- rule of democratic tyranny rule-by-making-up-rules simple-majority-over-unqualified-minority has been invoked and
- the will of the people as determined by the people per balloteering shall be rigorously enforced by action of immediate and automatic banning in one case, or by per usual free speech democratic nothing ever gets done free-for-all-by-any-and-all-qualified-learned-aware-or-not, and
- please make sure you exercise your vote and not waste your ballot
- time out until voting is tallied at 24-hours demarcation from ballot posts
siliconinvestor.com
- who says i cannot be democratic and am always for chaos :0)
- mob democracy is going to be fun ;0) sort of like constant revolution, where nothing ever gets done, unless and until democratically acquiesced-to dictatorship restored rule of law n order, so folks can prioritize and get on with the human rights to make money and feed family
in the mean time, re brazil, just in in-tray
From: J
Sent: Tue, March 8, 2011 12:02:42 PM
Subject: WeeBits No. 22/2011, Brazil's conundrum (08 March 2011)
FOR PRIVATE CIRCULATION ONLY
We are focused on producing an Asianomics report on Hong Kong following a week of meetings with leading economists, journalists and officials in the territory last week. But Rob Parenteau has been following up on his recent observations on the BRICs with a closer look at Brazil's just released GDP numbers. Rad on.
Brazil’s conundrum – Still no end to the inflation carnival
As we noted in ExposAsia No. 4, From Frying Pan to Fridge?, the BRICs have entered an especially tricky juncture, with Brazil in a particularly awkward position. Inflation fighting measures by policy makers have led to a deceleration in production activity, but the inflation carnival is still spilling through the streets in an all too raucous fashion. In Brazil’s case, last week’s real GDP release confirms the production downshift we flagged in the ExposAsia piece. Real GDP growth closed out 2010 at a 5% YoY rate of growth – nearly half the 9.4% growth rate achieved in the first quarter of 2010. Further to our point, the second half of 2010 managed only a 2.3% annualised real GDP advance over the first half. Absent service sector gains, which we hold with some suspicion (as they are concentrated in finance and a catch all “other” category), Brazil’s second half real GDP would have reflected a mild but broadly based goods sector recession.
Sifting through the real GDP details by expenditure categories, the second half downshift is most visible in government consumption, which actually contracted at a -0.8% annualised rate, and marked deceleration in capital spending momentum. More alarmingly, by industry, Brazil’s real GDP report reveals a 4.6% annualised rate of contraction in agricultural output, a 2.2% drop in construction, and a 1.6% dip in manufacturing relative to the first half of the year. It appears that policy tightening against inflation, rising input price pressures, and escalating import competition have all combined to knock Brazil’s goods producing sectors for a loop. True, Brazil’s export growth remained remarkably strong through year end despite Brazil’s currency appreciation, but the import share of GDP has, as of the end of 2010, lifted to an all-time high of 14.4%.
The question lingering in the front and the back of emerging market minds is whether policy makers across many countries will have to go too far in order to damp the escalating inflation pressures – pressures, ironically, that were unleashed in no small part by the prior liquidity creation of desperate central bankers elsewhere. In Brazil’s case, the second half 2010 goods sector recession has so far proven insufficient to break Brazil’s escalating inflation. The national CPI (INPC) is tracking close to a 6.5% YoY inflation rate, but over the six months ending in February this measure of inflation has bulged at a 9.5% annualised rate. Banco de Brazil’s survey of INPC inflation expectations for the next 12 months revealed expectations were still rising as of January. At 5.4%, there is clearly still some catching up to do with the actual inflation rate. No wonder Brazil’s central bank president Tombini felt he had no choice but to lift the Selic (the benchmark lending rate) by 50 basis points last week to 11.75% - and another 50 basis points to come is already widely anticipated.
Of course, policy rate hikes will tend to undermine the central bank’s own attempts to use elaborate currency intervention schemes to halt the appreciation of the real. This, no doubt, is one reason why Brazil’s President Rousseff is offering plans to cut government spending by a substantial sum of 50.1 billion reai – although oddly, the primary surplus target for 2011 appears to have been set in nominal level terms, and not as a share of GDP. Nevertheless, if fiscal and monetary policy brakes are now going to be applied on top of a goods sector that is already stagnating at best, may we suggest the question of policy overshooting is becoming increasingly moot in Brazil? In this regard, note the Brazilian unemployment rate has shimmied higher to 6.3% in January from the November low of 6%. Even at Carnival, the party must be paid for at some point. |
