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

To: THE ANT who wrote (38993)	8/18/2008 3:47:39 PM
From: elmatador	Respond to of 217818

If over pricing of goods, services and salaries would result on a crash, Europe would have crashed twice a day for the past 25 years. Why it has not and why Brazil has to? I explain why not. All goods, services and salaries are priced in BRL. The BRL only can be seen as overvalued once compared with the USD against which it has most valued in the past 6 years. Or my income in USD when I repatriate it says. Since most of the goods, services and salaries cannot be ported across a border to be provided, sold and earned, and then it is immaterial to say it will crash looking only to prices of goods, services and salaries within the Brazilian economy. Unless the Brazilian economy was totally and absolutely open in between its trade partners that would hold true. But it is not. Translating this last paragraph means: if the supermarket in Brazil could source bananas from Ecuador, or Central American, i.e., the source of MD bananas, then we could compare bananas with bananas. But we cannot. Because the banana producer, transporter, storage and ripening cold chamber owner, supermarket and the consumer, all of them use BRL to trade. What all Brazilians should open their eyes for is: They could look at the price of any given good, service and salary -across the whole world- and see what good, service and salaries was too expensive and use their BRL according to these findings. The guys who work for telecoms have done that already because they know the price elsewhere. Thus Ericsson employees no longer find profitable to work abroad since the couple of thousands of USD they get paid do not reward the hardship to be away from home. What the foreign investor -whose money is here subject to the vagaries of the BRL-, is reasoning is: What are the chances of the BRL collapsing and how much Brazil pays for the risk the investor is taking? It is this that will either hold or drop the BRL. The guys who understood that early on, bought Brazil on the cheap and profit from the outcome. The guys who did not, they are face with a harder task: 1) Is Brazil too expensive for me to enter now? 2) Are the risks higher today than 2 years ago? I would say the right question would be: what are the options to Brazil and the BRL?