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

To: Chas. who wrote (68889)	12/1/2010 10:56:46 AM
From: Cogito Ergo Sum	Read Replies (1) \| Respond to of 217845

Agree on the Sol differential ... in fact many Chinese Middle Class wouldn't make the cut above the poverty line here ..., was looking at exactly that here Message 26960286 which is a strong reason why I think the currency peg is not the bigger issue... Relative SoLs and expectations are out of sync.. and this causes a big advantage for China.. It will change.. very slowly... but will accelerate.. to higher SoL and expectations.. Chinese coming from so low down in the SoL department... Middle class in China and Middle Class in the West is apples to oranges... 40 years ago ? you are a pioneer :O) TBS

To: Chas. who wrote (68889)	12/1/2010 11:17:22 AM
From: elmatador	Respond to of 217845

Chop, chop. Is that the axe of austerity we hear? It’s not such a familiar tool in Brazil, but its finance minister has said he will cut by half funding for one big outlet for public funds, the state development bank BNDES. High public spending has kept Brazilian interest rates too high for many people’s liking and fiscal consolidation is a key priority for the minister, Guido Mantega, who has just been reappointed by president-elect Dilma Rousseff. His comments suggest he is wasting no time in getting down to it. He told Bloomberg that he will halve the loans the government provides to BNDES from their 2010 level of R$104.7bn ($61.4bn). BNDES provides subsidised lending to industry and infrastructure projects. Mantega said: It is important to carry out this fiscal consolidation and help reduce interest rates, because this will end up helping the currency, too. It was Mantega who first said the world was engaged in a “currency war”, as capital inflows pushed Brazil’s real to uncomfortable highs. But at the moment, he said, the real was trading at a “reasonable” level as the eurozone debt crisis had brought a temporary “truce” to the war. Last week Mantega said of his budget-cutting orders from Rousseff: It will be a substantial reduction. The instruction was: a heavy hand. Brazil has the highest interest rates of any big economy. But with politicians wary of alienating voters, the need to cut public spending to reduce rates went largely unmentioned in the election campaign that brought Rousseff to power. In many ways, Brazil’s economy is the polar opposite of sickly Europe, where austerity is becoming part of everyday life. Brazilian gross domestic product is forecast to expand by 7.5 per cent this year and for that reason economists say that it does not need any fiscal stimulus. Henrique Meirelles, Brazil’s outgoing central bank governor, will be quizzed on fiscal and monetary policy by beyondbrics readers, who have a chance to ask him questions in a readers’ interview due to be published later this month.