Hyper-Inflation. Scary stuff. Most 40+ people in Brazil know what that means, and what life is like in that scenario. How likely is it that it will return? How likely is it that it would have happened had the PT party stayed in power? How likely is it now that a right-wingish party is in power?
All good questions. Here is an attempt at answering them:
1) Very likely. Brazil has a right-wing party but its populist, so it has a tendency to spend money to please the populace, while being dumb and believing that the government has a spending limit, and that spending generates inflation no-matter-what. So it is on a suicidal path by destroying supply, either through currency devaluations or demand suppression, all under the religious belief that the magical investors saviors of all economies will arrive just next week if they just destroy a few more jobs and companies.
2) Very likely. Not very fact based, but the saying that “politicians and diapers must be changed regularly and for the same reason” is good stuff. All politicians steal. Every single one of them. Yes, that one too. Stop being stupid. They owe people for putting them in power. How do you think they get elected? On charm alone? It just doesn’t work that way. They promised if elected they would favor their investors. Corruption is them paying back their investors. That’s it.
3) See 1. I am not seeing a path that doesn’t lead to a very bad future for the country. Loss of supply is the cause for hyperinflation, not excessive demand. Click here for an article explaining how it works. After that read this article from Folha. It is coming unless someone changes the path. Here is another article describing the cause of hyper-inflation being a loss of supply, not an increase in demand.
In summary: Happy Coronavirus Halloween!