The world is feeling the inflation created by covid and warmongering. US and European countries are sanctioning themselves, increasing energy, grain and other commodity prices. Central banks are foolishly raising interest rates globally to try to contain it (raising interest rates leads to more inflation). The US government has been cutting the fiscal deficit. So far $1.5 trillion. And they are proud of it. Recession will surely follow. Brazil's only chance to survive through this is with Lula's win, followed by removal of the useless expense ceiling. This year, we’re on track to cut the federal deficit by over $1.5 trillion – the biggest decline in a single year ever. — The White House (@WhiteHouse) May 6, 2022
The interest rate curve for Tesouro Direto below is inverted, meaning the future rates are lower than near term rates. This is not a good sign, it usually means we are undergoing an inflationary period but expect lower rates int he future due to a financial crisis of some sort, hence the lower future rates. This makes sense from the latest news of Brazil's past quarter showing a technical recession.
Such sad news that the entire country is facing skyrocketing inflation due to these guys deciding to devalue the currency, while significantly enriching themselves due to their offshore accounts in a foreign currency... This is just criminal. Plain and simple. And then it gets worse, as we learn they were against taxing of offshores! https://www1.folha.uol.com.br/mercado/2021/10/dono-de-offshore-guedes-defendeu-excluir-taxacao-de-paraiso-fiscal-de-proposta-do-ir-veja-video.shtml https://www1.folha.uol.com.br/mercado/2021/10/guedes-disse-a-comissao-de-etica-que-adotaria-medidas-para-prevenir-conflito-de-interesse-sobre-offshores.shtml Corruption in the government is alive and well. The right is no fancier than any other party when it comes to benefitting themselves from power...
So, good and bad news, let's look into it: Good news: an increase in tax income for the government usually signifies an increase in money circulation, which is probably good news for the GDP. It could be a one-off for a major government operation, which then would not mean its good news, it would be an outlier. Bad news: more money taxed away from the economy means the economy shrinks. If there is an increase in government spending above the amount taxed then we would see an increase. By itself its hard to understand the impact of higher tax income. It is also bad news if it is caused by inflation an no actual growth, which seems to be the case, at least partially. On a side note, if the…
According to Folha de Sao Paulo, this is a rare feat, that they indicate is due from the worst economic management since Brazil had hyperinflation. Guedes conseguiu a façanha de pôr o país em estagflação em uma crise global deflacionária
-b-b-but Guedes said the investors would come? Why aren't they coming?? Everything is so great now! 'Entusiasmo do estrangeiro com o Brasil tem diminuído bastante', diz estrategista do JP Morgan Asset
The government's debt as a % of GDP means absolutely nothing. There is no correlation between the two, no cap on government debt issued in its own currency. It does not create "debt for our children to pay". Ignore any news article or economist who says otherwise. Dívida pública brasileira sobe para 90% do PIB e bate novo recorde
Way to suck at your job Guedes! What does it take to fire somebody around here? https://valorinveste.globo.com/mercados/brasil-e-politica/noticia/2021/03/10/inflacao-medida-pelo-igp-m-alcanca-2983percent-em-12-meses-na-1a-previa-de-marco.ghtml
It doesn't look like it to me... Sinais por toda parte indicam que economia está decolando, diz Guedes
The financial media is now asking for higher interest rates in Brasil. They claim it is needed to hold back inflation. Its like no one understands how money really works. Well, the big money will win, and interest rates will go up. When that happens, usually the stock market goes down. So stockholders beware! On the plus side, the Real should go up in value against the US dollar. Everyone will be too broke to take advantage of that though... This is messy. With high unemployment, low GDP, devalued currency, high inflation, to increase interest rates is almost suicidal. It will hurt whatever was left of the economy, creating your typical stagflation. With Guedes in power, there won't be any countercyclical measures, there will be procyclical ones, meaning digging ourselves…