Crisis Hits Brazil: Credit Thins Out, Interests and Inflation Up

Sรฃo Paulo, Brazil, Metro subway Brazil's annual inflation rate rose to a three-year high in October as the currency's significant plunge against the US dollar pushed up costs, according to the latest release from the government's statistics and geography institute, the IBGE.

Consumer prices as measured by the benchmark IPCA index rose 6.41% in the 12 months through October from 6.25% in September. The annual rate was the highest since July 2005.

As the global financial crisis has investors abandoning emerging markets, Brazil's currency real has lost a quarter of its value against the US dollar in two months, pushing up prices of goods and materials purchased overseas.

The October CPI was up 0.45% with food prices leading with 0.69%, boosted by a 7.74% jump for the price of black beans, a basic staple, and 3.61% for meat.

Since January inflation has remained above the 4.5% annual midpoint target of Brazil's central bank. The uncertain economic outlook convinced the Central Bank last October 29 to leave the benchmark rate unchanged at 13.75%, according to minutes of their meeting published this week.

The real lost 12% in October following a 14% loss in September, which was the Brazilian currency's worst month since a 20% plunge in September 2002.

Earlier this week it was announced that Brazil vehicle registrations during October fell for the first time in 2 years as credit dried up and interest rates rose. Vehicle registrations slipped to 239.200 units in October from 244.500 units a year earlier, the country's automakers association, known as Anfavea said in Sรฃo Paulo. However production was little changed at 296.300, while exports declined 16% to 66.000.

Finance Minister Guido Mantega said a government-controlled bank will provide the equivalent of US$ 1.9 billion in loans to carmakers' financial arms to help sustain sales this month and in December.



  • Show Comments (17)

  • dnbaiacu

    Just goes to show…
    that GREED RULES (for now),. And many are just content to let others starve. ๐Ÿ™ ๐Ÿ˜ฅ

    Many thanks to the “enlightened” “movers and shakers”..


    Yet, “we don’t need UNIVERSAL PRINCIPLES ……????
    What a joke! ๐Ÿ™ ๐Ÿ˜ฅ

  • dnbaiacu

    And Joao… since we are touching on the topic.
    And this Raul guy. The new ‘SECRETARY OF STAFF” for Obama?????? And you want “PEACE AND SECURITY?”
    I REALLY DO hope everyone is getting the picture. The house is getting ‘divided against itself” VERY QUICKLY!
    This is going to get so interesting your head will spin. ๐Ÿ˜ฎ ๐Ÿ˜ฎ ๐Ÿ˜ฎ
    Looking 4ward to hearing from you VERY SOON Joao.

  • dnbaiacu

    No Joao…
    I beg to differ.. (and I think you like that ๐Ÿ˜‰ :D)

    NO ONE . AND I mean NO ONE can be so oblivious to the geo-politic situation at hand as it relates to the Middle East. Something is going on either on Brazils end or the Middle East’s end. Brazil in general may be oblivious to it. But I guarantee you the Jesuits aren’t.!
    You don’t FEED THE ENEMY!
    Unless you have a cobra up your sleeve. (Ask Augustus! ๐Ÿ˜€ ๐Ÿ˜€ :D)
    I am not being paranoid. Neither am I personally afraid. I know what time it is. And it is , what it is. I just find it VERY VERY interesting.. Intriguing.The push to allie trade wise with an entity the U.S is so bent “reducing our dependence on “. (Their words exactly) And their consistent spew on “nations that don’t like us very much”.
    The Pope is in on this somewhere.. Mark my words! If us peons know “Brazil is so rich in natural resources” , someone else does too! ๐Ÿ˜‰
    And keep in mind , today,, BASIC INSTINCTS RULE. Greed and self-interest!. THEY,, the infamous “powers that be” count on that!
    Sorry Joao,, I don’t buy it!
    [quote]eliminating the European intermediaries!!
    Man, you ought to know better than that! ๐Ÿ˜€ ๐Ÿ˜€ ๐Ÿ˜€
    Not a chance Hades! Sheol if you like Hebrew ๐Ÿ˜€ ๐Ÿ˜‰
    And this may your “European connection” via the Vatican. This is one of those things we will just have to watch. But the Vatican has their art of deception so perfected that this is going to be a hard one to pinpoint.
    This IS ‘growing and strange” .. Stay tuned! ๐Ÿ˜‰

  • dnbaiacu

    Speaking of food for oil
    [quote].remember we have all all the essencial things to guarante a life of humans food,food[/quote]
    And I brought this up on another thread .
    There is an obvious increasingly growing and strange relationship with Brazil and the Middle East ????????
    Something is going on , and I don’t think it is going to be pretty.
    Brazil is not that STUPID because the fact is Lula isn’t running anything.
    There are two articles in the issue on this mag about further transacting with the Middle East
    1) Brazil believes that a lasting and real peace agreeement will be reached there.
    2) Brazil will be used to poison the Middle East via brandless food products
    3) Rich Arabs are insuring themselves a naturally abundant place to go when they are isolated as a community by the global community at large that wants “peace and security”

    Either way it will bounce , something is going on. Money is involved. And big players aren’t stupid with money, ie “the Obama campaign”

    Anyone want to help me out? Besides telling me to go smoke something. Or stop smoking? ๐Ÿ˜‰ ๐Ÿ˜€ ๐Ÿ˜‰ ๐Ÿ˜€

  • Renay

    It is high time that Managers of the companies such as petrobras and others Stop getting high money bonus.
    Thaet money would employe others. The profits that they make are huge. It is time the goverment crack down
    The government should not allow forgiener to take our jobs , with the huge pay they get. Those position would employe serveral of our own people that need jobs and are quailifty for. The forgein companies that are here need to be tax heavily they are taking there profits back home. If they are here they should be only employing local people for the positions.

  • Denise

    Save your money as best you can.
    Buy only the most needed things. don’t eat out.
    The beach is free. Save save save
    Things will get better but don’t be foolish.

  • Joรƒฦ’ร‚ยฃo da Silva

    Doggy Daddy
    Great to hear from you. Came back from the interior of the state few hours ago. Did not use BR-101!

    [quote]By the way Joao did Lula ever fix the BR101 south of Floripa? [/quote]

    The work is still going on without end in sight. ๐Ÿ˜‰ Some stretch is complete, but that does not reduce the traffic jam. If I were you, I will stay in the Caribbean. One of the wettest springs and rains almost everyday. I wish they had direct flights from here to U.S!!

  • Doggy Daddy

    I’m Back for the short term.
    Ola Joao and all. Have been in the Caribbean for the last 10 months, opening some all inclusive resorts for my clients, however just had to come back and exchange some dollars for Reals while the crise is running hot. Just Love It !! Just wait until the airlines can’t get credit to fly the aircraft.. already happening in some parts of the world. This is a mess that most Brazilians don’t have any idea what has happened and where it is going. Hang on folks!!!!!.. By the way Joao did Lula ever fix the BR101 south of Floripa?

  • ch.c.

    our economy is not dependent on the SUPERFLUOUS our economy is based on the primary needs of all human race ????
    Funny coming from Brazil, a country with one of the World Highest WEALTH INEQUALITY !

    EVEN MORE FUNNY…..coming from a country that prefers to EXPORT Agricultural Products to the tune of over US$ 50 billion annually despite theys have 50 millions of citizens…UNDER NOURRISHED !!!!!!


    Then why your filthy government banned rice exports, when prices were at the top, and this despite your country always has an over production of rice for exports ????
    Reality was that YOU WANTED the prices to go even higher, in order to make rice even less affordable to the world poorest countries !
    India did the same. Egypt did the same. Argentina wanted to increase their EXPORT TAX on soyabeans. Russia banned wheat exports.
    You wanted to corner the grains markets PRICES ! YOU WERE CORNERED AT YOUR OWN FILTHY GAMES AND TRICKS !!!!

    Now if you are sincere, lets have the prices going even lower, much lower. LOW prices will make food more affordable to those who are the most dependants !
    I bet that Robin the Crook and even his peers in Russia, India and Egypt DONT agree.

    Your common sense and analysis is very LIMITED.

  • Joรƒฦ’ร‚ยฃo da Silva

    Dnb, you conspiracy consultant!

    [quote]There is an obvious increasingly growing and strange relationship with Brazil and the Middle East ???????? [/quote]

    It is not “growing” nor “strange”. The relationship is just “opportunistic” as Ch.c would love to say. Quit being paranoiac. If you have products to sell to the Middle East and have right buyers, go ahead and make money, eliminating the European intermediaries!!

  • Joรƒฦ’ร‚ยฃo da Silva

    [quote]foreign investors
    can invest in others places but here now is the land of oportunity.remember we have all all the essencial things to guarante a life of humans food,food, food land land to expand our food production [/quote]

    That is a good comment, Augusto. I am in full agreement with you. In order to do so, we need to send postive signals to attract [i]small and middle sized foreign [/i] investors, instead of trying to entice big investors. I have seen through my own experience that the small ones appreciate the natural resources Brazil has more than the big ones. May be I am wrong.

    As for your comment on Ethanol, I would rather see Brasil avoiding to get into this trap and concentrate more on the principle of “Food For Oil”. I think that we need to put some sense into the idiots in power about “Value Added Food Products” . Also remember that we can develop alternative sources of energy, instead of bragging constantly about extracting oil from the Pre salt layer.

    Anyway, it is good to hear from you after a long time.

  • aes

    The root of the Hebrew word for war (MILCHAMA) is LECHEM the word for bread.

  • augusto

    when crisis is on the horizon the first thing to do is guarante the food , energy ,ore, the resources to make the economy grow ,is a simple question of perception when the bad times come i think first to guarantee the food,i have a very optimistic idea about my country,because the oportunity is in our door,our economy is not dependent on the SUPERFLUOUS our economy is based on the primary needs of all human race, the countries can escape from crisis with trade agreements with brazil because we can guarantee some essencial things *like food for example the comments about crisis here is only foir make the brazilian investors retract and open a window to foreign especulators but my people is not idiot,we will grow grow and our partners will ecape from crisis with us .foreign investors
    can invest in others places but here now is the land of oportunity.remember we have all all the essencial things to guarante a life of humans food,food, food land land to expand our food production ethanol oil oil its only a question of perception countries of world be fast to made trade agreements with brazil ,dont lose the oportunity to guarantee the essencial beings.i live without so many things but without food….

  • ch.c.

    Stay bullish !
    Your cars numbers will increase, your 5 % paved roads WONT ! That was/is and will remain bullish for cars repairs companies !!!

    Traffic jams in SP, already one of the world worst for mega cities, will continue to go UP UP and UP !

    And to Joao…”Disinformation planted by the opposition.”
    Was liquidity that high in Brazil…BEFORE the crisis…..when cars loans were already at 27-30 % or so, consumer goods at above 40 %, and overdrafts at well over 130 % ?
    And is it better now that rates are at 35 % for cars, over 50 % for consumers goods, and around 200 % for overdrafts ????

    Dont worry, rates can go up to the roof (arent they already ?) or get lower by let say to the level before the crisis !!!!

    As long as you are happy to borrow at such rates, follow the order of Bin the Crook : keep shopping !
    Buy ONE, pay for 2 or 3 is great ! Isnt it ?

    ๐Ÿ˜ฎ ๐Ÿ˜‰

  • aes

    I just bought a loaf of bread for 3 Reals. Chicken, salmon, filet mignon still on sale, gas what is high, what imported products effect national inflation? The only stuff that is over priced is the crap you buy . . .80 Real T shirts and 200 Real tennis shoes.
    “October CPI was up 0.45% with food prices leading with 0.69%, boosted by a 7.74% jump for the price of black beans, a basic staple, and 3.61% for meat. . . pushing up prices of goods and materials purchased overseas”. A lot of black beans are purchased overseas. . . What? Rubbish.

  • Ric

    Good News
    Too many new cars now, not enough going to the junkyard. Traffic gets worse. Less new cars is good news at least to the poor people who have to wait ten minutes before crossing to congested highways.

    Good news for cambistas. Good news for those that repair shoes, cars, computers, and anything that can be fixed instead of thrown out for a new one.

  • Joรƒฦ’ร‚ยฃo da Silva

    [quote]Crisis Hits Brazil: Credit Thins Out, Interests and Inflation Up [/quote]

    Disinformation planted by the opposition. According to our almighty authorities, everything seems to be under control. Why create panic among the Brazilians by publishing such alarming and false news? I am not worried, nor should be our fellow bloggers.

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *


You May Also Like

Brazilian Minister Gets UN Award for Reducing Deforestation by 50%

The Brazilian minister for the Environment, Marina Silva, is among the seven winners of ...

Old Plan, Old River

California and Israel have been used as inspiration for several irrigation plans in the ...

Brazil Provides Consulting to Cabo Verde University

The Coordinating Office for the Training of University Personnel (Capes) of Brazil’s Ministry of ...

Brazilian Study Shows Hydropower Pollutes 4 Times More than Fossil-Fuel

Hydropower plants have long been a byword for clean energy. But researchers warn that ...


By I think it would be fair to say that a number of readers ...

No Other Businessman Beats the Brazilian in Optimism

To believe a survey conducted by international consultancy firm KPMG, Brazilian businessmen are the ...

Brazil’s Gol Airlines Ends Year with New Routes and Tricks

Brazil Airline Gol announced it will equip its new Boeing 737-800 Next Generation aircraft ...

Runoff’s First Poll Shows Lula Ahead in Brazil

Brazilian President Luiz Inรกcio Lula da Silva launched his runoff presidential campaign leading his ...

Lula, the Reluctant President

Lula does not look like a man about to assume power.  He looks as ...

Biotech Crops Are Killing Land and Life in Brazil and Latin America

Latin America is being invaded by genetically engineered (GE) crops. The promoters of these ...