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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 413.19+1.1%Jan 6 4:00 PM EST
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To: THE ANT who wrote (20063)8/16/2007 1:31:14 AM
From: elmatador   of 219061
 
Liquidity squeeze is good for Brazil. Unwinding carry trade good too! The Brazilian Real has been appreciating too fast. Brazilian CB without weapons to fight the sudden increase besides buying cheap dollars to prop up its reserves.
Even during the liquidity crisis (from July 24th) CB bought USD6bn of Elroy's country money.

The government had to allow a % of the USD coming from exports, to hibernate outside before sending in to Brazil to diminish the amount of dollars entering the country.

Now with carry trade unwinding and liquidity squeezed, the government has a better control over the foreign exchange.

We need the Brazilian Real at a steady 2.1/USD. Economy jolted by rising Real is good because it forces it to adapt to a higher currency thus increasing productivity.
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