. Jem : I suspect the U.S. put up with the distorted markets for multiple reasons. But one of the reasons was clearly to bring China into the world community. They sad thing is that people like S.A. thought this all happened because the U.S. was stupid. ***** October 7, 2008 SouthAmerica: Hi Jem Nice to hear from you. How did you arrive to the conclusion that: âChina screwed Brazilâ? 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 donât think as you said: âthe U.S. was stupid.â The US has passed that level a long time ago. Today the US has reached the level way beyond stupid â it is reaching the point of being âBrain Dead.â Let me clarify to you the game that has been going on for many years. 1) From Brazilâs 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 â 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 â 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 â 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 Chinaâs 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 â 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. .
As for the Real here in Brazil. I was really hoping that consumer prices would fluctuate and improve with the strengthening Real - but no such thing, as well as no such thing when it weakened. See, the economy and trade is very protected here in Brazil. Cars from Europe have +50% taxes, and anything you want to import as a consumer is 50-60% taxes... rendering it virtually impossible to import stuff from other countries as a private person here. Any company wanting to do business here need to set up shop here... Dodge gave up in 2001, but their Dakota was the best car ever assembled here in Brazil. Engines in Brazil are not exactly top quality in efficiency, but they are the foremost country in the world at alternative fuel. Every gasoline product have increasingly more alcohol mixed in - a percentage increased every last 10 years I have been here. My Jeep Grand Cherokee 4.7l V8 was something I was worried about, and I asked at many gas stations if they could give me the octane value of the gas - but no one even knew what that was. I sold it for a nice profit after some years (on exchange rates), which was also quite nice. However, the popular engine here in Brazil is a "Flex power" where it can run on alcohol and gasoline. Many also install natural gas kits for around R$ 2000, but that dries the engine a lot, and need careful maintenance. Brazil is now net exporting petroleum, and that has enormous impact on the health of the economy - as well as the discovery of vast oil reserves, albeit at deep levels. Brazil is in fact doing better all the time, and improving the quality of life and wealth of every person here. It has improved a lot since I first came here - although I bought my first house and car here when Lula came into power and have stellar profits on my house investments now - more than 600% on a house 350m from the beach. I think they will do quite well in this financial turmoil - these are people who are quite used to much worse, and "normal people" here will not notice anything - they don't buy imported products, travel abroad or do international business. Although I do not like the protectionist attitudes of all the Brazilian governments - it does protect them to a large extent.
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. Fortune Cookie is an American invention.
About investing in Brazil... The fact that Brazilian exports are balanced in BRL and not dependent on the USD, means that many investments in Brazil are getting extremely attractive. Expenses for the exporters are not rising, although many find it more difficult to get credit now. This means that for national investors, they will be looking at increased profits in BRL from exports -- and Brazil is mainly an export economy still. E.g 15% of the meat "frigorifico" production is exported.
This is quite interesting SA. What are the the goods being exported by value - Is it heavily waited towards raw materials.
. SouthAmerica: Reply to Jem All kinds of natural resources, agricultural and foodstuff products, and some industrial products such as Embraer airplanes. .
well except for the air planes - My premise still holds. China is playing Brazil. you could export raw materials to anyone. or you could have kept them inside Brazil and consumed them internally to create the products China exports. China rigged the currency markets and took Brazil's place as an exporter of sophisticated goods. As I have told you before - 10 years ago you started to to see shoes saying made in Brazil. Now you see those sames shoes saying made in China. You losts thousands and thousands of good jobs in what was once one of your thriving export industries.
Uhhhh, then comes the historic script out of the drawer ... "the yankis robbed us all these years - nationalise what's left ... power to the people"
. October 7, 2008 SouthAmerica: Reply to trendmomentum Your picture is kind of cute, but there is major problem with this picture â Lula should not be in this picture even though he is a friend of Chavez. If you are trying to project to the world the idea of pals united under the same economic ideology then you should replace Lula with: U.S. Comrades Ben S. Bernanke, Henry Paulson, and George W. Bush. If you add U.S. Comrades Ben S. Bernanke, Henry Paulson, and George W. Bush to the above group then that picture would reflect a much accurate economic reality in the world of today Note: During the Russian Civil War, the Tsarist White Russians used the word comrades as a derogatory term for their Bolshevik enemies. .