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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 375.93-1.8%Nov 14 4:00 PM EST
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To: Rarebird who wrote (45149)1/11/2009 12:50:24 PM
From: elmatador  Read Replies (1) of 217771
 
Brazil did the same. Printed to pay its costs. Caused hyper inflation. After stopped printing, hyper inflation was gone and then extorted money from the economy to pay its costs.

Have kept interest rates high to finance that debt. Expected the economy to skyrocket and then debt would decrease as a % of the GDP.

Now it needs to do two things to keep economy going: cut taxes (did that last month for automakers to clear their yards) plus need to cut interest rates to avoid downturn.
Noting that elections are end 2010, grow must not sputter else Lula's party is toast.

Demographics need to work its way (majority of the population in productive years and for a while little amount of old people) means less costs for government in the coming two decades.

If keep growing 3.7% to 4.5% for a decade things can be well. If economy goes to the dogs, Brazil will pass through the demographic window without getting rich. China risks this too.
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