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04-17-2012, 07:35 PM
yes, I can see the bubble bursting any time soon. The difference is that here the government is much more interventionist
(not the "auto-regulated" market philosophy like in the US under Bush , derivatives etc) and they also learned with the 2008 crisis.. but we are seeing an overpricing in the real state sector , thats for sure.
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04-17-2012, 08:10 PM
The dollar has made up a lot of loss ground against the Real in the last year. For a minute there I thought we'd be at 1:1.
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04-17-2012, 08:21 PM
Yeah me too Speakeasy. The lowest I got was 1.5 in June of 2008.
But I don't see the Brasilian economy slowing down, quite the contrary. With the 2014 WC, the 2016 Olympics not to mention the biggest oil reserves in the world just outside the shores of Brasil which are yet to be developped, I can see Brasil becoming a G5 within 10 years. It's already the 6th or 7th biggest economy in the world, ahead of the likes of France or the UK...
Let me ask you Amour, Mr. GM, Chocolatinha and other Brasileiros here: how is this new economical boom in Brasil improving your personal life and that of those around you? Do you see more personal opportunities for you than say a few years ago, in the era before Lula and before all this buzz going on about Brasil?
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04-17-2012, 09:43 PM
Keep in Mind that our government is artificially bringing the Real down (buying USD in the market every day) , in order to help the exports sector. Other wise the Dollar would be almost 1:1 right now.
VP , Honestly : Thankfully I am a white, middle-class guy so I didn't felt any changes in my life (and therefore I recognize that my life is very different from the poorest majority), on the contrary , my family always struggled to pay the bills etc and things are getting expensive everyday.
But I do see a change in the way Brazilians see themselves, and for a country who suffered decades of + 1000% inflation rates , dictatorship etc no one can deny that Brazil , since FHC presidency , following with Lula , has a functioning democracy , freedom of speech and a stable , capitalist economy. The job market is also better right now , specially for people on engineering.
But we are still far from being a "developed" country as a whole , the level of corruption , poverty and inequality stills outrageous , what we have is some pools of "first world" life in the middle of a huge , polarized and yes, racist country.
In that case it doesn't change much for the average guy if the country is the 5th , 4th or 3rd economy in the world.
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04-19-2012, 12:34 AM
The dollar has been going up quite fast in the last couple weeks, almost back up to R$2
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04-19-2012, 06:01 AM
There will be no bubble for the next +5 years. The MAJOR difference between real estate in Brazil & the real estate bubble in for example the US, is that in Brazil most people buy property to live in them-selfs. Not talking yet about the crisis in the US & Europe, where Brazil is growing rapidly.
Adding to this, most people (foreigners) tend to look to the real estate prices in Rio (Zona Sul) and Sao Paulo. These areas cater to the rich(er) part of populations & foreigners with money to invest/moving to Brazil. The prices in other areas went up quickly, but in pace with the growing economy.
And maybe the biggest power against a potential bubble lays here:
"Brazil has a hand of trump cards. Public debt is just 37pc of GDP. The central bank can slash rates - now 9.75pc - if need be. The country no longer owes debts in dollars. It holds $353bn (£223bn) in foreign reserves. It is an agrarian superpower in an era of scarce food supply."
When talking about Brazil as a super power & seeing this in daily life, I can say that from Rio to Sao Paulo to cities in the North such as Fortaleza, Brazilians now start to see them-selfs as an important player in the world where just 6-7 years ago every taxi driver told me I was crazy to go living in Brazil. Lower income people now have more opportunities as work conditions improved a lot.
If you have an engineering or IT degree in Brazil (as a Brazilian) nice income can be earned, way better then what can be made in Europe. If working is your thing of course.
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04-19-2012, 12:13 PM
Quote: (04-19-2012 06:01 AM)GiovanniRio Wrote:
And maybe the biggest power against a potential bubble lays here:
"Brazil has a hand of trump cards. Public debt is just 37pc of GDP. The central bank can slash rates - now 9.75pc - if need be. The country no longer owes debts in dollars. It holds $353bn (£223bn) in foreign reserves. It is an agrarian superpower in an era of scarce food supply."
If there is an asset bubble forming, in this case real-estate, the central bank would want to raise interest rates to quell the appreciation, not lower them. That quote is in reference to a response to a potential oncoming economic recession, in which case they would want to lower rates. As the quote points out, the country has capacity for much higher debt levels, so if interest rates are cut to stimulate the economy, that would likely only reinforce the real-estate bubble. Unfortunately, there's no panacea.
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04-19-2012, 11:46 PM
Giovonny is spot on , the North is growing at high rates , but development there is still incipient if you compare it to the Southern South states.
Nordeste is good to invest if you are looking for long,long-term returns.
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04-20-2012, 08:50 PM
VP, my life is getting more expensive and my pay check is not comming along.
Seriouslly.
Poor people are enjoying the time of their life more than average, since now we have more facilities to buy popular cars and houses.
Deixa que essa fase é passageira, amanhã será melhor você vai ver a cidade inteira seu samba saber de cor!
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04-22-2012, 03:46 PM
Wide credit (unsecured) availability has a tendency to make people think they're richer than they are.
Not good!