Members Lucky Posted July 31, 2012 Members Share Posted July 31, 2012 The WSJ reports today that inflation in Brazil is once again becoming a scary thing. The government seems concerned about slow growth, but not inflation, which is rising. Food prices, normally stable in this time of year, are rising. The annual inflation rate, through mid-July, is 5.4%, and even higher for food, although no specific figure was given. Economists predict inflation at 5.5% for the next two years. Yet the rate for July alone was 6.67%. This, in an economy only growing 2% per year. Prices will undoubtedly rise for tourists, since we can afford it, right? http://online.wsj.com/article/SB10000872396390444405804577559463415529678.html Quote Link to comment Share on other sites More sharing options...
Members TampaYankee Posted July 31, 2012 Members Share Posted July 31, 2012 Prices will undoubtedly rise for tourists, since we can afford it, right? http://online.wsj.co...3415529678.html AAu contraire, if the Brazilian currency is losing value then foreign currencies are gaining value against it, all else being constant. Thus prices rise on the street but the conversion rate against the dollar rises too. Not only should the dollar buy more Brazilian money to make up for the inflation but if the dollar is seen as stable it will appreciate even more against the unstable Brazilian currency with the uncertainty of the future inflation rate. People, banks and business prefer a bird in the hand which is the dollar for the present. Quote Link to comment Share on other sites More sharing options...
Members Lucky Posted July 31, 2012 Author Members Share Posted July 31, 2012 That's certainly one theory. But my experience was that the dollar was not keeping up. To be fair, it has risen since I was there in March. Quote Link to comment Share on other sites More sharing options...
Members TampaYankee Posted July 31, 2012 Members Share Posted July 31, 2012 That's certainly one theory. But my experience was that the dollar was not keeping up. To be fair, it has risen since I was there in March. On the flip side, if the dollar is slipping as you hypothesize then it buys less and less against a stable Brazilian currency. If that slides too through inflation then the dollar will not be losing as much ground vs the Brazilian currnecy and the slide is mitigated. Either way, I do not see their inflation as catastrophe for Americans. What you do not want to be is a Brazilian farmer or worker or worse, jobless. Quote Link to comment Share on other sites More sharing options...
Members ihpguy Posted August 30, 2012 Members Share Posted August 30, 2012 Just anounced today that the minimum wage has been adjusted upward for the start of 2013 by 7.9% and the official increase in prices due to inflation has been stated as 4.5% Living here day to day, some prices have gone up, some have gone down. All various amounts. For example, to bumpr the economy a bit, the government has ended the IPE tax on domestic electrical products. Many electronics products have had price cuts. Ditto stoves, fridges, etc. As to the sauna boys, last week at 117, most wanted 70/80, the one I went with only wanted 60, two others I chatted up were at the 100level and my friend/roommate when with a longtime regular of his and got the standard price from five plus years ago of 50. Maybe I am like a broken record but they all are trying to get 50 Reais in their pockets as earnings after expenses for roundtrip travel and their discounted entry, so more or less 70.00. And instead of buying them an expensive plate of food and drink inside, you might decide to give them 5Reais for a couple salgadinhos and a refrigerante(the meat-filled, fried dough savories and a soda.) Quote Link to comment Share on other sites More sharing options...
