Macro Economics Argumentative

The economy of Brazil is in the top ten largest economies along with the United States. It is the biggest in Latin America. Actually it is the seventh largest in the world. Brazil has used its newly found economic mechanism to syndicate its outcome in South America and show more of a role in the Global Businesses. The Obama Administration’s National Security Strategy recognizes Brazil as a developing center of effect, and greets the management of the country’s joint and global issues. The United States and Brazil associations mostly have been good in the recent years. But Brazil has other strengthening relations with neighboring countries and expanding ties with nontraditional partners in the South that’s developing. Some foreign policy disagreements have transpired but the United States and Brazil continues to engage on matters such as security, energy, trade, the human rights, and the environment. Brazil is the biggest economy in Latin America with a GDP of $2.4 Trillion.

Over the past decade, the country has appreciated average annual growth of 3.7%. This growth has been motivated by a bang in worldwide demand for its product exports and the increase in purchasing power of Brazil’s fast-growing middle class. The country has also been benefitted from a number of policy improvements that have reduced the increase and allowed Brazil to absorb better global blows like the fresh worldwide economic crisis. Brazil is a member of diverse economic organizations. Its trade partners sum in the hundreds, with about 60 percent exports, mostly manufactured or semi-manufactured goods. Brazil’s main trade partners in 2008 were: After contracting by 0.3% in 2009, the economy of Brazil quickly rebounded back with 7.5% development in 2010.

Members of Congress have showed a large interest in the United States and Brazil associations in current years and the shared ties are 2tflikely to remain on the schedule of the 113th Congress. At the end of 2009, the U.S. dollar was close to an eight year shortage against the real, having lost more than 33% of its value during 2009 alone. During the past 12 month era, the exchange rate of the U.S. dollar (USD) has diverse from a low of BRL R $1.5310 to in height of BRL $1.7790. During 2010, the United States dollar typically kept an everyday exchange rate between (BRL) R$1.70 and (BRL) R$1.80, occasionally reducing below the (BRL) R$1.70 level. However in 2011 it had so far been devastating to the dollar. Thru late July, 2011, the dollar dropped as little as R $1.5310, its lowest level since way before 2008 when the global financial crisis began. In April, 2010, the Brazilian Central Bank increased interest rate in the country, which took as its outcome the alliance of the real and the weakening of the dollar.

The real touched quarterly in height of 1.7205 in April 2010, two days after the Brazilian Central Bank raised up the benchmark interest rate 0.75 percentage point to 9.5 percent. Later at that time, the Brazilian Central Bank has raised the standard interest rate to 12.5% in an effort to curb inflation. Although some do not see the central Bank raising the00201interest rates again in 2011, there should be many who would think at least one more raise of 0.25% before the end of 2011 if increase continues. Thanks to the huge capital inflows due to the huge sale of Petro Bras’ shares, the Brazilian real has been on a tear as of late. Yet, it is not just the recent equity contribution that has been pushing the Brazilian currency; solid development, in-demand exports and moderating inflation levels over the past year have pushed many investors into the currency, which has surged by more than 40% against the dollar since the start of 2009.

In response, the Brazilian government has begun buying massive amounts of dollars- close to $1 billion a day– to help to stem the rising real tide. “We’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness,” said Guido Mantegna, Brazil’s finance minister underscoring just how widespread the fears are over an increasingly strong real and concerns over further weakness in the dollar. One ETF to keep an eye on here is BZF, which seeks to achieve total returns reflective of both the money market rates in Brazil available to the foreign investors and changes in value of the Brazilian Real relative to the U.S. dollar. The fund has rushed by close to 12% over the past 52 weeks and has posted gains of 7% over the last three months.