Economia
Esta é uma carta fictícia do Bernanke para o Mantega, aparentemente publicada no FT. Tem um erro (fica para vocês apontarem). Já o resto é verdade.
Currency wars
Published: January 11 2011 15:12
Dear Mr Mantega,
Being frustrated politicians ourselves, we at the Federal Reserve rather envy you your currency war tub-thumping. But as Brazil's finance minister you might want to think of the consequences if we were actually to treat your ramblings seriously.
You say that "deep down" our policy of quantitative easing is a trade strategy - a weapon to boost competitiveness at your expense. Ending QE with a sharp rise in US interest rates would indeed strengthen the dollar against the real. But it would also make America's fragile economy crumble, by increasing the cost of corporate debt, at a record level of almost 50 per cent of gross domestic product and (through higher mortgage rates) destroying the property market and bank balance sheets (32 per cent of the $13,400 billion in bank assets are loans secured on real estate). Consumption would tumble.
And you must remember what happened when the US economy went pop almost three years ago? Money flooded out of Brazil and your claimed self-sustaining growth engine stalled. And if interest rate differentials suddenly move in our favour, investors would cease to find the returns on Brazilian assets so attractive. And you actually need their hot money to help increase investment levels from a low fifth of GDP as well as to balance your current account deficit.
But Mr Mantega, it was big of you to complain about China too, this time. Thanks for that. Ultimately the real is so strong because commodity prices are so high, and that in turn is because China's currency has been kept artificially low. OK, our QE makes that problem even worse. But frankly, Mr Mantega, you need to get off our case on that one. QE is just another form of monetary policy and US rates are low because our economy is currently weaker than yours. When the outlook improves, we will tighten. You're not exactly suffering down there. Or is there something worrying you that markets don't yet appreciate?
Yours sincerely,
Ben Bernanke
- Repeteco (agora Com A Turquia)
TURKEY’S BRAZIL'S ruling Justice and Development (AK) Workers' Party (PT) party is expected to win won a third term of single-party rule at next month’s last year's election, even though some voters fret about its autocratic ways....
- Mais Zeitgeist
Chega até a ser engraçado... Of DOW JONES NEWSWIRES SHANGHAI (Dow Jones)--A relatively weak U.S. dollar has been hurting Brazil's economy, and a potential Chinese yuan revaluation against the dollar could help stabilize global currencies, Brazilian...
- Flying The Bs Fund
Finance Minister Guido Mantega has announced the main guidelines for the Brazilian Sovereign (BS) Fund. According to the minister: 1. Resources for the fund should come from the excess primary surplus relative to the official target (3.8% of GDP); 2....
- The Economist:brazil's Economy - Wild Horses
Inflation is at 6.3% and is poised to break through the ceiling of the Central Bank’s target of 2.5-6.5% for the first time since it was adopted in 2006. That is despite the currency surging to 1.58 reais to the dollar, close to its peak since it was...
- O Retorno Do Dragão
O futuro da Bovespa decide a China. Mais cedo ou tarde a China vai provocar o collapso do real e da Bovespa: "... Foreign inflows to Brazil totaled $28.7-billion in 2009. In order to defend the US-dollar from spiraling lower, the BoB bought $24-billion...
Economia
From Bernanke with love
Esta é uma carta fictícia do Bernanke para o Mantega, aparentemente publicada no FT. Tem um erro (fica para vocês apontarem). Já o resto é verdade.
Currency wars
Published: January 11 2011 15:12
Dear Mr Mantega,
Being frustrated politicians ourselves, we at the Federal Reserve rather envy you your currency war tub-thumping. But as Brazil's finance minister you might want to think of the consequences if we were actually to treat your ramblings seriously.
You say that "deep down" our policy of quantitative easing is a trade strategy - a weapon to boost competitiveness at your expense. Ending QE with a sharp rise in US interest rates would indeed strengthen the dollar against the real. But it would also make America's fragile economy crumble, by increasing the cost of corporate debt, at a record level of almost 50 per cent of gross domestic product and (through higher mortgage rates) destroying the property market and bank balance sheets (32 per cent of the $13,400 billion in bank assets are loans secured on real estate). Consumption would tumble.
And you must remember what happened when the US economy went pop almost three years ago? Money flooded out of Brazil and your claimed self-sustaining growth engine stalled. And if interest rate differentials suddenly move in our favour, investors would cease to find the returns on Brazilian assets so attractive. And you actually need their hot money to help increase investment levels from a low fifth of GDP as well as to balance your current account deficit.
But Mr Mantega, it was big of you to complain about China too, this time. Thanks for that. Ultimately the real is so strong because commodity prices are so high, and that in turn is because China's currency has been kept artificially low. OK, our QE makes that problem even worse. But frankly, Mr Mantega, you need to get off our case on that one. QE is just another form of monetary policy and US rates are low because our economy is currently weaker than yours. When the outlook improves, we will tighten. You're not exactly suffering down there. Or is there something worrying you that markets don't yet appreciate?
Yours sincerely,
Ben Bernanke
loading...
- Repeteco (agora Com A Turquia)
TURKEY’S BRAZIL'S ruling Justice and Development (AK) Workers' Party (PT) party is expected to win won a third term of single-party rule at next month’s last year's election, even though some voters fret about its autocratic ways....
- Mais Zeitgeist
Chega até a ser engraçado... Of DOW JONES NEWSWIRES SHANGHAI (Dow Jones)--A relatively weak U.S. dollar has been hurting Brazil's economy, and a potential Chinese yuan revaluation against the dollar could help stabilize global currencies, Brazilian...
- Flying The Bs Fund
Finance Minister Guido Mantega has announced the main guidelines for the Brazilian Sovereign (BS) Fund. According to the minister: 1. Resources for the fund should come from the excess primary surplus relative to the official target (3.8% of GDP); 2....
- The Economist:brazil's Economy - Wild Horses
Inflation is at 6.3% and is poised to break through the ceiling of the Central Bank’s target of 2.5-6.5% for the first time since it was adopted in 2006. That is despite the currency surging to 1.58 reais to the dollar, close to its peak since it was...
- O Retorno Do Dragão
O futuro da Bovespa decide a China. Mais cedo ou tarde a China vai provocar o collapso do real e da Bovespa: "... Foreign inflows to Brazil totaled $28.7-billion in 2009. In order to defend the US-dollar from spiraling lower, the BoB bought $24-billion...