Brazzil

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The above article said: “…In March of 2007, United States President George W. Bush and Brazilian President Luiz Inácio Lula da Silva signed a Memorandum of Understanding that cemented a new alliance geared towards converting the U.S. into an ethanol-dominant auto fuel industry. In return, Brazil will be introduced into the global market.

…In addition to the changes made domestically, the U.S. government finally agreed to Brazil's requests to eliminate the 54 cents per gallon tariff placed on the energy source. The tariff was originally imposed by the U.S. to protect its workers from the downside of international competition and to maintain the prospect of eventually becoming an entirely independent energy producer; thus limits were put on the amount of ethanol that could be shipped to U.S. ports.

Despite Congress' vote to prolong its tariff on Brazilian ethanol imports until 2009, the country was granted its request that its ethanol be shipped directly from Brazilian to U.S. ports instead of via the Caribbean Islands, as has been required by the Caribbean Basin Initiative (CBI) Agreement of 1983.”

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In my opinion, Ethanol is a good solution for Brazil regarding its energy needs, but it is not a good idea to export this solution to other countries around the world, since we will need all the available land to grow food not only for Brazil, but also to other countries around the world.

Only people who are brain dead would think that ethanol made from sugar cane or corn is an intelligent way of using these food resources.

I wonder why Lula is even talking with Bush and the US about exporting ethanol for the US market – Americans have made a long term commitment to be dependent on oil as a source of energy – in the last 5 years the United States has invested over $ 1 trillion dollars in Iraq on their pursue for new sources of oil.

The United States should keep the 54 cents per gallon tariff on ethanol from Brazil, or maybe even increase the tariff to $ 1.00 – ethanol made from corn and sugar cane are not viable solutions for the US energy needs.

Brazil should not export ethanol, and Brazil should use ethanol only for its domestic needs.

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Ethanol - is an energy solution only for Brazil.

Hi Ricardo,

I really did not want to comment on this article,but after reading your comments, could not help saying a few words.

I understand your point of view and am aware that you mean well for the country of your birth. However, since you have been away for a long time, I think you are unable to grasp the current reality. No Brazilian who has accompanied the evolution of Ethanol as an alternative fuel could ever deny that the program was conceived by the Military as of strategic importance.ie after going through the two crises in 70´s and early 80´s to pad us against further unpleasant surprises. Remember that at that time Brazil was not self sufficient in oil and we had to find alternative source of energy to power the transport vehicles.

Though I could go on writing for ever, I just want to remind you that under Lula, the Ethanol issue became a political one and a great platform to project the image of the government and Brasil (though Brasil has got other nice things to sell including the food stuff). I remember that in the 80´s the production of Ethanol was being subsidized by the government and it made many "Coroneis" in the Northeast millionaires. I have a feeling that by exporting Ethanol to U.S., a few are going to become Billionaires. That is all that counts.

My prediction is that once we start exporting, the Ethanol price at the pumps will go up just like the food prices go up for the Brazilian consumers , every time we talk about exporting frozen chicken, milk, etc; to the Middle East.

I hate to sound pessimistic.Though people like us talk sense, we are a minority and I am afraid we will remain so for a long time to come. It is time for the majority to recognize that we are leaderless and rudderless and take corrective measures to set course.

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Hi Joao,

It is easy to connect the dots between this article and my 4 part article published on this magazine on October 2007 about China investing $ 200 billion US dollars in Brazil.

In a nutshell: the world is moving very fast on a direction of future food shortages (there are many reasons for that, and I mentioned some of the reasons on that article), and it would be criminal for a country such as Brazil that could help alleviate this growing food shortage and help to feed millions of mouths around the world, and instead Brazil uses its valuable agricultural resources to feed car engines of people who doesn’t have even common sense since they are driving big guzzling SUV’s.

I know that Lula thinks that Brazil can be the new Saudi Arabia and feed the US energy market with ethanol made of sugar cane, but that concept it is a complete nonsense.

Besides the US economy is on the blink of a complete economic meltdown, and right now the US government is in complete PANIC mode and they are trying to put a bunch of band-aids to fix an US economy that is in critical condition.

If you want to learn about what is happening to the US economy and US government bailouts then go to the following website: Elite Trader the number 1 Wall Street community for active traders on the net -and these professionals discuss Stocks, Futures, Options, Currencies, Derivatives, the Real Estate market, and the US economy in general.

There are 100,000 members participating on these financial forums including traders (from US and from around the world), economic professors, students, people interested on the stock market, and actual traders who put their money on the line on a daily basis.

My screen name on that forum is:SouthAmerica

And here are some threads that you might find interesting reading regarding what is happening to the US economy, the US dollar, the foreclosures and Bushvilles, the US government bailouts, and so on….


1) The US dollar and the biggest default in history.

http://www.elitetrader.com/vb/...did=121313

There are 6 replies and 685 views on the above thread.


2) Over 75 years ago Wall Street Crashed; but today the New Crash is already underway...

http://www.elitetrader.com/vb/...did=117003

There are 94 replies and 7,942 views on the above thread.


3) Central Banks and the US Dollar.

http://www.elitetrader.com/vb/...enumber=47

There are 278 replies and 27,754 views on the above thread.


In my opinion, ethanol made from sugar cane is a solution for Brazil regarding its energy needs, but it is not a solution that can be exported around the world, and the Brazilian government should discourage the export of ethanol from Brazil by placing a tax on ethanol exports that goes up accordingly with the price of oil in world markets.

Brazil should use its growing agricultural power to grow food instead, and Brazil can make agriculture in Brazil a more profitable business by moving up on the food chain –
Instead of selling the raw materials Brazil can start manufacturing the foods that people want around the world. (Manufactured products usually it has a higher profit margin than raw materials – with few exceptions; oil comes to mind.)

I hope you understand what I am trying to say. Brazil should prepare itself to help feed the growing middle classes in China, India, and the oil producing countries of the Middle East, since that is where demand for food is going to be in the future years.

It makes me sick that we don’t have people in the Brazilian government with vision of the future and they don’t have the foresight to see what is ahead of us in the coming years.

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WE CAN ARGUE THE POINT TO DEATH THAT GLOBALLY WE HAVE REACHED PEAK OIL AND IT IS EVIDENT THAT THE EASY OIL ELEPHANTS ARE DEPLETING ON LAND..EVEN SAUDI ARABIA IS ACCUSES OF FUDGING ITS OIL RESERVE NUMBERS, HOWEVER, THE USA ESPECIALLY WILL REMAIN ADDICTED TO OIL AS LONG AS THERE STILL EXISTS POSSIBILITIES OF EXPLOITING THIS RESOURCE. THEY WILL PURSUE OIL FIRST BEFORE CONSIDERING ETHANOL IMPORTS. COUNTRIES WITH DEEP SEA OIL RESERVES SUCH AS BRAZIL AND THE CASPIAN SEA COUNTRIES, CANADA'S OIL SANDS, WESTERN AFRICA, AND THEIR OWN OIL SHALE RESERVES WILL BE HEAVILY TARGETED. IT ALSO HAS MASSIVE COAL RESERVES AND WHY NOT COAL LIQUIDIFACTION AND KEEP VOTERS IS PENNSYLVANIA HAPPY. THE GREAT CLAIM GAME IN THE MELTING ARCTIC WATERS ARE BEING PLAYED OUT WITH EVEN TINY DENMARK FIGHTING FOR IT'S CLAIM FOR WHAT GEOLOGISTS ESTIMATE TO CONTAIN UPWARDS OF 25% OF THE WORLD'S OIL RESERVES.

I DON'T THINK LULA SHOULD PUT ALL HIS EGGS IN ONE BASKET, THIS BEING ETHANOL, BECAUSE IN THE SHORT TERM, AND THIS COULD BE DECADES, THE USA WILL NOT EMBRACE ETHANOL IN THE NUMBERS LULA ET AL ARE PIPE-DREAMING ABOUT.

Instead of selling the raw materials Brazil can start manufacturing the foods that people want around the world. (Manufactured products usually it has a higher profit margin than raw materials – with few exceptions; oil comes to mind.)

Ricardo, this is what we have been saying for years. The Swiss "pentelho" calls this strategy "Value Added Product" all the time (and parrot like).

I hope you understand what I am trying to say. Brazil should prepare itself to help feed the growing middle classes in China, India, and the oil producing countries of the Middle East, since that is where demand for food is going to be in the future years.

I perfectly understand what you say.

It makes me sick that we don’t have people in the Brazilian government with vision of the future and they don’t have the foresight to see what is ahead of us in the coming years.

After Roberto Campos, no economist in the government has had the vision of the future. I don't think that any of them has read that famous article published in HBR under the title "Marketing Myopia" years ago.I wonder if Unger has read it!!

btw, there is an interesting article titled "The US Market Crisis and the Perils to Brazil and LatAm" in this magazine. It directly relates to what we have been discussing about the perils of Brazil selling just the raw materials and forgetting about the "Value Added Products".

Thanks for the links you recommended and I have gone through them.

You have been learning bad things from Ch.c, Jon. You don't have to yell and scream at us to make your points, by typing in upper case letters. Mind stopping to do it?

I DON'T THINK LULA SHOULD PUT ALL HIS EGGS IN ONE BASKET, THIS BEING ETHANOL, BECAUSE IN THE SHORT TERM, AND THIS COULD BE DECADES, THE USA WILL NOT EMBRACE ETHANOL IN THE NUMBERS LULA ET AL ARE PIPE-DREAMING ABOUT.

A point well taken by me and let me assure you that I am not yet deaf, though your intended target audience is

Please read the following and you would love it!:

http://www.estadao.com.br/esta...2579,0.php

Could not believe my eyes!!!

SORRY joao,

Ch.C. had hacked my computer and deleted my small case capabilities

Ch.C. had hacked my computer and deleted my small case capabilities

A kind of joke, Jon? Ch.c is incapable of hacking into anything. He hacks and hacks and no chips are flying

You must be a filanderer (Finlander) to be outwitted by a Swiss

Regardless, you have a great week end

Joao,

You enjoy the beach Joao

I think you are due for an enema!

Costa

Costa Rica,

You must be bored!

hay dis gudda wat is yall talkn bout cuz yall jus a pos(piece of s**t)