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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 374.35+0.7%Nov 18 4:00 PM EST
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To: THE ANT who wrote (50280)5/23/2009 12:46:05 AM
From: elmatador  Read Replies (2) of 217867
 
Interest rates will come down because of a combination of USD down BRL up lower commodities' prices and global slump.

Interest rates dropped from 13,75% to 10,25% and BRL keeps going up.

A few signs of growth in the world economy and a Tsunami of 7 billion USD entered Bovespa. According to CB, only in the first 10 working days of May, exchange flow was 2 billion positive USD2 billion.

Lack of other places to spread capital forces the flow into the Bananão. Mexico could attract some but is in bad shape.

Thus that FED newly printed money only goes in to the bananesca economy.

Solution: Drop interest rates to 9%. Which means more money running away from fixed to variable income.

Govern help:
1) CB should continue to buy USD to avoid it going down. CB already doing that but it is only paliative solution.

2) Lower taxation on export sector. Beef and steel sectors -which are energy intensive businesses- are negotiating with government to get lower taxes.

But government will run out of options to help export sector since 'donating' taxes to the businesses to protect their margins means less money into government coffers.

Source: Exame
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