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To: THE ANT who wrote (81383)	7/12/2008 10:09:25 AM
From: elmatador	Respond to of 116555

Stop analysing me! LOL!

To: THE ANT who wrote (81383)	7/12/2008 3:07:33 PM
From: elmatador	Respond to of 116555

See this chart please. Do you see 2 years of interest rates drop affecting the BRL raise? finance.yahoo.com as you can see the chart depicts a constant rise of the BRL even with 2 years of interest rates drop. The government needs to rein inflation and has only interest rates to do it. The government has the merit of not putting any capital control in place as could have been the easy way out.

To: THE ANT who wrote (81383)	7/15/2008 3:34:44 PM
From: elmatador	Respond to of 116555

“..it is unfortunate that economists have not given us a better picture of how comparative advantage works at the micro level through the movement of labor, skills and capital. Mr. Fred Gluck, managing Director of McKinsey & Co. in the Wall Street journal, (Europe), Dec. 12, 1990. By then, 20 years ago, I was already convinced that economists could not answer the questions. Because they could not understand "how comparative advantage works at the micro level through the movement of labor, skills and capital." What the people -in Brazil- who were making macroeconomic decisions there believed that macro economics is reality. Macro economics is not reality. It is just a benchmark against which you can compare reality. At every instance you can go and do that benchmarking and come out with some questions for what you are doing. But what Brazil’s policy makers did was: Look at MACROECONOMICS as reality and implement them. This is typical of students that read text books and go looking for real world examples of what is there. But there isn’t. The text book only gives you the basics for one to benchmark against reality. The macroeconomics measures, implemented in 1994 failed at first because it kept fixed exchange, and then stabilized and restarted as free floating exchange rates. I call all Brazilian economists sorcerer apprentices. They rise from Universidade Federal Fluminense, and UNICAMP. Once the currency was put in free floating it worked, and the government kept economists out of the economic governance, Palloci, you may recall. Now free from people fiddling with the economy, and only fine tuning it, it is OK. Then micro economics can work. What we have seen so far, is only the first results. "Tirando o atraso". Brazilians are doing all kind of things they did not do during the "Lost Decade": Took kids to Disneyworld in droves, going to rock concerts of oldies, buying motorcycles and travelling abroad like crazy. All that is just a phase not that is going to be kept forever... This is how we have to look at people's decisions. Now economy will see a huge amount of money going abroad as they spend money in imported stuff and travelling. This will subsidized later. I give you one example: When I was in Prague, I visited the apartment of a friend. I want to see how a communist apartment -not for other reasons was since she was a beautiful young lady! She showed me the place. Then I understood why the market was huge for kitchens. Of course after living and growing in such a tiny apartment, anyone would need a good kitchen. I used to joke with her saying: If I want to impress a Czech girl, I would start talking about kitchens with her :-) The young Eastern Europeans left in droves to the West and as soon as they saw how it was returned. They had made the comparison and that was it. It was just a phase. Not as the Westerner thought they would all move to West Europe. It will happen the same to Brazilians as they pay €5 for a bottle of mineral water, or €100 for a meal.