30 votes

Brazil Erupting: Stagflation (Inflation UP/Growth DOWN)

I live in Rio de Janeiro
"For a long time we made fun of ourselves for being too apathetic, now the pride is returning to our hearts. Let's see whats going to happen." -- Submitted by Amick/DailyPaul
http://www.dailypaul.com/comment/3111599

About 20 minutes ago in Rio (11pm EST)


http://youtu.be/gStay0Imsiw

Gov't protests started (supposedly) from a 20cent bus fare increase.
I'd have to say.... thhhaat doesn't seem to cover it.

It's the economy stupid...
1. Wages were increased (by decree) to (try) and keep up with inflation (oops!)
2. Costs of production (therefore) increased.. (making products less competitive/more expensive)
3. This curtailed GDP growth as markets found better prices elsewhere.
4. Their central bank responded by suppressing interest rates (oops!)
5. This spurred 'temporary' growth by consumers using CREDIT (oops!)
6. The consumers are (now) maxed out... with 'disposable' income at an all time low (after debt servicing).
7. Govt lowered taxes (to their credit)... but it never took hold (enough) to prevent (this) tipping point after 5 quarters of stagflation.

Like the US... it will work... until it doesn't.

More here:
http://www.bloomberg.com/news/2013-05-29/brazil-s-economic-g...
http://www.businessinsider.com/5-key-charts-on-brazils-econo...

I'm sure there's 'other' social issues involved as well.
but when you're broke...
and outta money...
it ignites everything else in your life.
Doesn't it.
(sigh)

The crowd slogan "NO PARTIES!" demonstrates their loathing of political ineptitude stifling Good Governance... whether that means
1. Provide BETTER for us, or
2. Get out of our way
remains to be seen.

Perhaps some Brazilians here can comment further.
Cheers,
G.




Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

I live in Rio de Janeiro and

I live in Rio de Janeiro and I cant tell you a little bit of whats going on here. The bus fare increases around the country was only the excuse to build up the movement. We havent had anything remotely like this since maybe the last days of dictatorship. We have been apathetic before the government's corruption for almost 30 years.

Yes, we are a socialist country and this is a demand for better government services. But transportation companies, for example, are private although very entangled with government officials. Rio's mayor, Eduardo Paes, along with Governor Sergio Cabral (both from the same party) have made some blatantly fraudulent deals with bus companies' owners to create a sort of cartel, extend their area of operation and, at the same time, allow fares to increase at periodic rates. Governor Cabral was also involved in a major scandal with construction company DELTA, making illegal contracts for the state's infrastructure in order for both parties to profit. This was on public record but Cabral was heavily protected and nothing happened to him.

Maracana stadium's overhaul was initially estimated to cost 800 million reais (around 400 million dollars at the time) but the final cost skyrocketed to 1.2 billion, all using political tricks like "emergency costs", in which you don't have to call public tenders to ask for more money. We have truly criminals running our government right now. We have built a few other very expensive stadiums in places where there is very little demand for them, where the local teams draw little to no crowd.

The major grief among the population is that all this money was deviated into politician's hands while thousands of people suffer to get treated at public hospitals, equipments are rubbish etc.

Our public schools are totally out of the reality, with stupid low wages for teachers and very poor infrastructure. They do not prepare the students to enter the marketplace. In fact, the private sector often ridicules and refuses people coming from public education over somebody else.

These protests were/are surprinsingly fully spontaneous. All done through facebook and hearsay. At the streets, people shout "no violence" and "no parties". Everyone who tries to raise a political party flag gets booed out of it. Globo TV (our equivalent to Fox News) reporters also get booed and booted out of the crowd. It's been mostly pacific, despite a small troublesome group who always show up at the end to riot.

To sum up, every brazilian is astonished with whats going on here. The state of mind around here is of warmth, joy and union. We kind of feel close to each other and this is great. For a long time we made fun of ourselves for being too apathetic, now the pride is returning to our hearts. Let's see whats going to happen.

Thanks Amick! Como vai voce?

I have significant investment in your country and to tell you the truth it scares me. I truly hope a group or a leader emerges that can explain that it isn't better government that you need but LESS GOVERNMENT!

The reason you are experiencing problems isn't because of your leaders it's because of your belief in socialism. (Brasil's modern government was the result of a CIA coup. Look to Japan to see how well our modern ideas about democracy have fared. That's YOUR future too if you don't change course)

ALL government is FORCE. The less you have the more freedom you have. Whenever I visit there and talk freedom with my friends they listen but poo poo it because you guys just love your masters more than they deserve.

Please share widely on facebook and other social media what the Mises Institute is doing in Brasil...

http://www.mises.org.br/

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

Ira, I sympathize with

Ira,

I sympathize with libertarianism. I basically agree with everything about it. The problem is IMO, unlike the USA, Brazil is not ready, yet, to radically shrink the government.

We still have wide social inequality. There is no opportunity for poor people to climb up the social ladder by themselves, so it is a national consensus that these people need to be taken care of. Only it's been made in a totally wasteful way.

Instead of investing heavily in EDUCATION, RESEARCH and DEVELOPMENT our current governemnt chose to sent out checks to poor families so they dont starve, and nothing else.

IMHO, sending out checks is how Lula (the former mechanic

and now largest beef rancher in Brasil, how does that happen?) and Dilma got elected!

Fight the good fight!!!

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

Yeah, they pretty much got

Yeah, they pretty much got massive popular support because of their social handouts policy.

Back in 2002 Brazil was suffering the hangover from Fernando Henrique Cardoso's administration, which was portrayed as a bad because of its privatizations and the many bankruptcies that occured due to the shift in monetary policy.

In fact, his changes actually saved the country from the downward spiral of the late 80's and early 90's. The economy only needed to heal itself and be back to its feet, which started to occur when Lula took over. Then everybody thought the economic growth was due to Lula giving people checks to save them from starvation. His government actually missed the opportunity of a heated economy to invest at long terms.

Good analysis! So where is Lula da Silva now?

Good analysis! Cutting checks to the lower class "Created millions of new members of the Brazilian middle class," so chimed BBC a few years back. Two years later, it had to admit, "most of the checks are spent on consumer goods and not put into investments like small business or education."

The result of all this created money flying at high velocity through the economy is... ta da! Inflation.

So where is Lula da Silva now? Are there people calling for him to put his hands on the rudder of Brazil and right her course? Is he prohibited from higher office due to constitutional restraints?

"Cowards & idiots can come along for the ride but they gotta sit in the back seat!"

Hes in hiding with the rest of the criminal class

I hope Brazil does the right thing and moves toward free market solutions

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

Wow. Obrigado!

Thanks for the perspective!

Get your preps together! Learn historic food storage and preservation methods and the science that makes them work now, start saving money and the future

ditto!

Thank you.

This is Socialism

The reactions of the people is because they are demanding more. They demand more services and goods...for free. They demand that their taxes be used correctly, which is good but the reality is that the government is corrupt and will always be corrupt; that is a symptom of big government. The government will comply and the country will go further into debt, just like the good ol' USA.

DO NOT kid yourself, this is in no way a reaction of the people demanding that the government be smaller and freer. Brazilians are staunch socialists (I know because I lived half my life there) demanding that the government be their daddy and mommy in every aspect.

The 'finger'....

that you point is correct.

"maybe this will get a lot of them to realize that government is not the answer. "
and that same finger..
will be pointed at the U.S..
& for the same reasons
when OUR center will no longer hold.
Tick Tock.

I agree with you

but I think this particular issue revolves around a mismanaged government that has hooked their people on government provided services and then over-extends itself by hosting the World Cup as well as the summer Olympics. Doing merely one in the same decade would be challenging for most economies. So they divert all these funds and then ask for a transportation rate hike to cover additional expenses these events require and the people are fed up and deservedly so. If you and your wife were out of work and you both volunteered to put on a huge Christmas dinner for your extended family when you can barely pay the light bill, you can't be mad if the kids revolt.

The key is for the government to not be the parents of the citizens but the governments decisions regarding hosting these events have only made an already horrible situation into an absolute nightmare.

If anything, maybe this will get a lot of them to realize that government is not the answer.

BTW, I lived there as well for a bit. My wife is from just outside of Rio in Niteroi. We were married there in 2005 at a 200-yr old church near the beach.

Was just going to say this

But you beat me to it. It's sad that this is a "give us more stuff!" protest and not much of a "leave us alone!" protest.

They pay very high taxes

They pay very high taxes and get very poor services. The problem is corruption, maybe even worse than the corruption we have here.

Everyone loves to have their

Everyone loves to have their demands met. How else could corruption flourish?

Thanks Brigger. I love Brazil and the people but they

are hopelessly enslaved in the belief that government can and must be a force for good.

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

This sums it up best. It's because the government wants more

money for the World Cup and Olympics infrastructure build-out while at the same time they are not building out hospitals, schools and basic services for the people. They are instituting this raised transportation rate to get that money. People aren't happy.

https://www.facebook.com/photo.php?v=10152925263405315

It's hard...

to put the World Cup and 2016 Olympics build out on your credit card... when it's maxed out.

How do you say "let them eat cake"

In Portuguese?

I don't know much about

I don't know much about what's going on in Brazil, but FWIW, I lived in Venezuela for over a year. Bus fare was 500 Bolivares, or about 20-25 cents. Everyone uses the buses to get around. Very few people have cars, and there are buses all over that go to pretty much any place you'd want to go. Depending on where you are going, you may have to take 2 or 3 buses to get there. If that rate were to double overnight, it would be very difficult for the people, many of whom are barely scraping by, to afford. Again, I can't speak for Brazil, but I do understand how a 20 cent increase in bus prices could be a big deal. In the U.S., nobody would care about that, but it's an entirely different setup.

about 5.5 hrs ago--- from RT

04:52 GMT: Brazilian President Dilma Rousseff tries to defuse tensions in a televised speech by praising the protesters, saying that the demonstrations were legitimate and that the government was committed to social change.

05:00 GMT: Protests continue in Brazil, with 50,000 people flooding Cathedral Square and other main streets in Sao Paulo on Tuesday night. Many expressed their discontent with the entire government, chanting ''No parties!''

Pepper sprayed.... good God!!!

spontaneously staged?

The Revolution business
http://www.youtube.com/watch?v=lpXbA6yZY-8

Gene Sharp interview
http://reason.com/archives/2011/02/25/teaching-people-power#...

and

http://mises.org/journals/jls/20_3/20_3_2.pdf

If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy.
James Madison

Great links

Makes one wonder....

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

every narative that I have found has been

Every source I have found, has been deeming this a movement for more socialism.

Spontaneous order

Spontaneous order, also known as "self-organization", is the spontaneous emergence of order out of seeming chaos. It is a process found in physical, biological, and social networks, as well as economics, though the term "self-organization" is more often used for physical and biological processes, while "spontaneous order" is typically used to describe the emergence of various kinds of social orders from a combination of self-interested individuals who are not intentionally trying to create order through planning. The evolution of life on Earth, language, crystal structure, the Internet and a free market economy have all been proposed as examples of systems which evolved through spontaneous order.[1] Wikipedia

"Timid men prefer the calm of despotism to the tempestuous sea of liberty" TJ

The butterfly effect. The

The butterfly effect. The straw that broke the camels back.

I do prefer the Powell Doctrine myself;
Employ decisive and overwhelming force.

As normal, the Brazilian MSM downgrading the event!

The midia is talking about hundreds of thousands but it is Milions!

The media lies everywhere

They are not your friend!

"It is difficult to free fools from the chains they revere".
--Voltaire

It's hard not to be a menace to society when half the population is happy on their knees. - unknown

South American spring perhaps?

...or is it more Order Out of Chaos?