Real to Dollar Exchange Rate
When I first went to Brazil the exchange rate was 3 reals per 1 US Dollar. Over time the dollar had decayed to the 1.5 to 1 level. I checked the exchange rate yesterday thinking that the rate might give some indications of the future. I was shocked to find out that the dollar was slightly north of 2 : 1 yesterday. Today it is 2.2 :1. Very strange indeed. What could the possible reasons be?
- stealth investors have their money outside the country and there is a panic ?
- gov't trying to stimulate economy ?
- commodities cratering ?
This sort of gyration makes it so it is impossible to plan new business and very very difficult to maintain old business.
The rate of fall of the graph is nothing short of harrowing.
Because Brazil is also running its printing presses full tilt and the "thick as thieves" rapport between Child President Obama and President for Life Lula of Brazil I am adding a chart of dollar versus Euro to better track what B.O. is doing to the dollar:
Baltic Dry Index provides a proxy for world trade levels
Note: May 24, 2010
LIBOR = London interbank offered rate
According to Spengler if LIBOR hits the 2 year US Government bonds rate they are going to get hit badly. Quoting Spengler:
- If LIBOR continues to creep up and reaches, say, 75 bps, it no longer will be economical for banks to own US 2-year notes. In that case the US Treasury market will be in trouble. That’s when you head for the bomb shelter.
- Short 2 year notes
Leading, Coincident and Lagging indicators added on 6-13-2010. Obama is begging for emergency aid for state and local governments. Meanwhile NY State tries to keep their corner of the Ponzi scheme circulating by allowing municipalities to Borrow from Pension Fund to make Required Pension Fund Contributions.
Look for the whole thing to collapse badly when we slide back into recession in late 2010 or early 2011.
May 21st, 2009 at 7:38 pm
Good graphs showing how much the commercial world pays (in random currency movement) because governments can’t get their act together.
Lula FM is actually given great credit for paying back most of Brazial world debt, maintaining a big Trade Surplus (27B/yr as Apr’09) & supporting tha Real.
But currency traders have long memories…when Bra devalued the cureizo essentially to 0 in ’93 that’s IT! my CTA still won’t let me trade R/$.
Useful tip for the nite? S&P says they’re looking to devalue GRP’s AAA National Bonds! Sell GRB/CHF???
August 9th, 2009 at 4:47 am
Obama is killing the dollar with his mega-big treasury auctions as of this date of comment. The american empire is in decline and we have a barbarian as emperor.
May 6th, 2010 at 1:29 pm
Poor Poor world. It is May, 2010 and the dow dropped 1000 points today. The world is paniced and so it buys US dollars. If only they knew how rotten our system has become. They would run away. Dollar up from 1.80 to 1.87 today against the Brazillian Real.
May 10th, 2010 at 10:16 am
bailout pumped the market up 400 points today. Ponzi scheme extended and made worse when it craps out!
May 16th, 2010 at 4:25 pm
Euro down again in spite of bailout for Greece. Talk is of the eurozone breaking up. That would be my bet.
May 24th, 2010 at 9:58 pm
LIBOR time bomb note added. See LIBOR graph above.