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Hi Netters,
Iīve been watching commentaries about the melt down of Brazil
recently in this list. I would like to add to these my opinion.
Do not bet against Brazil. Brazil is very rich.
Speculators have already been severely punished during march
1995 and mildly so last october.
On march 1995, under the first severe attack, the Brazilian stock
market fell around 20% in one day. That morning, during the heat of
the attack, the Brazilian Central Bank devalued the currency
slightly, only to entice speculators to short sell the Real even
more.
When they did it enough, the Central
Bank rose the Real's quote and bought it all back making a
handsome profit for the country. The speculators were severely
battered then.
I guess this time the strategy will be different but the Brazilian
Central Bank has megatons of dollars to unload at anyone.
Brazil is not Russia! Brazilīs economic team is orders of
magnitude more competent. Brazil may not have nuclear weapons
but, on the other hand, the Brazilian financial weapons are infinitely
more strong than those of Russia.
Alfredo
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