Corruption during Lula presidential regime?

All evidence shows that the government of ones most popular Brazilian presidents that Brazil has known  at this time Luiz Inacio Lula da Silva, which is seen as a “saver” and one of the most brilliant economists by Brazilian population, is presently in a corruption scandal. While he was in power as president he was able to lift 30 million people out of poverty in his country. They estimate that the growth average was 4% each year that he was in power which is very good. While he was in power his government seems to have been implicated in a corruption scandal that implicated his operatives giving bribes to legislatures so they would vote for him. This scandal exempted the president from taking part in such corruption but it is hard to believe that he did not know what was happening. This scandal blow out in 2005 when local media found out that his government was giving money to legislatures to have their vote. The Supreme Court estimates that millions of public dollars were used for this cause. It will be interesting to see if this will affect M. Luiz Inacio Lula da Silva if this one decides to run for the next presidential race. Will this affect the way people see him? And will his citizen be able to take a risk when they know that he did not look over the money that was spent will every dollars is important to have a good economy.

by Addley Moise

For more information read this article:

http://www.reuters.com/article/2012/10/09/brazil-lula-idUSL1E8L4FAV20121009?type=marketsNews

Government loosen their borrowing policy’s

On September 15 the Brazilian government announced that they would ease their rule so that banks will be able to lead to more individuals. The Government believes that in those rule change should help bank to lead money to each other and put an approximately 15 billion dollars in their economy to get it stimulate. This is great news for Brazilian companies and individuals because now they will be able to borrow to banks at a lower rate because there is more money available. They also announce that they would give tax break to companies. This announcement should stimulate the economy to recover from a year of almost no growth was register but no recession ether. This announcement should help the creation of jobs in the end of September and begging of October.

by Addley moise

Information taken from :

http://www.nasdaq.com/article/brazil-eases-reserve-requirements-to-help-spur-lending-economy-20120914-00759

Brazil is looking for more trade links to build a better economy

The Prime Minister of United Kingdom, David Cameron, went to Brazil on a trip to the America for several reasons like to be more known and to creates competitive economic. He got there also for a political approach to say the point of view of the UK on the US most popular TV show. He first stopped for his two days visit to Brazil, where he was waited by the Trade Minister of Brazil, Lord Green and by a 40-strong business delegation. He then joined the Brazil’s commercial capital Sao Poala (the most economic relevant city in the country) which was hold by the 40-strong business delegation. He also had a talk with president Dilma Rousseff during his time. M. Cameron was in Brazil to create good trade links and for economic reason, sine the country has one of the most emerging economic in the world at the moment. The Prime Minister believes that it is a good occasion to UK contractors to share the experiences gained with the 2012 London’s Olympics Games to create work in Rio. Therefore, if the Brazil creates good trade link with important country like United Kingdom, it will even more emerge from other and be an even more competitive country that has to offer more services.

http://www.independent.co.uk/news/uk/politics/david-cameron-visits-brazil-to-boost-trade-links-8181325.html

Alexis Poulin

IPEA’s Economists: “Brazil’s property bubble will burst when interest rates rise” and “it’s all the government’s fault”

A study done by IPEA (Institute of Applied Economic Research), a Brazilian government agency says that there real evidence from the microeconomic and the macroeconomic point that there is a property bubble in Brazil. The property bubbly was created by an inflation of 165% for Rio de Janeiro and 135% for Sao Paulo, instead of the 25% estimated from 2008 to 2012. This too high inflation causes many dysfunctions in the economic system that will be soon departed through the whole economy of Brazil causing the bubbly burst. This is all because Brazilian government adapted an inflationary policy. It results to increase the cost of living, but this leads to a global interest rate at a record minimum level and this means that rates will inevitably increase, sooner or later. Then the research says that the true cost associated with the current tax will at that point appear leaving Brazil in an economic crisis. We could compare this financial crisis to the one that United Stated are in, but started in 2007-2008 due to too much credit for houses and apartment which results to an higher price of these. On the other hand, for the Brazilian Government it is a different situation than them because they don’t export as much as USA. Finally, once the property bubble will explodes it will leave the Government under hard circumstances. However we all know that they will still have the last word over the Brazilian population, leaving them with a fix for the problem they created by themselves because of a misjudgment of the budget of the nation.

Here is how they define their study:

“This article verifies the occurrence of a real estate bubble in the Brazilian economy. Overall, our results suggest the existence of a bubble in the real estate sector of the economy. The Austrian School of economics provides a solid explanation to this phenomenon, which are reinforced by statistical techniques, suggesting the Federal government, with equivocate fiscal and monetary policy, as the main responsible for the creation of this problem.”

Blog from; Posted September 18th

http://brazilianbubble.com/ipeas-economists-brazils-property-bubble-will-burst-with-the-rise-in-interest-rates-and-its-all-the-governments-fault/?utm_source=rss&utm_medium=rss&utm_campaign=ipeas-economists-brazils-property-bubble-will-burst-with-the-rise-in-interest-rates-and-its-all-the-governments-fault

Alexis Poulin