Courtesy of Mish.
File this story in the category of “be careful what you wish for, you just may get it”.
I am talking about Brazil, more specifically, Brazil’s currency, the Real. Let’s also investigate comments made by former finance minister Guido Mantega about the Real.
BRL vs. US Dollar
click on any chart for sharper image
Flashback March 2012
I highlighted the March 2012 candle because that’s when Brazil Declared New Currency War on US and Europe.
“When the real appreciates, it reduces our competitiveness. Exports are more expensive, imports are cheaper and it creates unfair competition for businesses in Brazil,” said Guido Mantega, the finance minister who was the first to use the controversial term “currency war” in 2010.
My comment at the time was “Mathematically speaking, the desire for every country to be net exporters is impossible. Massive trade wars are on the horizon as a result.”
Flashback July 2011
In July of 2011, in Credit Crisis in Brazil: Consumer Loan Rates Hit 47%, Defaults Soar, Debt Service Tops 50% of Disposable Income I posted an email from Otavio. He is from Brazil.
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