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

To: THE ANT who wrote (35698)	6/12/2008 8:32:06 PM
From: elmatador	Respond to of 217545

if this straighten things up, at the macroeconomic level, at the microeconomic level will devastate small businesses and increase unemployment. Surely a new stimulus package would be needed to help the ordinary consumer. The cost increases will be just too much to bear.

To: THE ANT who wrote (35698)	6/18/2008 7:25:10 AM
From: elmatador	Read Replies (1) \| Respond to of 217545

Analysts: Double-digit inflation could undermine Brazil's booming economy ELMAT: The capacity of the economy to absorb money is being tested. Need to divert USD outside the country. So far this has been done by buying US treasuries. Need to find new ways to send money out to avoid poisoning. Analysts: Double-digit inflation could undermine Brazil's booming economy The Associated PressPublished: June 18, 2008 SAO PAULO, Brazil: Inflation in Latin America's largest economy could break the single-digit barrier by the end of the year, setting in motion a chain reaction that could undermine Brazil's booming economy, analysts said Tuesday. Rising commodity and oil prices are pressuring inflation indices, which in addition to jeopardizing the economy could affect the popularity of President Luiz Inacio Lula da Silva, said David Fleischer, a political scientist at the University of Brasilia. A recent Central Bank survey of financial analysts predicted that by the end of the year, the IGP-M index, which is used to adjust rents and public utility fees, would stand at 10 percent, Fleischer said. "This could cause a chain reaction on other indices and eventually on consumer retail prices that could get out of hand," he said. "To prevent inflation from getting out of control, Brazil will have to increase interest rates. This will cause an influx of dollars, strengthen the real (Brazil's currency), make exports more expensive and hurt the country's balance of trade." The Central Bank's benchmark lending rate now stands at 12.25 percent and analysts interviewed by the Central Bank predict it will be at least 14 percent by December 2008. Today in Business with Reuters Spielberg looks to Bollywood for cashAs Chinese costs soar, manufacturers expand elsewhere in AsiaBush to seek an end to ban on oil drilling Last week, the government reported that the annual inflation rate for the May 2007-May 2008 period was 5.6 percent, mostly due to rising food prices. Accumulated inflation from April 2007 to April 2008 was 5 percent. If a scenario of creeping inflation persists, then the gains posted by Brazil's economy could begin to erode, Fleischer said. Last week, the government reported that Brazil's economy expanded 5.8 percent in the first quarter compared to the same period in 2007, amid an extended consumer spending spree and heavy business investment to meet demand. On Tuesday, President Silva met with his top economic advisers to discuss measures to keep inflation in check. The discussions were not made public. On Monday, Silva told businessmen gathered at Sao Paulo's stock exchange that keeping inflation under control has become a top priority of his government. "We will control inflation and at the same time maintain sustainable growth," Silva said. "We have the instruments, knowledge and experience to deal with this problem, which has become our biggest challenge." Salomao Quadros, of the Fundacao Getulio Vargas economic think tank, agrees. "Although the danger of ending the year with double-digit inflation is real, I think that in September we will start seeing commodity prices coming down, which will ease inflationary pressures," Quadros said. "This together with the fact that the government has the tools to control inflation, and the political will to use them, should prevent inflation from spiraling out of control." » Save up to 72% on morning home delivery of the IHT Terms of Use