6 ms·

Brazilian here too. Although the URV maneuver did help psychologically, a lot of controlling the inflation had to do with the so-called "economic tripod" implem

• Semiapies 11y ago
  It's more attention-getting to portray it as "this one weird trick to stop inflation", sadly.
  • qnaal 11y ago
    FOUR DRINKING BUDDIES came up with this CRAZY, UNLIKELY PLAN to STOP INFLATION INSTANTLY!
    • franciscogarcia 11y ago
      FOUR DRINKING BUDDIES CAME UP WITH THIS CRAZY, UNLIKELY PLAN TO STOP INFLATION, YOU WON'T BELIEVE WHAT HAPPENED NEXT! I can see that in some social media clickbait site.
• alberich 11y ago
  The current government is just so bad? Come on, just look at SELIC during the second FHC government... the interest rates went sky high, the Real had a monstrous devaluation overnight (from R$ 1.32 to U$1 to R$2.16 to U$ 1). FHC sure helped to stabilize inflation rate, but he almost destroyed brazilian economy. His second government was nothing short of a disaster. SELIC history: https://www.bcb.gov.br/?COPOMJUROS https://www.bcb.gov.br/?COPOMJUROS
  • marcosdumay 11y ago
    Yes, the SELIC exploded and the Real was devalued overnight as soon as people realized that the party currently in power had chances to win an election. Disaster is what we are living through now. Can you get any example of hight inflation happening at the same time as hight interest rates on Brazil since the Real Plan? Or, can you get any other example of hight inflation at the same time as a decreasing GDP? Or can you get any failed coup from FHC times? FHC surely didn't do everything right. I have plenty of complaints. But to even compare his government to any of PT's is absurd.
    • alberich 11y ago
      Get your facts right. The devaluation happened in 1999, a time when thinking that Lula would win an election was actually a joke. If you go to BACEN you can look for yourself to get the historic data on inflation and SELIC interest rates. FHC was able to both have high interest rates, high inflation rate and a broken economy (or did you forget that brazil had to ask IMF for a huge money lend?)... I don't know what you mean by a coupe... but it is well known that FHC paid congress men to pass the law allowing him to be re-elected. Curiosly, now they think re-election is bad... go figure.
      • meira 11y ago
        alberich, these kids debating politics today don't like to take leverage of internet to understand what really happened in their country. And then they come here to HN to say bad things about Brazil looking for "liberals" support. Silly boys.
        • rbanffy 11y ago
          It's depressing enough to see it on Facebook. Here it's unbearable. HN should be preserved as a place people discuss using facts.
  • speeder 11y ago
    I am from Brazil, and although I don't like FHC party either, I remember even during the crisis of his second government, I didn't hear people blaming him all the time, I think because at the time it was understood because it had to do with the Asian crisis (the 1998 crisis affected Brazil badly), and because people still remembered how bad it was before him. Now replying your specific question: "The current government is just so bad?" Yes. Many of our numbers are the worst in 20+ years, without a solid external economy justification, our troubles are not because lack of exports or other serious effects caused by other countries that were unavoidable, but purely incompetence (or malice...) Brazil consumers have the lowest confidence in 22 years, our GDP will have the biggest decrease in 24 years, inflation is the highest since FHC fixed it 20 years ago, the income of people, even if you ignore the exchange rate and count only in absolute BRL numbers, is decreasing, and although unemployment is "low" according to the government, the actual number of employed people is low too* Also the president batantly lied at her campaign (she said she would not do lots of things she immediately did as soon she was re-"elected"), and lied about the energy situation. The energy situation lie: Because the lack of rains in Brazil (that seemly is linked to the lack of rains in California), we can't rely on Hidroelectric powerplants, but the distribution lines are not all done, meaning that brownouts in some areas are likely (and we even had a country-wide blackout this year, when in the hottest day for some time, the extra power draw from air conditioners made the power lines overload), the president made several discourses with lies about this, trying to hide the situation for her upcoming campaign, she ended forcing the government as whole to give lots of conflicting information about the power situation, as result lots of important business that rely on great amounts of electricity (for example several types of metallurgy, manufacturing, cement industry) to stop investments, this started to cause unemployment and other issues long before Petrobras problems came to light. Who in their right mind would invest in a country where you can't find reliable information about the infrastructure situation? And of course, we have Petrobras issues by itself (for example for some problems caused while the president was working for Petrobras and even signed documents that caused the issues, she just stated she didn't read the documents... so she is grossly incoptent, or a malicious liar) Of course, I might be biased, since my family has a personal bone to pick with the president (the president approved some stunts in 2013 and 2014 that led to several companies that work for the government get defaulted, my family in turn sold stuff for those companies, that defaulted us, saying they would pay us when the government paid them...) * Brazil copied US bullshit unemployment number: you are only "unemployed" if you have zero income, government handouts included, and is looking for work, if you gave up, or get money from the government, or has income, even if it is tiny and from an illegal source, you are not unemployed
• digi_owl 11y ago
  > - Negative primary deficit on the government budget balance; huh?
  • speeder 11y ago
    Primary deficit is how much debt is generated every year by a government, ignoring old debts repayments. If you primary deficit is positive, you need to borrow money even if all your creditors decided to pardon your old debts. Fernando Henrique Cardoso made a law that mayors, governors and president are criminably liable for reaching the end of their term with primary deficit (thus putting the next person in charge in trouble). Dilma Rouseff in 2014 had a primary deficit of positive 10 billion (meaning the government would need to borrow 10 billion more than usual). She circunvented this by pulling a ugly stunt on the congress (she sent a law to the congress, where the law said that some of government spenditure "don't count" toward the balance, then she threatened to not sign the bill that allow congressmen to spend some federal money to help their homebase unless the congress approved her law)
    • digi_owl 11y ago
      So it is a very complicated way to say that they ran the government at a surplus before debt payments?
      • speeder 11y ago
        Yep... The term the guy used is the english name for it, in portuguese we call it "surplus" and that is it :P So in short: Fernando Henrique in 1994 made a law where if you don't make a surplus before debt payments, you are a criminal (of the sort that get arrested) Dilma Rouseff not only made a deficit (instead of a surplus), she made a law to circunvent the previous law, also her law has the pecualiarity that the project that "don't count" in the debts are her party pet projects (the projects that they put on TV to ask for votes), a possible loophole in the law is that she can spend "infinite" money on her pet projects now.
        • 11y ago
• PhantomGremlin 11y ago
  Compare that to 0.8% in the US for 2014 Many of the things I buy in a grocery store in the USA go up 5% or 10% at a time, perhaps every year or two. Same situation with services. The official inflation numbers for the US are very tricky. There's a lot of "adjustment" going on. I suspect that the rapidly falling prices for household electronic goods plays a big role. The price of a 55" flat screen declining from (made up numbers) $1,500 to $500 in the last five years is small consolation if the price of meat and milk and cookies has gone up 25% over those five years.
  • gcb0 11y ago
    i've been buying the same items (specific diet craze) from the same whole foods from 2009 to today. my monthly cost on that alone jumped from $300ish to well into the $500. it's mostly organic produce, a few meats, lots of seafood (which i grant that it has a very volatile market price but still) So i'd say for quality quasi-essential products, it is even higher than that. probably because premium shops were keeping their profits a little lower because of the 2008-2010 crisis.
  • gusmd 11y ago
    That feeling you are describing happens everywhere. In the US, inflation is usually tracked by the CPI [0], which uses the average monthly price of a market basket [1]. The tricky thing is in finding the correct weights of each item in the basket as to be representative. As you can imagine, different people shop differently, so won't experience the same inflation. [0] http://en.wikipedia.org/wiki/United_States_Consumer_Price_Index http://en.wikipedia.org/wiki/United_States_Consumer_Price_In... [1] http://en.wikipedia.org/wiki/Market_basket http://en.wikipedia.org/wiki/Market_basket
  • tsotha 11y ago
    The "basket" they use for CPI calculation is a genuinely difficult problem, since what people buy changes over time. Electronics is a great illustration - if I included 40" televisions last year, should I compare the price of this year's 40" television to last year's, or should I compare the price of this year's 50" television to last year's 40" because that's what people are buying? Both ways are right and both ways are wrong, depending on what you want the number to mean. But even allowing for these difficulties, I still think the government keeps changing how inflation is calculated in an effort to make itself look better. When real estate increases dramatically they measure rents, which are (in a hot real estate market) subsidized by people trying to cash in on capital appreciation. In a declining real estate market with rising rents they switch to "rent equivalents" based in some part on the cost of real estate. You can hide pretty big increases by switching what you measure mid-stream, particularly if you just graph the YoY official inflation rate (including changes) without going back and recalculating every year using the same methodology. And then there's the reporting. The number you hear on the news may or may not include "the volatile food and energy sectors" depending on which is lower. There's a reason it seems prices are rising faster than the CPI reported on your drive home. They are rising faster.
• brc 11y ago
  Is there a general reason why, to an outsider, most South American currencies seem very unstable and periodically afflicted by very high inflation?
  • Sherlock 11y ago
    The "Original Sin" of not Governments not being able to get debt in the same currency they are able to collect taxes. So, when the main source of USD suffers in some sense (export prices, or some kind of supply shock) the Government (unable to get funds) must retort to fiscal policy to meet its commitments. And fiscal policy is the number #1 recipe to get (hyper-)inflation