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Strategies & Market Trends : Strictly: Drilling II
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To: Roebear who wrote (17164)8/10/2002 10:43:20 AM
From: Jim Willie CB  Read Replies (1) of 36161
 
overlooked factor in Brazil is currency effect on debt

since beginning of year, the Real has dropped 60%
that means local values are now 2/5 of what they were
that means dollar denominated debt is now 5/2 of what it was

so Brazil debts rose 150% !!!!!
this IMF $30B is nothing but a bucket of water on a bonfire
nothing but a 3-6 month reprieve
nothing but an opportunity for Americans to say "we helped"

I find the Argentina contrast very interesting
Arg bankers were stubborn in keeping their Peso constant
so their economy went to shit, uncompetitive
making their constant debt level unpayable
(they are a fishbowl example of US troubles upcoming)

but Brazil allowed their Real to devalue
their economy has not gone to shit, as a result
but their debt has skyrocketed to a level unpayable

screwed on the left, or screwed on the right, but surely screwed

imagine your home mortgage of $120k just went to $300k
I could not swallow that
economy or no economy, jobs or no jobs
that cannot continue to float

the currency turmoil is only beginning worldwide
Asian bank troubles will be front & center in a few months

JPMorgan and Citi are like two floating crippled ships
about to be attacked by pirates under six flags
Citi just saw a class action lawsuit for Enron nondisclosure
/ jim
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