Marc Faber, the author of Gloomboomdoom on Brazil in his report of July 1st:

Tags: Marc Faber

I’ve written previously on the risk of serious currency chaos coming our way in 2010.

My view on things:
1. I agree with Jim Roger’s that the USD will go the Pound Sterling’s way.  Crazy inflation is coming and the gigantic debts which the US government will have to sell; I rather short bonds than stocks.
2. The Brazilian Real will be a safe haven towards the USD, yet the Brazilians will try to do everyting to prevent their currency from a crazy appreciation against the USD, and they are right to do so.
3. Rather buy agriculture instead of gold or silver to protect yourselve against inflation.  “You need to put your money in countries that produce natural resources.  Many of those natural resource economies will boom; Brazil is going to be a better place to be then Belgium.  I am wildly bullish on commodities.”

4. The South African Rand will crash, heavily.  Zuma promises 4 million new jobs by 2014, which immediately puts pressure on the Rand.  Zuma even promises 500.000 new jobs by the end of 2009; all South African sources agree this is wildly unrealistic.  As to the World Cup in 2010: “The government appears to hope that the 2010 World Cup soccer tournament will generate a demand for goods and services justifying public investment. Here again, the track record is murky. Historically cities hosting the Olympic Games have experienced inflated housing prices, a loss of jobs and high debt levels”.

Tags: currency crisis

On April 2009, Standard & Poor’s, Fitch Ratings and the Canadian DBRS included Brazil in the category of countries which are “investment grade”.
Now also Moodys is giving Brazil the status “Investment Grade”.

At the same time, The economist reports about a Brazilian rating agency in Sao Paulo, SR rating, which is rating down the US from “AAA” to “AA”.

Tags: brazil in investment grade

Bespoke investments plotted the below graph of the stock indexes of the BRIC countries versus the S&P  500.
China and Brazil both never dipped negative and yield respectively 44,6% and 39,7% returns until today. S&P 500 rarely went positive and yielded nothing (0,22%) since January 2009.

Tags: BRIC countries, MSCI Brazil

Since October 2007, world market cap fell from 62,45 trillion US$ tot 25,5 trillion in March.

Bespoke investments made a interesting remark Interestingly, the BRIC countries (Brazil, Russia, India, China) account for 13.53% of world market cap, while the UK, France, and Germany account for 13.37%.  Maybe it’s time for the BRICs to no longer be considered emerging markets.

The market cap of Brazil is now 2,42% of the world market cap, how long will it take Brazil to surpass Germany’s 2,82% Market Cap?

Today the Bel20 fell with -0,45% while the Brazilian MSCI Brazil index rose 2,85%.  Since March 2009 MSCI Brazil yielded us a  +42% return.

Tags: MSCI Brazil