MercoPress. South Atlantic News Agency
IMF says Brazil could experience flight of capital if Euro crisis worsens
Brazil could experience a flight of capital should the European sovereign-debt crisis worsen, and the country may use interest rates and US dollar reserves to combat contagion, an International Monetary Fund director said. Read full article
Comments
Disclaimer & comment rulesNot a problem, if European money pulls out, China will buy up as much of Brasil as it can get its hands on.
Oct 18th, 2011 - 10:46 am - Link - Report abuse 0“Not a problem, if European money pulls out, China will buy up as much of Brasil as it can get its hands on.”
Oct 18th, 2011 - 03:58 pm - Link - Report abuse 0You can't get rid of your talking points, do you? China wishes it could buy more of Brazil.
This situation, by the way, is the same for most other 3rd World countries. Capital flights occur whenever a new crisis is on sight. “Investors” then sell their assets in 'riskier' countries and return to 'safer' bets (usually the US and Europe). Since the new crisis has as its epicenter the West, this strategy doesn't make to me. But this is their problem. As Batista said, Brazil is not ill prepared; it has a large amount of international reserves. And if capital flight does occur, the currency will devaluate and the reserves will climb in value. What Brazil can't do is to increase interest rates to attract capital. A recessionary move isn't the right strategy to solve an economic crisis. And, as the late 90s Asian crisis proved, to increase interest rates in face of a currency crisis (an extreme form of capital flight) is counterproductive and harmful for the economy.
Thanks, Forgetit.
Oct 18th, 2011 - 06:20 pm - Link - Report abuse 0I value your insight into monetary matters.
We agree that China is poised to grab as much of & from Brasil as it is able when things go pear-shaped.
Let's hope there is enough resilience in the economy to avoid this (land-)grab.
Other nations - particularly Argentina - might not be so well placed and could suffer badly.
”You (Geotard) can't get rid of your talking points, do you?”
Oct 19th, 2011 - 12:30 am - Link - Report abuse 0No he can't. He can't stand it how his beloved England is sinking with it's problems while the nation he lives (I bet he's not a citizen but just a resident) is slowly rising. The only way to make himself feel so good and superiour is with “his” talking points, that mostly don't make sense at all or out dated. Poor man.
Fido,
Oct 19th, 2011 - 12:22 pm - Link - Report abuse 0all I do is comment on what goes on around me.
For instance,
today
the Brasilian minister of Sport is accused by a military police official - an ex-head of an ONG, so a man of some substance - of perpetuating corruption.
Globo News shows us the sick sight of the Brasilian Congressal majority coralling the Minister with protection, saying 'we will not listen to such accusations'.
Dilma declares him innocent until proved guilty, but where is the process to test the proposition?
Is an independant judiciary being mandated to test his innocence? NOT ON YOUR LIFE!
A corrupt Congress will establish a loaded congressional investigation and the man will continue in office.
If all in government are corrupt, how DO you impartially test innocence?
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