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Thread: Jair Bolsonaro, aka 'Tropical Trump', has won the Brazilian Presidential election

  1. #31
    Quote Originally Posted by angelatc View Post
    https://twitter.com/AngelaTC/status/1056943291021881346
    'The Chicago Boys saved Chile, fixed Chile, fixed the mess,'
    Brazil’s new finance minister eyes Pinochet-style fix for economy
    http://archive.is/ZQFUY

    Paulo Guedes is targeting free market reforms similar to those of ‘Chicago boys’ in 1970s Chile


    If Mr Bolsonaro, represents for many voters an extreme but necessary solution to end the country’s long flirtation with the left,
    Mr Guedes is his counterpart in the world of economics and finance.


    Under Workers’ Party governments from 2002, Brazil’s public sector spent as much as a European social welfare state
    (without the same quality of services)
    ►Interest rates are among the highest in the world,
    ►public debt is soaring,
    ►corruption is endemic
    ►the economy is still struggling to emerge from years of recession.

    The Cuts

    Like the Pinochet plan, Guedes priority is to end Brazil’s 7% fiscal deficit through privatizations of the 147 state-owned enterprises.

    Guedes: “There are no sacred cows” (state-owned companies)

    Petrobras (state oil producer)
    Eletrobras (state electricity producer)
    Banco de Brasil (state lender)

    "Without those," warned Zeina Latif, chief economist at brokerage XP Investimentos, “talking about privatizations gets complicated”.
    Investors are far less interested in the smaller, less profitable companies.


    ►Guedes other plans include a radical simplification of Brazil’s convoluted tax system.
    ►The much-lauded reform to introduce a private pension system is already facing problems; retirees complaining payments are too small.

    The Challenge

    The challenge will be to convince Bolsonaro, who analysts believe is a nationalist at heart and has already ruled out the full sales of important state-owned companies.

    "Inevitable Friction" Bolsonaro v Guedes (both grumpy/irascible)

    Mr Guedes would retain one “powerful weapon” that he could use to impose his will: the right to resign.
    “He knows that the minute he resigns, markets will tank big time,”

    The hope will be that he fares better than Pinochet’s Chicago boys.
    While they shrank the fiscal deficit, liberalized trade and privatized state companies,
    they established a fixed exchange rate that went bust after the region’s debt crisis of 1982.
    (nine years later)

    =======

    see @Firestarter Paulo Guedes review above:
    http://www.ronpaulforums.com/showthr...=1#post6701828
    Last edited by goldenequity; 11-04-2018 at 07:26 AM.



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