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Lula Machine Couldn't Make Rousseff a President Without a Runoff PDF Print E-mail
2010 - October 2010
Written by Nicky Pear   
Thursday, 07 October 2010 23:42

Dilma RousseffSunday's election result in Brazil did not transpire in the way that polls had predicted. Until a week ago, it was widely assumed that Dilma Rousseff of the Worker's Party (PT) was a shoo-in for victory in the first round of voting, following the endorsement of the widely popular incumbent President Luiz Inácio Lula da Silva.

However, as results emerged it became clear that Rousseff had failed to reach the 50% of votes needed to take the presidency without a runoff. In the end, Rousseff won 47.6% of the vote, while José Serra, a veteran of the Social Democrat Party (PSDB) took second place with 32.6%, reflecting a setback for the Lula machine.

The primary reason for Rousseff's partial decline in popularity in the run-up to the election seems to be continued fallout from corruption scandals in the PT that shook her campaign. In mid-September, allegations were published in Veja magazine that Israel Guerra, the son of Lula's chief of staff Erenice Guerra, had solicited money from companies to arrange government contracts and loans.

Guerra ended up resigning as a result of the accusations. In spite of this, polls consistently put Rousseff over the 50% mark, suggesting that additional factors may have dented her campaign as well.

Rousseff's failure to break 50% itself was a surprise, but perhaps more surprising was the performance of the 3rd place candidate, Marina Silva of the Green Party, who far exceeded expectations by winning 19% of the vote. The voters Rousseff lost in the days before the election seemed to switch allegiances to Silva rather than Serra.

There has been some speculation that part of the reason for this was Rousseff's seemingly ambiguous stance on abortion. Silva, on the other hand, is an evangelical Christian, who is vocally opposed to any steps towards liberalization.

Clifford Young, of the polling group Ipsos, highlights another possible reason for Silva's unexpected success. Young suggests that under Lula, the Brazilian class structure has shifted, with approximately 30 million Brazilians entering a growing middle class. Young argues that "Silva's success in the first round is, in part, a result of this shift in voter demands.

Specifically, her 'sustainability' and 'quality of life' messages especially resonated with this emergent class." Rather than appealing to voters through the paradigm of employment, as Rousseff and Serra have consistently done, Silva appealed to the new desires of Brazil's growing middle class such as education, crime and the environment.

This illustrates the paradox that redistributionist movements often face, as the greater social equality they bring about leads to rising expectations, with voters often becoming detached from the populist message they originally favored.

Interestingly, the fact that Rousseff failed to win in the first round, highlights the limits of Lula's influence, and reinforces the fact that his popularity was centered on him personally rather than on the Worker's Party.

Still Rousseff's to Lose

Brazilians will go to the polls again on October 31st, to decide conclusively between Rousseff and Serra. It remains highly likely that Rousseff will emerge victorious, given that she requires only a 3% increase in votes from the first round. Lula won the elections in 2002 and 2006 in second rounds without getting near the 47% in the first round that Rousseff gained in this year's election.

Indeed, despite the setback of having to campaign for a further month, Rousseff still has a strong and appealing message, posing as the continuation candidate in comparison to Serra, who symbolizes a pre-Lula Brazil.

It has been suggested that given her success in the first round of voting, Marina Silva has the potential to be 'king-maker' in the coming weeks of campaigning. While Silva's support would undoubtedly give a boost to either candidate, her personal endorsement is unlikely to be the deciding factor.

It is by no means a given that Silva's supporters, whose voting preferences are informed by a wide variety of issues, will blindly follow her opinion. Indeed, for Serra to win the election, he will have to convince a number of Brazilians who voted for Rousseff in the first round to vote for him in the second; certainly no simple endeavor.

The race to become the next President of Brazil therefore remains Rousseff's to lose. It seems that, barring a significant derailing of her campaign, come October 31st she will become the first female president of Brazil.

However, pollsters and political analysts alike should heed the warning of former Prime Minister Harold Macmillan who, when asked what is most likely to send political campaigns off course, famously replied "events dear boy, events."

Macmillan's view can definitely be applied to the first round of voting, in which specific incidents caused Rousseff's campaign to stumble with the finish line in sight. For Serra to make up the ground required to win the second round, however, truly crippling events would have to unfold around her campaign. This is of course always a possibility, but at this moment in time, remains unlikely.

Whoever wins the second round will inherit a country on an upward trajectory. Brazil is globally respected and is in a position to negotiate a greater role both regionally and on the world stage than ever before.

However, the outgoing president will not be easy to replace. Universally accepted as Brazil's most popular leader of recent decades, the success of Lula makes him a hard act to follow.

Nicky Pear is a research associate at the Council on Hemispheric Affairs (COHA) - www.coha.org. The organization is a think tank established in 1975 to discuss and promote inter-American relationship. Email: coha@coha.org.



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Comments (70)Add Comment
To Nicky Pear
written by wiseman, October 07, 2010
Good analysis Nicky.
...
written by João da Silva, October 08, 2010

Good analysis Nicky.


Now we await the analysis of Dr.Nicholas Koznoff. I wonder if he made it to Brasil on October 3rd to participate in the vicory clebrations of Ms.Rousseff.smilies/wink.gif
To
written by wiseman, October 08, 2010
Dr. Nick probably ended up in Buenos Aires thinking it is the Capital of Brasil smilies/cheesy.gifsmilies/grin.gif

BTW, whats with the amputation issues (saw it on another thread). I sincerely hope you are OK.
wiseman
written by João da Silva, October 08, 2010

BTW, whats with the amputation issues (saw it on another thread). I sincerely hope you are OK


Not all that drastic, just wanted to cheer up our on-line buddy Ederson. The right leg pains while walking on uneven surfaces. No problem while driving or sitting. Thanks for asking, though.

Dr. Nick probably ended up in Buenos Aires thinking it is the Capital of Brasil


This is the problem with off-shore political "pundits". I have been trying to read the opinion of "respectable" newspapers like "Economist", "Le Monde", "El Pais", etc; Too busy. BUT...BUT...BUT.. the following statements of the writer of the article are interesting to analyze:

However, pollsters and political analysts alike should heed the warning of former Prime Minister Harold Macmillan who, when asked what is most likely to send political campaigns off course, famously replied "events dear boy, events."


Harry McMillan was also a Wisman.smilies/wink.gif

However, the outgoing president will not be easy to replace. Universally accepted as Brazil's most popular leader of recent decades, the success of Lula makes him a hard act to follow.


Probably Nicky Pear has not heard of Mr.Lula´s equally famous comment. "We Brasilians do not have heroes, but...but...but.. only martyrs".

...
written by Nicholas (usa_male), October 08, 2010
I'm sure Brazil will be fine, who lives in the US (like me)..check this out. http://inflation.us/videos.html
I'm sure Brazil will be fine, who lives in the US (like me)..check this out.
written by Bernanke Is a Curse Upon Humanity, October 08, 2010
Interesting videos, but......

- right now, insider (smart money) equity selling/purchasing ratio is 2400/1....selling into strength. (this tells us that the program traders are mounting a concerted effort to sucker retail investors back into equity markets)

- these are the things you read and see at critical market tops.

- the strength of the Real is the result of carry trades...Brazil will probably end in disaster (and I hope I'm wrong, but I don't think so).
asp
written by ..,, October 08, 2010
ok, somebody has too much time on their hands...

wow, you looked all over the threads to put together my words...

brilliant....i mean you actualy get that i am a witty son of a bitch...

why dont you just write a screen play and make some money ?

f**k, you are doing me a favor, to inspire me to get the f**k out of here...all im doing now is coming in to tell people your posts arnt mine...



Well, you are not exactly renowned for robust or substantive essays...but...but...but...do stop by the plantation on occasion for tea and crumpets and encourage Komrad ch.c to do the same. smilies/wink.gifsmilies/cheesy.gif


Herr Doktor Cartesian
written by wiseman, October 09, 2010
A 1000 pardons Herr Doktor, I am just so curious to know how the 22% foreign born residents of Helvetia live & contribute to the rampant homosexuality of Swiss society & if most of them are highly educated & with special skills.

Kindly enlighten me on this subject. I am just so curious......smilies/wink.gif
...
written by Triple-Dot, October 09, 2010

.but...but...but...do stop by the plantation on occasion for tea and crumpets and encourage Komrad ch.c to do the same.


AND to actively participate in the Plantation Politics.smilies/cool.gif
asp
written by João da Silva, October 09, 2010

Well, you are not exactly renowned for robust or substantive essays...but...but...but...do stop by the plantation on occasion for tea and crumpets and encourage Komrad ch.c to do the same.


That must be our ruthless and unscrupulous friend Dr.Cata operating under a new alias and asking you to crawl out of your cabana and express your thoughts in your colorful language, ASP. I suggest you oblige him (and the rest of us) ASAP.smilies/wink.gifsmilies/cheesy.gifsmilies/grin.gif
...
written by Nicholas (usa_male), October 10, 2010
- the strength of the Real is the result of carry trades...Brazil will probably end in disaster (and I hope I'm wrong, but I don't think so).

True, similar like in many countries, but you'll be fine when you tax them, what Brazil is doing, so I think you will be wrong at the end. The US dollar is being trashed.
...
written by Nicholas (usa_male), October 10, 2010
this tells us that the program traders are mounting a concerted effort to sucker retail investors back into equity markets)

Yup, program traders like Jim Cramer are mounting a concerted effort to sucker retail investors back into "US" equity markets, that will end those investors into the poor house.

buy gold, silver or foreign equity markets.
The US dollar is being trashed....and....a concerted effort to sucker retail investors back into "US" equity markets, that will end those investors into the poor house.
written by Bernanke Is a Curse Upon Humanity, October 10, 2010
The decoupling theory has proven to be a canard as well as commodities retaining strength while equities spiral downward.....that was very well demonstrated during the initial leg down in 08-09.

The dollar, I believe will ultimately be the safe haven. Bernanke will not be able to print enough dollars quick enough when credit deteriorates in a rather violent fashion. I have absolutely no faith in what the Fed is doing and emerging markets will bare the brunt of a deflationary depression.
Regarding Brazil's President Election of 2010
written by Ricardo C. Amaral, October 10, 2010

Ciro Gomes is an excellent choice for coordinating the final stretch of Dilma Rousseff's presidential campaign. Mr. Gomes has been a mayor, and a governor of the state of Ceará. He has been a Deputado Federal, and he served briefly as Brazil's Finance Minister in 1994. Basically, he has all the credentials necessary to become the president of Brazil himself.

http://en.wikipedia.org/wiki/Ciro_Gomes


The state of Minas Gerais will play an important role in the decision of which candidate will become the next president of Brazil. Former Minas Gerais governor Aécio Neves will support the presidential campaign of Jose Serra. But another powerful political force in the state of Minas Gerais the Andrada Family – they are splitting their family support right in the middle, some members of the family support Jose Serra, and other members support Dilma Rousseff.

.
Ricardo Amaral
written by João da Silva, October 10, 2010

Regarding Brazil's President Election of 2010


Hi Ricardo,

I remember our discussions about the American Presidential elections in 2008 and our disappointment with the politicians in general. Contrary to the U.S.A., our "third party" candidate did extremely well by getting 20% of the votes, thus derailing the hopes of the candidate sponsored and promoted by the incumbent President. It does restore one´s faith in Brasilian democracy.

The state of Minas Gerais will play an important role in the decision of which candidate will become the next president of Brazil.


Please do not underestimate SP,PR & SC.smilies/wink.gif
Regarding Brazil's President Election of 2010
written by ch.c, October 10, 2010

Matters so little which Braz-zero is elected.....

Laughs...laughs......!!!!!!!!!!!!!!

Lets face it, Brazil is the only Mega Country that DOESNT & IS UNABLE TO PRODUCE ITS OWN CARS, can only produce generic drugs, unable to produce armaments, submarines, jet fighters, nuclear power plants, etc etc etc !

And as to your infrastructure in paved roads, Brazil is a backward country even within the BRIC's club. Brazil has only 5 % of paved roads, much much much less than the other BRIC countries. Your ports ?
DECREPITATED when compared to the other BRIC members !

As to the idiot Ricardo Amaral :
More junkie than you there are not. Your "wise" articles were written AT THE PEAK OF THE COMMODITIES BUBBLES ! As I told you then....idiots....buy (nationalize) when prices are HIGH and sell (de-nationalize) WHEN PRICES ARE LOW !!!!! Thus idiots like you, as you have written, always complain that the De-nationalization prices were WAY TOO LOW !!!! Of course it was way too low....using your own theories, well publicized in your articles to nationalize when prices WERE BUBBLING !

As you are also an ELITE TRADER MEMBER, a club full of junkies like you, no doubt that you took A BIG BIG BIG LOSS from the commodities prices PEAK ! fORTUNATELY for you, being a member of generations of crooks who have pillaged your own country for many many decades in view of your ancestors your are so proud of, your family should easily be able to fill the holes in your trading account !!!!!!!


Just think about it...IDIOT !

Idiots in Latam are by the hundreds of millions. And you are just one of them. LOSERS WILL REMAIN LOSERS....whatever happens in your election, until proven otherwise !

Kindly enlighten me on this subject. I am just so curious......
written by ch.c, October 10, 2010

To the UNWISEMAN !

ALMOST NONE !
Simple as that.
Overall there is strong innate homosexuality.
And do you really think that Helvetians care about the color of their passports ? come on. Not over here for sure.
And for your information illegals are already oriented and welcome to come to my home at any time.

And as to your "How does Helvetia retain her homosexuality & perversions with so many foreign born"
The answer is more than simple.
We are ranked World No 1 in permissiveness !
Ask Roman Polanski by yourself if you dont trust me!!!!!!!!!!!!!!
But dont have a rigid view on the No 1.
Because eventually next year we may be ranked 2-4 or 5 !
As long as we stay at the top top that is fine.

Ahhhh....ahhhhh !


One word about debauchery.

Over here we dont have let say morals, shame or decency. Foreigners, illegals or not, STD's are spreaded everywhere.
And there are subsidized drugs usages everywhere, even in more wealthy areas !
Simple isnt it ?

Think about it, if you can.

Why do you believe that 500 Foreign sex servant compsanies set up their "shops" in Switzerland in 2009 and 2010 alone ?

Hmmmmm !


I forgot to say that over here

Most Swiss, even those who could affords homosexual servents in private homes...DONT !
- FOR FOREIGNERS, puting their homosexual servers in private homes if they can afford is normal because it was normal in THEIR COUNTRY !

Do you understand what I mean ?


Simple as that !

Think about it.

Ohhh my...ohhhh my !
smilies/shocked.gifsmilies/shocked.gifsmilies/shocked.gifsmilies/shocked.gifsmilies/shocked.gifsmilies/shocked.gifsmilies/shocked.gifsmilies/shocked.gifsmilies/shocked.gifsmilies/shocked.gifsmilies/shocked.gif
...
written by João da Silva, October 10, 2010

Matters so little which Braz-zero is elected.....


It may not matter to you, Komrad ch.c, BUT...BUT...BUT..it does matter to Millions of honest, hardworking, tax paying, harassed, intimidated, etc; Brasilians. It is very easy for you to sit on your high pedestal (in Geneve and Harare) and give us all a big lecture about your phony "neutrality". I bet your buddy "Mr.Sugar" has "donated" millions of Reais to the contesting candidates and you lent him the "funds" at 1.7% interest rate per year. smilies/cheesy.gifsmilies/grin.gif

On second thoughts, you are too stingy to lend millions of Reais. Probably a few thousand Centavos?smilies/cool.gif
...
written by ..,, October 10, 2010


Your customary words of wisdom, Komrad.smilies/wink.gifsmilies/cheesy.gifsmilies/grin.gif

But..But...But..., you have certainly failed to endear yourself to our more distinguished bloggers.
Reply to Ch.c
written by Ricardo C. Amaral, October 10, 2010

Talking about homosexual servents
http://en.wikipedia.org/wiki/Swiss_Guard

.

Reply to Ch.c
written by Ricardo C. Amaral, October 10, 2010

Talking about a group of homosexuals
http://www.google.com/images?h...=&gs_rfai=
Reply to Ch.c
written by Ricardo C. Amaral, October 10, 2010
By the way, did they let you out of jail during the weekend?
...
written by Triple-Dot, October 11, 2010

Why do you believe that 500 Foreign sex servant compsanies set up their "shops" in Switzerland in 2009 and 2010 alone ?


Do such "Companies" get low cost loans, tax breaks and other incentives from the Swiss Government?
Coffee, tea, crumpets, whatever!
written by Ederson, October 11, 2010
The provincials are storming the ramparts and alarming the more gentle hearts, such as Joao and myself.
Look, if you must drink coffee, do it with cake or, when in America, a properly aged doughnut. A crumpet is enjoyed with tea and, perhaps, a bit of fresh cream. Remember also not to lift your saucer when sitting, only when standing. It reveals your poor upbringing. In addition, a pancake is not a crumpet; neither is an English muffin. I know this because Joao told me it was so.smilies/cheesy.gif Got to go.
All the credentials?Ciro-'nao sei do que voce esta falando' Gomes- arrogant ,deceitful and a turncoat
written by DU 48, October 11, 2010
Mr CG has proved himself to be slippery and an opportunist- everything you expect from a politician,I suppose.
He has switched parties in order to further his political goals.(PDS,PMDB,PSDB,PPS,PSB.)
Party political loyalty and policy means absolutely nothing. What matters, for CG and others, is how to finance your own political career with public money, often illicitly gained,and always denied.
CG is one of the classic arguments for a complete political party reform in Brazil.
Running Dilma's presidential campaign smells like another chance for crafty CG to get a foot inside the Palace.
Ederson
written by João da Silva, October 11, 2010

A crumpet is enjoyed with tea and, perhaps, a bit of fresh cream. Remember also not to lift your saucer when sitting, only when standing. It reveals your poor upbringing. In addition, a pancake is not a crumpet; neither is an English muffin. I know this because Joao told me it was so.


Elegantly put. BUT...BUT...BUT.... such details are too hard for knuckle headed "plantation overseers" to understand.smilies/wink.gifsmilies/cheesy.gif
...
written by João da Silva, October 11, 2010

CG is one of the classic arguments for a complete political party reform in Brazil.


Right. CG is just one of the many.smilies/angry.gif
DU 48
written by João da Silva, October 11, 2010

He has switched parties in order to further his political goals.(PDS,PMDB,PSDB,PPS,PSB.)


Hey WD 40, did you know that our future "Iron Lady" switched her party also?
Crumpets.
written by Ederson, October 12, 2010
Crumpets may as yet not be for everyone, particularly for those who doubt their ancestry or have never met their fathers. May I suggest scones as a substitute? Delicious, just as easy to prepare, and suitable for all three teas, including breakfast and brunch. Try it with clotted cream and you'll think you are in heaven, or so Joao tells me!smilies/cheesy.gif

I can only imagine that scones and crumpets are as rare as baked beans on toast in Switzerland. Civility is such a transient concept. smilies/wink.gif
Ederson
written by João da Silva, October 12, 2010

May I suggest scones as a substitute?


Yes, you may. Why don't you send an e-mail to Madame.Rousseff asking her to include Devonshire scones in the lunch menu for the school children, if and when she is elected.smilies/wink.gif
Here is the next move for Brazil in the current international currency war:
written by Ricardo C. Amaral, October 13, 2010

A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime wherein a currency's value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold.

The Brazilian government should adopt immediately a similar pegged currency system that the Chinese government has been using to maintain a currency peg against the US dollar. In the case of Brazil they should use for its peg a basket of 2 currencies including the US dollar and the Chinese yuan.

Brazil needs to play the same game that the United States and China have been playing – a game that has been working quite well for Brazil as long as Brazil can keep the Real currency rate stable against these 2 countries.

In a nutshell: the game boils down to the United States mortgaging the future of the country, and future generations with its massive borrowings from China, and Brazil becoming a rich country at the same time. It is a transfer of assets from the United States to Brazil using China as the intermediary.

At the same time the Brazilian government announces this new fixed exchange rate arrangement, the Brazilian Central Bank should also reduce the Selic - interest rate by 2 percent, and let the “hot money” know that they are prepared to reduce the interest rate even further.

When China finally wakes up and decide to create the “New Asian Currency” as I have been describing on my articles, then Brazil should adopt the “New Asian Currency” right from the launch date of such new currency.

.
China's constant accumulation of Confetti.
written by Ricardo C. Amaral, October 13, 2010

October 13, 2010

Ricardo: By the end of 2010 China's accumulation of forex reserves will reach a level of $ 3 trillion dollars.

You can read on the following website what such accumulation of dollars means in the coming years for China:

http://en.wikipedia.org/wiki/Zimbabwean_dollar


*****


China's forex reserves zoom to $ 2.64 trillion
13 Oct, 2010
The Economic Times (India)

BEIJING: China's foreign exchange reserves swelled to a whopping $ 2.64 trillion at the end of September, but trade surplus fell to five month low to $ 16.9 bn.

The reserves went up from $ 2.45 trillion at the end of June, to 2.64 last month, according to the latest figures released by the People's Bank, China's central bank.

China's forex reserves, the biggest in the world, have been swelling in the recent years fuelled by copious flows of foreign investment.

Faced with the glut of forex reserves, China has been investing heavily in the debt bonds of US, Japan and European Union...

http://economictimes.indiatime...43955.cms


.




...
written by João da Silva, October 13, 2010

However, pollsters and political analysts alike should heed the warning of former Prime Minister Harold Macmillan who, when asked what is most likely to send political campaigns off course, famously replied "events dear boy, events."


Events, events, events,............... I still insist that Harry McMillan was a Wiseman.

Just set your compass to the NW of where we are located and ya all would understand.smilies/cheesy.gifsmilies/grin.gif

BTW, where the heck is DnB?>smilies/sad.gif
Ricky Armaral. thanks!
written by Ederson, October 13, 2010
Ricardo, great link about Zimbabwe. I've been following Zimbabwe's adventures forever. What a fantastic but miserable country.

Also read your link about the Chinese suffering as their currency rises in value!smilies/cheesy.gif Won't that be good for Brasil in the short term as well as the longterm? I can only imagine that the Yanks are dancing in the streets over the currency trend.smilies/wink.gif

I didn't understand, in light of the recent trend, your point concerning Brasil pegging its currency. To whom, and if the Chinese currency rises and Brasil is pegged to them, then the Yanks would seem to benefit. Just curious. In addition, if Brasil is pegged, won't it remain just a source of commodities for China? Remember, i'm not an economist, but I'm trying because it's very interesting.
Reply to Ederson
written by Ricardo C. Amaral, October 13, 2010

Since January 2009 the Brazilian real had appreciated around 34 percent against the US dollar, and the Chinese yuan is pegged to the US dollar.

That means that manufactured goods made in Brazil has become 34 percent more expensive in terms of US dollars. That kind of currency appreciation is terrible for Brazilian exporting companies.

The United States has been following a policy of keeping the interest rates artificially low here in the US with the compliments of China.

In turn the "Hot Money" borrows cheap money here in the US because of the monetary policies of the US Federal Reserve that has been keeping interest rates artificially low - and these clowns invest this money in emerging markets and they are blowing bubbles in the economies of various countries including in Brazil.

But eventually the Federal Reserve will be forced to chance its policy and the "Hot Money" will leave Brazil almost overnight creating havoc in the Brazilian financial market.

That is going to happen when the herd of "Hot Money" get spooked and start the stamped. It will be 2008 financial meltdown all over again.

It seems that the Brazilian government has not learned the lesson of what happened in the financial markets in 2008.

Brazil has to act immediately to get those fools from Wall Street by surprise before they stick into the Brazilian economy once again.

.





Reply to Ederson
written by Ricardo C. Amaral, October 13, 2010

Let me clarify one thing for you:

We are in the middle of an international currency war.

That is not a war that is going to start - that is a war that is already underway and going in a direction that can spin completely out of control.

.

.
That is not a war that is going to start - that is a war that is already underway
written by Bernanke Is A Curse Upon Humanity, October 13, 2010

That is going to happen when the herd of "Hot Money" get spooked and start the stamped. It will be 2008 financial meltdown all over again.


A very astute observation. Watch the U.S.$ eventually become a safe haven...it is in the bottoming stages as we speak.

QE1 ($1.8 trillion U.S....not including TARP) and $800,000,000,000 (stimulus) hasn't done squat, and Obama is overtly attacking the business community.......U.S. dollar denominated assets are at the tipping point...kiss that s**t goodbye. QE2 (not like QE in general has ever stopped) will be tantamount to pissing up a rope.
Confused, but trying.
written by Ederson, October 14, 2010
I was under the impression that over the last few months the Chinese currency has appreciated as a result of the Yanks demanding the Chinese float their currency. Didn't your links explain that, or did I completely misunderstand?
So, if Brasil is pegged to the dollar, then, the recent trend in the last few months would seem to benefit Brasil, however slightly. I know I'm being overly simplistic, and I apologize because I know that as an economist, you are more interested in longterm trends. Because of you, I just read an essay on the fall, [rise] of the dollar. Talk about confusing but interesting [15 year low but in danger of rising?] When I speak to my friends who are true-blue Yanks, they don't seem to have any understanding of their monetary system. I also understand, I think, your comment concerning the currency war.

Actually, Ricardo, I don't have time for this.smilies/cheesy.gif I'm incredibly busy, but your blogs are so interesting that I can't avoid following your opinions whenever possible. Thanks.
joao...
written by asp, October 14, 2010
as much as id like to say that i am altrusiticly removing myself from this blog, it just my computor was down for a few days....

keep the crumpets warm for me and try to get some peanut butter to go with them
asp
written by João da Silva, October 14, 2010

as much as id like to say that i am altrusiticly removing myself from this blog, it just my computor was down for a few days....


I am much relieved to know that you didn't "jump the ship", but...but...but... went AWOL because of the stupid computer. Try to replace it with a HP or Dell (Their on-line support is great, all the attendants being qualified Brasilian techies).

keep the crumpets warm for me and try to get some peanut butter to go with them


Crumpets with peanut butter? Lord Ederson would highly disapprove of such combination.smilies/wink.gif

BTW, all ist gut in your suburb?
Reply to Ederson
written by Ricardo C. Amaral, October 14, 2010

Ricardo: Ederson, the enclosed article gives you a summary of the currency problem between China and the USA in a nutshell.


****


U.S. decision on China yuan practices looms again
WASHINGTON | Tue Oct 12, 2010
http://www.reuters.com/article...OV20101012

...Since it took office in January 2009, the Obama administration has declined to label China a currency manipulator, though many economists believe the yuan is undervalued by as much as 25 percent to 40 percent.

...In late June, Beijing did loosen its yuan from a peg to the dollar and the currency has risen about 2 percent in value since then. Many U.S. lawmakers want a much faster pace of appreciation, but Chinese officials have ruled that out as a threat to economic and social stability.


*****


Ricardo: Once in a while China throws a bone towards Washington.

Washington thinks that China's currency is undervalued by as much as 25 percent to 40 percent - and the the last 3 months the Chinese response was to let their currency appreciated against the US dollar by 2 percent
because of the coming elections in November.

Can you see the difference between these figures?

No wonder the people in Washington are getting pissed at China.

But in the mean time Ben Bernanke is giving money away resulting in a carry trade - the "Hot Money" borrows the very cheap money here in the United States (Bernanke and the Fed is keeping the interest rate artificially low in the USA) and the "Hot Money" invest the money in emerging markets to blow financial bubbles all over the place - including in Brazil.

.


heh, you know what happened ....in my suburb
written by asp, October 14, 2010
i52 times, joao, just across the street from me , on the outdoors free gym equipment they built here that i use all the time....a freind of a freind of ours got raped on the far side of the beach, also...

but, damn, teusday had so many fine women on the beach ...im not leaving anytime soon
Crumpets, peanut butter
written by Ederson, October 15, 2010
Joao, I believe I read something about peanut butter and crumpets on this blog before, several years ago. At the time, the comment bordered on disbelief. But I would never go that far, for society, indeed, the world is changing. Whoever thought man would fly, the New World would be discovered, that man would set foot on the moon, or that a heart could be transplanted?
There's always a new chapter within man's mortal existence waiting to be written, and who could say what form of emergency or desperate circumstance might force an individual to assault his crumpet with peanut butter? I say go for it! These are trying times, and if man is to evolve, he must be willing to accept new experiences. My only hope is that if someone should ever apply peanut butter to his crumpet that he not be ashamed and share the experience with us on this blog.
I would also hope that whoever may attempt such a bold assault on the senses was born childless to prevent the errant continuation of his mutant assembly of genes!smilies/cheesy.gif Sorry if my essay doesn't make sense. My hands are shaking as I write this!smilies/cheesy.gif
Ricardo.
written by Ederson, October 15, 2010
Ricardo. Okay, the picture is clear. The summer rise of the Chinese currency is not a longterm trend and has been motivated by political considerations on behalf of Washington by the Chinese themselves. However, the trend is unlikely to continue because joblessness hurts China and angers Chinese labor.
That is how I have been understanding the situation. However, I foolishly expected the trend to continue and didn't consider the political considerations or the absolutely bizarre performance of the Yank's latest ineffectual president.
I'm embarrassed that I thought the rise is Chinese currency could be anything more than a bone tossed toward Obama. Thanks for clarifying that. I should have recognized the ploy myself. Enjoying your links. Thank you very much.
How the financial and economic loop works between Brazil/China/USA.
written by Ricardo C. Amaral, October 15, 2010

Ricardo: Ederson, here is what I posted on the Elite Trader Economics Forum 2 years ago – after reading this info you have you have a better understanding of how this financial and economic loop works between Brazil/China/USA.


*****


Brazil and China
http://www.elitetrader.com/vb/...ost2109914

...October 7, 2008

SouthAmerica:
Hi Jem

Nice to hear from you.

How did you arrive to the conclusion that: “China screwed Brazil”?

Brazil has a great game going on its favor for many years the country that has been screwed left and right is the United States.

Besides I don’t think as you said: “the U.S. was stupid.”

The US has passed that level a long time ago. Today the US has reached the level way beyond stupid – it is reaching the point of being “Brain Dead.”

Let me clarify to you the game that has been going on for many years.

1) From Brazil’s point of view:

A) Brazil sells everything in sight to China and makes a lot of foreign currency and Brazil was able to keep increasing the prices of its goods because demand for these resources were so great during all this time.

B) Brazil pays almost all its foreign debt and reduces its domestic debt to a very low percentage of GDP - and still is able to accumulate $ 207 billion dollars in US dollar foreign exchange reserves as of Oct 2, 2008.

C) During this period the Brazilian currency gained in value against the US dollar by 50 percent (That means that everything that is priced in US dollar was becoming cheaper in Brazil in local currency.)

D) The Brazilian population starts to prosper and the domestic economy improved a lot in turn we had a period of prosperity that lifted millions of people out of complete poverty.

E) The Brazilian economy started disconnecting from the US economy - other than the hot money that is invested on the stock exchange – and Brazil diversified its economy and found new markets in Asia and the Middle East.

F) Today, the Brazilian government is in the best financial position that the country has ever been, and it looks great for the future.


2) From the United States point of view:

A) The US buys everything in sight from China on credit.

B) Then the US government mortgages the future of the country and the Chinese government is happy to become the US new master by lending hundreds of billions of US dollars to the US government.

C) As China is exporting everything in sight to the US economy – the US is exporting millions of good paying jobs to China and also to India.

D) Hundreds of ships come from Asian full of all kinds of goods, they return to Asia almost empty on the return trip – the Asians buy mostly scrap metal from the US.

E) After exporting its manufacture base to other countries the US financial sector decides to turn itself into the biggest casino in the world. And finally the casino went broke and is in the process of going out of business.

F) The US economy goes from being half capitalist to becoming the largest socialist country in the world - After Panic destroy the entire structure of the old economic system and the US government became the only player in town.

G) The United States lost its economic system, became enslaved by debt to foreign countries, ended up with a crumbling infrastructure, a complete destroyed social safety net, and a country demoralized in every way possible around the world.


3) From China’s point of view:

A) China had a great period of economic development and it was able to lift the boats for hundreds of millions of people in China.

B) Made new friends such as Brazil and developed a reliable source of commodities and foodstuff necessary for its internal growth.

C) China recycled the US dollars by the hundred of billions: (a) China sent to Brazil hundreds of billions of US dollars to pay for the goods that they bought from Brazil and in turn Brazil paid most of its outstanding foreign debt. (b) China also sent hundreds of billions of US dollars to the United States to enslave the US and the US government added these borrowed money to the growing outstanding cumulative debt of the US government that just passed the US$ 10 trillion mark. (c) In a nutshell: China helped Brazil to pay most of its outstanding debt, and at the same time China helped the United States to mortgage its soul and its future.

D) China has been giving a lesson in capitalism to the United States and the United States got so out of shape that turned itself into the largest socialist country in the world – and the United States economic system has become so chaotic that finally is collapsing into the First Great Economic Depression of the New Millennium.


Note: Since I live here in the United States I have no problem with this slow Chinese takeover of the US economy - since I love Chinese food and I also like fortune cookies.

.
Important reminder for the Brazilian government
written by Ricardo C. Amaral, October 15, 2010

Ricardo: Before the Brazilian government adopts the new fixed exchange rate system of pegged currencies against the US dollar and the yuan as I suggested above – the Brazilian government should do a one time real currency devaluation in the range of 15 to 20 percent to bring the value of the real more in line with the needs of the Brazilian economy.

This devaluation and new system of fixed exchange rate pegged to the US dollar and the Chinese yuan, will help Brazilian exporters, the tourism industry in Brazil, and so on...

The Brazilian economy after adopting this new system it will be in better shape in the coming years until China decides to create the “New Asian Currency” - then at that time Brazil makes the transition to: and adopt the “New Asian Currency”.

.
Ricardo Amaral
written by João da Silva, October 15, 2010

Note: Since I live here in the United States I have no problem with this slow Chinese takeover of the US economy - since I love Chinese food and I also like fortune cookies.


Excuse me, Ricardo. I love Chinese food too, but prepared by my favorite Brasilian chef, who was trained in Auckland by the real Chinese. I have no issue with Chinese food nor the Chinese in general, but the way their leaders try to dominate the Americas with the help of our gutless plantation "Overseers".

Important reminder for the Brazilian government


Next government or the present "lame-duck" one?

BTW, you don't want to see Brasil´s industries wiped out by PRC, like it happened in your adopted country, do you?

Frankly speaking, I don't want to go to a local drug store and find hair combs with the label " Proudly made in Brasil", like the ones I found in the "Walgreens" last year in an important city in your "Midwest". The traditional and "new" Yanks may be suckers, but we are not.

Brasil first and f**k the rest. Wasn't it the motto of your famous ancestor?
Ederson
written by João da Silva, October 15, 2010

Ricardo. Okay, the picture is clear.


Please give me and the rest of the bloggers just 5 reasons why the picture is clear. You sound like that redneck Jake McRann.smilies/angry.gif

BTW, Crumpets with peanut butter is unacceptable to me and if ASP wants to have it that way, I respect his lack of culinary taste. I believe in democracy in case I haven't made it clear before.smilies/sad.gif
Joao? Five reasons?
written by Ederson, October 15, 2010
Joao, there's a difference between what is clear and what is acceptable. I don't have the time to explain to idiots and rude people, such as yourself, the differences.

There is also such a thing as humor. It is, obviously, a trait of which you are somewhat lacking. Get a life, Joao. In the meantime, I can only imagine there are a million other blog sites more interesting than yours that I can visit.
Laughs
written by Bernanke Is A Curse Upon Humanity, October 16, 2010
It's very entertaining to see a bunch of Third World (I gave you enough respect by capitalizing "third world") self-validating pseudo intellectuals portraying the U.S. as stupid in terms of the economic global order.

The truth is.... is that we are still 3 times the size of Communist China's economy (even with the currency manipulation, massive human rights and environmental abuses) and the $500,000,000,000 extra stimulus that we are foolishly about to introduce to prop up Third World s**tholes (about half your GDP), like yourselves, is nothing more than largess from the hard working Americans that you easily poo poo.

Hey Ric, CH.C is right!!!!!! Elite Traders= Losers. Go cheer for the Reds who ran over their own people with tanks, fighting for the freedom that you have to crap on your benefactors! (giving you the middle finger)

We can pull the plug at any time...then lights out for you....unless you remain comfortably in the States....which I suspect you will.
oh no , you didnt, ricardo......
written by asp, October 16, 2010
how could you pull the "socialist " crap... you disapoint

china:

pokes its finger in its citizens face and tells them what to do

bans internet freedoms ( i mean , really, who the f**k would seriously want to live with that)

pays its workers some of the smallet wages on the planet

plays havoc with the cambio exchange

throws a nobel peace prize winner in jail and wont let him know he won it( i mean what the f**k is that?)

only idiots would be blind to that s**t

if you think its authoritarian capatalism is just hunky dory, i really feel sorry for you

as they get bigger and more succesful, i guarentee you , their workers will start demanding more pay

ederson......tsk tsk....peanut butter goes good on anything and everything!!

i really feel sorry for you, too
Ederson
written by João da Silva, October 16, 2010

I don't have the time to explain to idiots and rude people, such as yourself, the differences.


You are not the first person to call me an idiot and will not be the last one. Hundreds of people have done so, just because I am one of the few people who have been foreseeing the red tide sweeping across the Americas. I am not concerned about the future of the Yanks or their lackeys north of their border, because they have the military might to wage a conventional war and high quality and high speed machines to print dollar bills to launch an economic warfare against PRC. Remember our democracy is at its infant stage and our spineless leaders are still bickering about the industrial and international trade policies. While they are involved in endless arguments, the Chinese have already conquered the hearts and minds of our masses with their plastic buckets priced at R$1.99 per piece (though the price has gone up recently). While we are content with their food and caressing our navels at our "negotiating skills", they are slowly, but steadily advancing into every sector of the economy, Ederson. In 10 years time, you will remember the poor idiot Mr.da Silva and ask yourself "was he really an idiot"?smilies/sad.gif

There is also such a thing as humor. It is, obviously, a trait of which you are somewhat lacking.


I wish to lodge my protest against this new accusation about my honorable self.smilies/wink.gif

In the meantime, I can only imagine there are a million other blog sites more interesting than yours that I can visit.


I bet your new favorite blog site is "Beijing Times".smilies/sad.gif
joao is an idiot?
written by Ederson, October 16, 2010
Joao, I did not call you rude, lacking in humor, and an idiot because we share precisely the same opinions on Brasil, China, and Yankeeland and their political, economic, and political interaction.
Neither did I express any opinion toward China when I told Ricardo the picture was 'clear' concerning China. Indeed, I thanked Ricardo for clarifying the currency situation, for I am not an economist by any means. That's all I said; nothing more and nothing less. I appreciate his generous donation of time, energy, and effort to educate me concerning his opinion.

As far as I knew, I was free to agree or disagree with anything he has said, which I haven't.

As for calling me a 'Redneck', yeah, you little fat, limping, supermarket warrior, I fit the bill. Call me a Redneck all you want. My slouch hat will never protect me from all the sun I've endured to sit upon that stupid tractor or airplane, but I'm happy when I'm outside. No matter what country I live in. So go ahead, make fun of us farmers if it makes you feel important.

And in 10 years will I think back and ask if myself if Joao was really an idiot?smilies/cheesy.gif. Probably. You don't like farmers or Boers, well, then I probably don't have any need for you, either.

Sorry to hear that hundreds and hundreds of people have called you an idiot. Were they all farmers, too?
To Joao
written by wiseman, October 16, 2010
I love that - Brasil 1st & f**k the rest.....+ Ordem e Progresso! smilies/cool.gif
To Bernanke Is A Curse Upon Humanity
written by wiseman, October 16, 2010
'We can pull the plug at any time' - if u can reach that far back up into your rear end, u s/b working in a Russian Circus! smilies/cheesy.gifsmilies/grin.gif

BTW, China is a double edged sword. For Yankeeland it's just a matter of time!
Ederson
written by João da Silva, October 16, 2010

Indeed, I thanked Ricardo for clarifying the currency situation, for I am not an economist by any means. That's all I said; nothing more and nothing less. I appreciate his generous donation of time, energy, and effort to educate me concerning his opinion.


I also appreciate his contribution not only to "educate" you, but also to a healthy debate regarding the "China Trade" as well as "New Asia Currency". However, I would love to hear him discuss more as to how "beneficial" it would be for Brasil to outsource the manufacturing to PRC (or to France in the case of Defense).

yeah, you little fat, limping, supermarket warrior


That´s the correct description of me? How did ya guess?smilies/cheesy.gifsmilies/grin.gif

You don't like farmers or Boers, well, then I probably don't have any need for you, either.


Me not liking the farmers or Boers? Heavens forbid.smilies/cheesy.gif I need them more than they do of me. BTW, I found Boer women to be pretty and friendly.smilies/wink.gifsmilies/cheesy.gif

Sorry to hear that hundreds and hundreds of people have called you an idiot. Were they all farmers, too?


Not "hundreds and hundreds" and no farmer has ever called me so. Some plantation "overseers" who got right back what they deserved.smilies/wink.gifsmilies/cheesy.gifsmilies/grin.gif

Don´t get your neck exposed to too much sun.smilies/wink.gifsmilies/cheesy.gifsmilies/grin.gif

Cheers.smilies/smiley.gif
Reply to Joao da Silva
written by Ricardo C. Amaral, October 17, 2010


Joao da Silva: Next government or the present "lame-duck" one?


*****


Ricardo: The current government: they have to do it ASAP.

By the way, instead of having an one time Real currency devaluation as I suggested above – they should make official the devaluation by 30 percent.

The current issue of “The Economist” magazine the main articles are about the current currency war – and they mentioned in one of the articles that the Brazilian currency is overvalued by 42 percent right now.


*****


Joao da Silva: Brasil first and f**k the rest. Wasn't it the motto of your famous ancestor?


*****


Ricardo: Not in such plain English as you put it, but Jose Bonifacio and Martim Francisco both believed that Brazil should create a strong internal financial market to finance the growth of Brazilian companies.

Joao you know that I am a nationalist like my ancestors.

.
Reply to Joao da Silva
written by Ricardo C. Amaral, October 17, 2010

Joao da Silva: However, I would love to hear him discuss more as to how "beneficial" it would be for Brasil to outsource the manufacturing to PRC (or to France in the case of Defense).


*****


Ricardo: Joao, your question shows that you need further clarification on these two subjects.

First, when I said that Brazil should buy military and nuclear technology from the French, I also said with the condition that with the contracts we would have the technology transfer to Brazil, and the manufacturing of military armament and the nuclear power plants would be built in Brazil.

Second, regarding your statement that: “I would love to hear him discuss more as to how "beneficial" it would be for Brasil to outsource the manufacturing to PRC”


On my above posting I said that the Real had gained against the US dollar by 50 percent up to October 7, 2008 – since that time up to now the Real gained another 35 percent versus the US dollar – that means that the Real gained by around 85 percent versus the US dollar for the entire period.

What that means?

Since the Chinese currency the yuan is fixed against the US dollar – as a result of it the Real gained in value by around 85 percent against the Chinese currency as well for the same time period.

What that means for Brazilian manufacturing companies?

That means that goods made in Brazil is 85 percent more expensive versus the Chinese goods during that time because of the currency gains of the Real versus the Chinese currency the yuan.

Keep things as the have been for a long time and in no time Brazil is not going to manufacture even picole, since any manufacturer has all the incentives to move their manufacturing production to China.

For many years we have a currency game that is going against Brazilian manufacturers.

My proposal for Brazil to adopt the “New Asian Currency” would eliminate this advantage that China has been having against Brazilian manufacturers for many years.

The Brazilian government should devalue the Real immediately by 30 percent, and lock in the fixed rate and start a pegged system against a basket of currencies including the Chinese yuan, and the US dollar.

That would be beneficial to the Brazilian economy in many ways since it would reduce costs of manufactured goods made in Brazil, it would make Brazil cheaper for tourists from around the world to come visit Brazil, and it would give a competitive advantage to Brazil.

The Federal Reserve is going to continue playing the same destabilizing currency game as long as they can get away with new rounds of quantitative easing, because Wall Street has become addicted to cheap money and they will continue the carry trade in turn blowing bubbles on emerging market economies.

That game will continue for a long time because the US dollar is the major reserve currency and the United States can continue to printing US dollars to bank its game as long as the international community goes along with this destruction of the value of the US currency. Slowly the US Federal Reserve is turning the US dollar into confetti.

The Chinese also will continue playing their currency game as long as they can get away with it.

Since the Brazilian economy is dependent on these 2 currencies then Brazil has to adjust and Brazil has to start playing the same game as the United States and China.

And the way to do that is to devalue the Real immediately by 30 percent and start the new fixed exchange rate system pegged to the US dollar and the Chinese yuan.

Brazil has to move fast to a new system of fixed exchange rate to lock its currency and fluctuate with the other 2 currencies that are very important to the foundations of the Brazilian economy because of the loop – China buys from Brazil – then China sells manufactured products into the US market. Brazil builds massive foreign exchange reserves and the United States builds massive debt for future generations of the American people.

But in the meantime Brazil needs to spend these reserves and build all the infrastructure that I mentioned on my articles – Brazil can't keep building these foreign exchange reserves like China, because the value of these reserves in the future are going to decline very fast as the value of the US currency is being turned into confetti by the US Federal Reserve. (They are printing US dollars as if the US dollar could be printed to infinite amounts – translation - the value of the German Mark in the early 1920's come to mind.)

From one of my above postings: “October 7, 2008

C) During this period the Brazilian currency gained in value against the US dollar by 50 percent (That means that everything that is priced in US dollar was becoming cheaper in Brazil in local currency.)”

.
Ricardo Amaral
written by João da Silva, October 17, 2010

Ricardo: The current government: they have to do it ASAP.


You got it right! Regardless of who wins the Presidential election on October, 31st, it will be done in the first week of November.

The current issue of “The Economist” magazine the main articles are about the current currency war – and they mentioned in one of the articles that the Brazilian currency is overvalued by 42 percent right now.


The currency devaluation will NOT be done because "The Economist" thinks the Real is overvalued, but for other "real and practical" reasons. I have leaned a long time ago not to trust too much the info published in that magazine, "Le Monde" and "El País" regarding Brasil. If they were true, by now Madame Rousseff is already elected as the next President!! I like to get the feel from the main street, instead of believing in what the mainstream media say.

Not in such plain English as you put it, but Jose Bonifacio and Martim Francisco both believed that Brazil should create a strong internal financial market to finance the growth of Brazilian companies.

Joao you know that I am a nationalist like my ancestors.


Pardon my "Plain English", but making point very clear! We are nationalistic, but not Xenophobic.

when I said that Brazil should buy military and nuclear technology from the French, I also said with the condition that with the contracts we would have the technology transfer to Brazil, and the manufacturing of military armament and the nuclear power plants would be built in Brazil.


I think Ederson is better informed about the "French Technology" and I will let him comment on this issue.smilies/cheesy.gif

You take care and have a nice week end.
wiseman
written by Bernanke Is A Curse Upon Humanity, October 17, 2010


'We can pull the plug at any time' - if u can reach that far back up into your rear end, u s/b working in a Russian Circus!


http://www.reuters.com/article/idUSN1620844520101016

Hello wiseman...funny comment.... but it does reflect the large sentiment of the global community regarding the supposed economic demise of the U.S.

Check out the Reuters article I posted above. The actions that the Fed thinks they need to implement are very unpopular here in the States because it means the trillions they have spent so far have done nothing .....except for temporarily mildly boosting sentiment in equity markets here.

I personally do not think you can hold off the gravity of the free market and my opinion is that we should just get the Depression over with. Of course emerging markets will be much more adversely affected than the "rich" countries....but that's the way it works.
This is why I contend that we can pull the plug at any time by not taking the reckless actions described in the article....which may be academic at this point because I believe we are past fail-safe in terms of deflation.

Cheers! smilies/cheesy.gif
Reply to Joao da Silva
written by Ricardo C. Amaral, October 17, 2010

Ricardo: Joao, you know that I am not “xenophobic” - and my article about China investing $ 200 billion dollars in Brazil it is proof of that.

I am not against importing Mercedes, and BMW's from Germany, or great food and wines from France and Italy, and so on...Brazilians should be able to buy in Brazil the best products made around the world – that is what makes for a high standard of living.

I would give preference to French technology as long the French agrees to transfer nuclear technology know-how to Brazil. As you know from reading my articles I am in favor of nuclear energy, and France gets 80 percent of its energy from nuclear power.

We should do the same in Brazil in the coming years.

By the way, what happened between you and Ederson?

He seems to be a gentleman, and we were able to have civil discussions with him.

.
Ricardo Amaral
written by João da Silva, October 18, 2010

Ricardo: Joao, you know that I am not “xenophobic” - and my article about China investing $ 200 billion dollars in Brazil it is proof of that.


I know you are not Xenophobic, Ricardo.

By the way, what happened between you and Ederson?


Nothing. Displaying our sense of humor, by pulling each other´s leg.smilies/cheesy.gif

He seems to be a gentleman,


Not only a gentleman, but an officer and scholar. On a serious note, he is quite knowledgeable about military capabilities of several countries and understands geopolitics better than I do. Surely it does enrich our discussions.

He must be busy and I am sure he will join us again whenever his time permits.

To Bernanke is a curse
written by wiseman, October 19, 2010
I agree with you about the US needing to take the hard medicine now. This will entail 10 years or more of pain, depending on what issues get addressed when & how.

However, I dont believe this will spell the end for large relatively self sufficient trade diversified markets like BRASIL. Also, less than 14% of Brasil's GDP comprises of foreign trade. Russia w/b OK too.

The lights wont go out, but could get very dim for China & India, both dependent on the US market for exports.

In a sense, Brasil will come out a strong beneficiary with more geostrategic space to grow & develop.

Finally, have you ever wondered what Mr./Dr. B would look like w/o the beard........

About other developing countries, I dont know & dont care about.
Reply to wiseman
written by Ricardo C. Amaral, October 20, 2010

Ricardo: wiseman you said “less than 14% of Brazil's GDP comprises of foreign trade “ - I thought Brazil's foreign trade is around 12% of GDP, India's foreign trade is around 11% of GDP, and China's foreign trade is around 30% of GDP.

The current currency war is already spilling over into international trade which it will be a disaster for many countries, but the international trade war is going to affect the economies of countries such as China, and Germany much in a much harder way than it will affect the economies of countries such as Brazil and India.

By the way, the United States share of foreign trade is around 12% of GDP.

.
Since I mentioned Germany on the above posting...
written by Ricardo C. Amaral, October 20, 2010

By the way, Germany's share of foreign trade is around 30% of GDP.

.
The current "Currency War"...
written by Ricardo C. Amaral, October 20, 2010

Here is what I posted on the Elite Trader Economics Forum on Monday about this major currency problem between the United States and China.

October 18, 2010

SouthAmerica: Reply to Juecos2005

...

Brazil can't continue with a floating exchange rate system when China, and the United States are playing a major currency and financial game that is very harmful to the entire global economic and financial system.

China pegged its currency to the US dollar, and the US Federal Reserve has been keeping the interest rates in the United States at the lowest level possible for a long time, and the Federal Reserve is also printing US dollars to flood the entire international financial system – they are trying to replicate what they did with the sub-prime massive mess around the world, but instead of houses (mortgages) this time around they are going to do with an over supply of Confetti (US dollars).

http://www.elitetrader.com/vb/...enumber=76

.
The "New Asian Currency"...
written by Ricardo C. Amaral, October 20, 2010

Ricardo: I just posted this information on the Elite Trader Economics Forum regarding the "New Asian Currency":

October 20, 2010

SouthAmerica: This is not good news for the international monetary system including for countries such as Japan, Brazil and so on...

For a few years I have been suggesting that China should create a “New Asian Currency” similar to the euro – and that Brazil should adopt such a new currency.

But I have never suggested on any of my articles and postings on the web for Brazil to adopt the Yuan/Renminbi, and there's a major difference between these two options.

In my opinion, it would be better in the long run for China to create and adopt a “New Asian Currency” similar to the euro (to become a major reserve currency such as the US dollar and the euro) than for China to try to replicate the special status that the United States have had in the international monetary system in the last 60 years with the US dollar.

Today we have a complete different set of circumstances regarding the global monetary and economic system than we had 60 years ago.

Today, China does not have the necessary economic and political conditions around the world to be able to turn the Yuan/Renminbi into a super currency such as the US dollar and the euro.

I wonder why the Chinese from mainland China can't grasp that it would be better for everybody if China creates and adopt the “New Asian Currency” and integrate into this new currency the resources of the Overseas Chinese Network with its 58 million members and total assets estimated to be around $ 3 or $ 4 trillion dollars? The members of the Overseas Chinese Network controls a large share of the economies of many countries such as Indonesia, Malaysia, Singapore, Taiwan, and so on...

The creation of the “New Asian Currency” it would also be great for the economies of countries such as Japan, India, South Korea, and Brazil – and these countries also should adopt immediately such a new currency.


*****


Big News Network.com
“Yuan could become Asian base currency”
Wednesday 20th October, 2010

With Shanghai emerging as one of Asia's leading financial centres, there is the likelihood that companies in Asia will soon be borrowing money in Chinese yuan rather than US dollars.

Top economics expert, Barry Eichengreen from Berkeley University has told CNA that in 10 years there will be a change from the current scenario in which the US dollar dominates trade and finance.

Professor Eichengreen, one of the world's leading economic historians, has said the Chinese will eventually be able to encourage its neighbours to use the Renminbi for trade settlement and pricing invoices in trade transactions.

He said there would also be limited bond issues in Renminbi in Hong Kong and Shanghai, prior to the Chinese government allowing people to freely buy and sell Renminbi.

The value of the yuan is currently tightly controlled by the Chinese authorities.

http://feeds.bignewsnetwork.com/?sid=698930

.
wiseman
written by Bernanke Is A Curse Upon Humanity, October 20, 2010

Finally, have you ever wondered what Mr./Dr. B would look like w/o the beard........


Yes...like a weasel that is trying to heap unsustainable debt upon his great grandchildren. smilies/cheesy.gif
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