil has a lot of reserves of materials it needs.''

Economic growth in China, the world's biggest consumer of nickel, accelerated to 11.1 percent in the first quarter from 10.4 percent in the previous three months.

Brazil's economy is expected to grow 4.2 percent this year, compared with 2.9 percent in 2006 and 2.3 percent in 2005, according to the median estimate of about 100 economists in a June 1 central bank survey.

Lula Administration

President Luiz Inacio Lula da Silva, who was elected in 2002 as the Workers' Party candidate, launched a program this year to accelerate growth. Brazil's annual inflation rate has dropped to 3 percent from 14.5 percent in January 2003, when Lula took office, helped by spending cuts and a stronger currency.

Other Brazilian mining companies such as MMX Mineracao & Metalicos SA and Cia. Siderurgica Nacional benefited from demand for Brazil's metal commodities. The share price of MMX, the mining company controlled by Brazilian billionaire Eike Batista, has more than doubled since the beginning of the year. The company was worth 8.5 billion reais as of May 28.

A planned public offering of shares in an iron-ore mine controlled by CSN, as Brazil's third-largest steelmaker is known, has helped push up the stock more than 50 percent this year. CSN said May 11 it hired Banco de Investimentos Credit Suisse SA to evaluate the sale of the Casa de Pedra mine, which may become the world's second-biggest iron-ore mine by 2010.

A flurry of initial offerings in Brazil this year has helped bump up the value of the market. Close to 11.5 billion reais ($5.7 billion) have been raised in 20 IPOs so far this year, according to Bloomberg data. That's more than two-thirds of the 15.8 billion reais raised in all of 2006 in a record 26 IPOs. An additional 4.6 billion reais have been raised this year in additional share sales.

Real Estate

Of the 20 offerings this year, nine have been real estate developers, driven in part by speculation that falling interest rates will boost Brazil's housing market. Brazil's central bank cut its benchmark lending rate for a 15th straight time in April to a record low of 12.5 percent from a high of 19.75 percent in September 2005.

``Whenever interest rates are lower and declining --and they are in Brazil -- that's a good signal for corporate profit,'' Rochdale's Kaplan said. Kaplan estimates that company earnings in Brazil will increase 23 percent in the next 12 months, the biggest gain among the peer group of 40 countries she monitors.

Eleven of the 16 economists surveyed by Bloomberg expect the bank to reduce its benchmark rate another 0.5 percentage point, double the size of its last cut, when it next meets June 6.

Falling interest rates also have lifted bank profits as demand for loans increase and lower rates cuts debt defaults. Brazil's three biggest publicly traded banks reported, on average, first-quarter profit gains of 28 percent on increased lending.

Extension of Credit

``The growth in wages, with inflation under control, makes viable the extension of credit,'' Spinola said. As banks lower monthly payments due to extended repayment periods they can make loans to a larger portion of the population, Spinola said.

State-controlled Banco do Brasil SA, Latin America's biggest bank by assets, gained 27 percent this year. The bank's shares gained 2.7 percent May 15 when it announced a 50 percent jump in first-quarter income from continuing operations to 1.41 billion reais.

Banco Itau Holding Financeira SA, Brazil's biggest non-state bank, said May 8 that first-quarter profit rose 30 percent, sending shares 3.5 percent higher in two days.

http://www.bloomberg.com/apps/...3ZBVSVB4pU

If you export $R1.95 today, you receive one dollar. Three years ago you had to sell, export $R3.00 to receive the same dollar.

If the farmer is losing money it is because the cost of production is greater than the cost he is selling it for.

The question/solution is why is the cost of production so high, when in fact inflation continues to fall.

The answer, because the cost of borrowing money, interest rate, is to high. The high interest rate is not beneficial to brazilians, but instead to the foreigners pouring dollars into Brazil's economy. As I stated before Brazil's Central Bank needs to cut the interest rate more aggressively thus stemming the flood of dollars into the country. This would weaken the Real for which a good trading range is between R$2.25 - R$2.50 = $1.00.
High interest rate is a good tool for keeping inflation in check, but it also stifles economic growth when it is too high. The Central Bank needs to find the balance.
It is unfortunate, but small business, the back bone of all economies are usually the first to get hurt because they do not have the economies of scale of a large business.

Brazil's central bank will reduce the benchmark lending rate by a half-percentage point to a record low of 12 percent tomorrow, according to the forecasts of 18 of 25 economists Bloomberg surveyed. Seven said the central bank will cut the rate to 12.25 percent.

Brazil has room to cuts interest rates faster to spur economic growth, former President Fernando Henrique Cardoso said today.

``I don't think the central bank should move by leaps and bounds, but that doesn't imply moving at a turtle's pace,'' Cardoso said in an interview.

If the farmer is losing money it is because the cost of production is greater than the cost he is selling it for. The question/solution is why is the cost of production so high, when in fact inflation continues to fall.

Supplementing the explanation of The Guest: While the dollar has been coming down for the past 2 years, the cost of fertilizers,seeds,pesticides and fuel have gone UP,disproportionately with respect to the "Official " inflation rate. The labor cost also has gone up considerably. Of course I agree that in small family farms, the labor cost does not matter. On the other hand, the whole sale prices of vegetables,rice and other commodities have gown DOWN. Add to these factors the high Interest rate the Guest mentioned and ch.c constantly points out and you will get the picture.Of course we live in a state where mini farms and small businesses are the back bone of the economy were exporters too. If one talks to the farmers and small businessmen who were not looking for government hand outs and making their own living (and providing jobs),the picture is bleak.

Again I would like to ask this question: If the dollar is weak, why is the government not reduzing the import duties (or eliminating) to stimulate the entry of cheaper essential goods (such as seeds,fertilizers,milk,frozen vegetables,etc. This happened when the new currency Real was introduced and was in par with U$.

As for foreigners pouring dollars into Brazil to invest in Brazil,it is certainly not beneficial to the Brazilians as I think that they are investing in BOVESPA and not in modernizing the Industrial parks. It may end up that the investors in BOVESPA will make 50% return on their investment in 12 months and the Real will depreciate 100% (by Government decree)! Remember what Bo mentioned about BOVESPA ?

btw, there is nothing that gives good return for small savings account. We have something called "Caderneta de Poupança " which is traditional in Brazil for the people who used to put their monthly savings in that account. That famous and traditional account gives a laughable return (less than the inflation rate).There again, the banks give a small return to the investors and in turn invest in the Finance Market for a high return and do not forget that they charge quite a bit of fee to maintain your account!.

I forgot to add at the end of my previous post: "No wonder that with such high interest rates, so many Foreign banks want to come to Brazil"

Did the prof die?

Did the prof die?

I am sure he did not. A coicidence that I have been thinking what happened to him. It is quite possible that he is busy a) By occupying the Rector´s office at USP and leading all the students there to the greater glories of the Republic b) Travelling to Lisbon to pursue the research project his wife got him intrested.

Sure we miss his humor and hopefully he will come back to the blog just to assure us that he is alive and kicking.

Don't worry Gilligan, I am sure your hero is still alive and kicking, perhaps his Brazilian wife made him spend less time on his computer and more time with her...they get that way sometimes and it is a very good thing indeed.

perhaps his Brazilian wife made him spend less time on his computer and more time with her...they get that way sometimes and it is a very good thing indeed.

This time you are more astute (for a change)

All set to visit Brazil?

Can't wait! 6 of us are going, flying Miami to Manaus. From there we take a 8 hour trip up the Rio Negro to the very rustic fishing lodge. The loge is pretty basic, but has a air conditioning, bar and a pool. There is 1/2 day of fishing every day with a guide, food is included...all for R$300.00 a day! We are staying 7 days I have a Brazilian friend who has made the trip many times and raves about the fishing and service. We have planned this trip for several years, fishing Panama, Costa Rica, Mexico and Belize in the meantime, but this one should be something special. Might even met an Amazon girl or two.

Very cool. Have a safe trip. What a gas.

Might even met an Amazon girl or two.

I hope your wife does not get to read your blogs. She may decide to put a chastity belt on ya!

Years ago, we did this trip and at that time it was still not fully explored by foreign tourists.Manaus used to be a beautiful city and the boat trip on the rivers was one of the most beautiful experiences I have had in my life. If you like wild adventures, I bet you are going to love your trip.

Gary, remember the "Amazon is ours" .What the heck, it is yours too, since you have Brazilian family.

You have a safe and pleasant trip and keep in touch.

To:AES/Thanks for the edification
written by João da Silva, 2007-06-06 17:04:40

Did the prof die?



I am sure he did not. A coicidence that I have been thinking what happened to him. It is quite possible that he is busy a) By occupying the Rector´s office at USP and leading all the students there to the greater glories of the Republic b) Travelling to Lisbon to pursue the research project his wife got him intrested.

Sure we miss his humor and hopefully he will come back to the blog just to assure us that he is alive and kicking.

You about got it right Sir João! I finally gave in to the wife, we are in process of finalizing the bookings for a 12 day trip to Portugal in August. We like to book our trips without an agent, so we are ass-holes and elbows into planning, research etc.
We have spent about week already trying to Finalize the booking for the Flight on
TAP airlines, they are real PORTUGUESE, so communication is a one way street.

We have so far about 10 plus cities on the itinerary to visit, with a stay in 4 of them;
Porto, Guimarães, Coimbra, Lisbon and of course the Universities for Research and a mandatory stop in Fatima.
My wife (boss) asked me what is the thing you are most interested in about this trip and I said: seeing Lisbians, of course being a woman she thought I meant Lesbians!
Then I had to explain to her that the people in Lisboa are called Lisbians, she said no they are not! Well anyway that's my story and I am going to stick to it!

I see Private parts is heading for Manaus, which I pronounce (Man-noose). Have a good time private! I spent 2 weeks there, and 8 days on the river (in the Summer).
Watch out for them jacarés, once they see you guys they might drag your arses out of the boat thinking you are one big Burrito six-pack!

So what happened to Adm. Forrest?

Great to hear from ya and am glad that I got it almost correct. So you all heading to Lisbon.Must be interesting. Pvt. Crunch was the one who categorically assuerd us that you must be well,but under the command of your wife. So he got it 100% correct and was astute. AES must be happy to receive some news from you and now he can stop writing obituary for ya.As usual, he is in the threads re the Brazilian economy telling everyone to be optimistic. Now it is party time and will be in touch during the week end.

No news from Adm.Forest. May be Gary will meet him on the Amazon River.

Take care and have a great week end fine tuning your plans to visit Portugal. My wife says that TAP is a great Airlines to fly and I believe the food and the wine are very good.A wise choice on the part of your wife and you.

Lisbians Professor?...perhaps we should call you Pvt Munch...I have been worried about Forest too, I hope he did not met up with any evil. But then again, he just might be up the Amazon, or Uganda or the Sudan or God only knows where, I have to admit, I do miss his rants, although I am convinced he has a bunch of lose screws...and not on the Sunkdeep.

Oh well, running the boat over to the island tonight, smooth seas and no wind, should be a breeze, wake up to my wifes (yes, I am taking my wife and kids this time) Bloody Marys and then my favorite Grouper hole for some big ones. Have a good weekend all.

AES must be happy to receive some news from you and now he can stop writing obituary for ya.As usual, he is in the threads re the Brazilian economy telling everyone to be optimistic. Now it is party time and will be in touch during the week end.

I think AES is smoking Happy Grass! But I do like his optimism, since I have a financial stake in the Brazilian Economy I hope he is right! if he is, I will start smoking what he is!

My wife says that TAP is a great Airlines to fly and I believe the food and the wine are very good.

I hope she is right! Don't they call Tap Airlines "Tamancos Aéreos Portugueses" ?

Lisbians Professor?...perhaps we should call you Pvt Munch...

My wife won't let me munch carpet or carpet munchers! She is Catholic

have been worried about Forest too, I hope he did not met up with any evil. But then again, he just might be up the Amazon, or Uganda or the Sudan or God only knows where, I have to admit, I do miss his rants, although I am convinced he has a bunch of lose screws...and not on the Sunkdeep.

Maybe he is getting his screws tightened in the Virgin Islands?

Bloody Marys and then my favorite Grouper hole for some big ones.

This must be sexy Florida talk?? I once knew a bloody girl named Mary with a grouper hole for some big ones! She only charged 2 pounds sterling per person..

I once knew a bloody girl named Mary with a grouper hole for some big ones! She only charged 2 pounds sterling per person..

You cheapstake, just paid 2 pound sterlings to the young lass. You capitalistic pig and inhuman being

So the tele that rainy day in parati while we had naught to do but play cards on the bed at the pousada showed some pretty amazing championship fishing going on somewhere in Paraiba I think. I decided what the hey, and took both feet off the ground and expressed the idea that maybe I could take my favorite munch there next year. You gents have any leads / locals in that region to suggest? If I could find the contacts I might even try to get her an entry. She's very very good and I love nothing more than watching her with a big one on the line.

Check out this link, already into my second Bloody Mary looking down at my boat from the veranda, going to be on hell of a day in Bimini!

http://www.tucunaadventure.com.br/

TOrof
written by João da Silva, 2007-06-09 00:07:28

I once knew a bloody girl named Mary with a grouper hole for some big ones! She only charged 2 pounds sterling per person..

You cheapstake, just paid 2 pound sterlings to the young lass. You capitalistic pig and inhuman being

Looks like now I am getting the F*cking I got for the F*cking I gave! This trip to Portugal is like being F*cked! For every 1-Euro - I spend - I am paying 2.60 plus Reais.
I bet good old CH,c is happier than a turd in a beef stew to know that I am almost paying 3 times as much for 1 vacation. Laugh....Laugh....Laugh
I would like to wring his thin European neck!
That reminds me I need to buy some black socks to wear with my sandals!

I would like to wring his thin European neck!
That reminds me I need to buy some black socks to wear with my sandals!

No need to wring his neck yourself. Remember, GTY´s sailors are waiting for him at MIA.

As for your black socks, why dont you give a call to our friend Henry Sobel. He might have some high quality ones he brought from Palm Beach which he visited again in April to appear before the court .I heard that he was sentenced to do 100 hours of Community service in Brazil and he may be ready to donate some Socks for you as part of his sentence.

I hope you have already started buying Euros to take advantage of the strong Real now.

my self and some of the other meat eaters spent the last few weeks in the jungles south of panama just to recope our past.

and set into play civil action on those whom did civil actions to me , and i dont need a court or a judge

have a good one

some people bring joy by comming others by going

By now , you discovered that your friends in this blog do miss ya.You are one of those people who bring joy as GTY, Prof and others were wondering about your long silence.Great to hear from ya.

How is Panama, Admiral? you are on the Atlantic side or the Pacific? I would love to track your coordinates on the Google Earth.

You take care and be in touch.

Hay Joe

we took a hike through the jungle and from coast to coast east to west .

had a boat take us to about 150 kl south of the zone and we just set out across the ismass of panama .
took only what we could carry on our backs ,did not see another person the whole trip

rebuilt old freindsships and said by to all thoes whom are no longer with us.
as of right now my wife and i are on a boat doing the grate circle going to show her lake champlane and them run down the mississippi ,

then we will see what we are going to do and where we want to live and go next.


best advice for travlers is if your lover is not made of rubber

live your life vicariously through me

Thanks buddy. It is nice to go to far off and unknown places,get to know people of different cultures, enjoy the wilderness and excange stories about your travellogues (?) with others.

It appears that GTY is going to the inhospitable jungles of Amazon and I bet he is going to enjoy it. The same thing with the Prof. He is planning to go to Portugual. I think that all these travels enrich ourselves in diversified ways.

Have a great time, while I am sipping some cold Skol and planning my next adventure.

Interesting trip Forest...I was at Ft Clayton back in the day, part of Just Cause when we took down Norriega at the Vatican...they just released the puke, getting old fast. I have been meaning to get back one day for a tuna trip, to many other choices, but you put Panama back in my mind...crazy days down there.

Joao, your right, those two Brazilian missionaries just pled out for a fine and community service. Brazil as been pretty good about extradition lately and Bush and Lula continue their love fest...they should be back in Brazil shortly, but they have plenty of bribe $$$, so don't expect much. You should see their Miami digs...Star Island, very nice. All at the expense of your poor and middle class. Gives us Christians a bad name, but the nuts from the 70's and 80's here are either in jail or dead.

"as of right now my wife and i are on a boat doing the grate circle going to show her lake champlane and them run down the mississippi , "

Great idea, the Coyotes are having a tougher time everyday, bringing in your illegal wife by sea is brillent, sounds like the time in the jungle cleared your head. But I hope you have been reading the news...the Immigration Reform Act failed, no amnesty for all illegals, but you should have an easier time if you can get your wife in. The American people just don't have the stomach for making up to 20 million illegals...legal just yet, kind of like gays in the military. I have mixed feelings over the whole thing, know that something needs to be done but the bill was poorly written. Lot's of pissed off Brazilians down here, thought they had the amnesty deal in the bag.

Across the country with a pack...good work, I now prefer to do it all a little more civilized, like to wake up on the boat and mix a batch of Bloody Mary's or Screwdrivers, make a couple of omeletes, flip on the Loran and find a bottom at 200 feet that holds a bunch of fish. Made it back from Bimini in the Contender in less than 2 hours...probably passed a few thousand Cubans and Hatians in rubber rafts on the way.

Made it back from Bimini in the Contender in less than 2 hours...probably passed a few thousand Cubans and Hatians in rubber rafts on the way.

Probably your wife was in command of Contender to make it back in less than two hours.....It was good that she was,because with all the Bloody Marys and Screwdrivers in your system, you have rammed and sunk dozens of those rubber rafts!

She drives like a female Carioca! To many rocks and reefs to hit in the boat, she prefers to sit on the bow topless and enjoy the ride back...if anything, the folks on the rubber rafts sunk themselves trying to stand up for a look at her. Also, I take a long break from the boat drinks before heading back when I have the family, have to be responsible every once in awhile.

Off to sell more ingredients to big Phamra...I am such a whore! See ya.

if anything, the folks on the rubber rafts sunk themselves trying to stand up for a look at her

See, how cruel you are towards our beloved Brazilian ladies? You sink the rafts and put the blame on your lovely Carioca wife. The entire world puts the blame on the Brazilians and I think it is unfair and your wife and Mom-in-Law would be the first ones to agree with me! Behave yourself and treat our ladies well!!

Did ya get to sell high value items to your big Pharma customer today?

Trust me J...she is treated very well indeed.

I dont think the Swissie realized what hit him. A great job ya did