A Brazilian Bounce: Another Sign of Global Recovery [View article]
I imagine you are aware that Brazil has been one of the few economies that tackled inflation successfully, although you do not mention this basic and meaningful reality in your article.
After a couple of decades of runaway inflation, Brazil instituted Volckerian interest rates, in the 15%-25% range from the late 90's to the middle of 2006, and wrung out inflation, much like Volcker did in the US in the early 1980's. Brazil is now enjoying an era of prosperity as a result, much like we did after Volcker's bold action in the early 1980's.
I would not rush and extrapolate Brazil's booming economy as a sign that countries that have embraced asset inflation, whether the US, UK, or Europe, are about to recover as quickly. Their bubble still has to unwind.
A Brazilian Bounce: Another Sign of Global Recovery [View article]
After a couple of decades of runaway inflation, Brazil instituted Volckerian interest rates, in the 15%-25% range from the late 90's to the middle of 2006, and wrung out inflation, much like Volcker did in the US in the early 1980's. Brazil is now enjoying an era of prosperity as a result, much like we did after Volcker's bold action in the early 1980's.
I would not rush and extrapolate Brazil's booming economy as a sign that countries that have embraced asset inflation, whether the US, UK, or Europe, are about to recover as quickly. Their bubble still has to unwind.