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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (30840)	3/13/2008 4:06:24 AM
From: Elroy Jetson	Read Replies (2) \| Respond to of 217516

Brazil is trapped in the Mundell-Fleming model of currency exchange rates. There are three Factors: 1.) Autonomy of domestic interest rates and economic policies; 2.) Currency exchange rate stability; 3.) Free capital flows. Robert Mundell's model states that any nation can only control any two of these factors, but only two. Controlling three is impossible. By choosing restricted capital flows, #3, as well as #1, Brazil has produced a currency rise which is destroying their economy. Now in a panic Brazil is once again permitting free capital movement. This will allow the currency to fall in value, but it may decline quickly enough. If this action prove insufficient, Brazil will next rapidly lower their interest rates in a desperate attempt to maintain the viability of their economy. Bookmark this post/prediction. .