> The only reason why this "worked" was because following the plan imposed by foreign investors (i.e. the IMF) meant that they could secure foreign currency. W

> The only reason why this "worked" was because following the plan imposed by foreign investors (i.e. the IMF) meant that they could secure foreign currency. Well, yes, that was the idea. > This still meant that they were basically swapping hyperinflation for racking up a huge external debt instead, and they were essentially more dependent upon foreign investors. The fact that this 'worked' and didn't lead to disaster was probably due to the fact that oil prices kept creeping up. Currency pegging was used in Venezuela too and that story ended in disaster. An external debt that was payable and negotiable. And that we were able to pay successfully (though now we have a large internal debt). In any case, having an external debt is not the end of the world. How many countries do it? > Currency pegging was used in Venezuela too and that story ended in disaster Right. That was the reason of Venezuela's disaster... > In terms of poverty reduction, Lula's Bolsa Familia program was more effective than this at actually helping people, but foreign investors love the story about how "Brazil was made safe again for foreign investors". Do you have any idea how destructive inflation is to a poor household? I'm sorry, this is ridiculous. And what does Bolsa Família - a program that was actually a merge of several programs from FHC's previous administration, modeled by Ricardo Paes de Barros around Friedman's negative income tax - have to do with this?