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

Tags: Marc Faber

The Wall Street Journal reports today that Brazil has risen by one level this year to the eight position in the list of fastest retail development growth emerging markets. The study lists 30 nations and take into account items as political and macroeconomic risk, market attractiveness, retail expansion,…

“Brazil continues to be the most attractive option for retailers internationally,” the study said. “With a larger population and the strongest economy in Latin America, the country should recover from recession more quickly.”

While in Belgium Carrefour is struggling for surival, it will open 70 new stores in Brazil thius year.  Wall Mart will open 100 new stores and local Pao de Acucar will open 100 new stores.
When you in Brazil you should really take the time to visit ba flagship store of Pao de Acucar.

Tags: retail

For the first time in history, the Brazilian intrest rate is lower than 10%, the Banco Central lowered the rate to 9,25%.
Only since 2005 has the intrest rate slowly been decreasing towards 15% and below.

For the first time a whole generation of people will be able to finance the acquisition of a home.  Caixa Economica lowered this week the intrest rate to tariffs between 8,2 and 11,5% per year in the context of the Sistema Financiero de Habitacoa (SFH), which allows people to finance their proper home at a maximum sales price of 500.000 R$.  This is a decrease of 10,58% compared to the rates of April.

Also Banco do Brasil lowered it’s intrest rate for real estate financing last week from 8,0% to 8,4%.   They finance upto 80 to 90% of the sales value.  Banco do Brasil also lifted the finance period from 300 months (25 years) to 360 months (30 years).  The minimal financing amount has been highered to 150.000 R$ and the maximum amount is now 450.000 for loans in the SFH program (1,5 million R$ in case of a normal bond).

Also interesting is that Brasil is now financing 10 billion US$ to the IMF  (see article below).

Tags: brazil intrest rate, selic

In 2004, when we entered Brazil, the unemployment rate was 11,5%.  In th US, the unemployment rate was 4,6%.
The lowest Brazilian unemployment rate was in December 2008, when it was 7,2%.  But Q4 is in Brazil typically a strong quarter and the Q4 2008 one was an exceptional one.  Since then, the Brazilian unemployment went 1,7% up to 8,9%.  The US lowest unemployment rate was 4,6% in 2007.  Since then it went up 4,8% to today’s 9,4%.

Graph from Globo:

Tags: unemployment

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