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Saving a Nation with Fake Currency

Saving a Nation with Fake Currency

A look at Brazil's Economy: past, present, and future. Presented to the UT Dallas International Business courses.

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Marcelo Somers

October 24, 2013
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Transcript

  1. SAVING A NATION with FAKE CURRENCY Marcelo Somers @marcelosomers UT

    Dallas International Business
  2. Naveen Jindal

  3. THESYNDICATE My Career Path

  4. None
  5. User Experience

  6. why am i here?

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  8. that’s actually my cousin...

  9. SAVING A NATION with FAKE CURRENCY Marcelo Somers @marcelosomers UT

    Dallas International Business
  10. http://ds-lands.com/photo/cities/brasilia/02/ BRASILIA The perfect city

  11. http://www.skyscrapercity.com/showthread.php?p=82562728

  12. Although named as an UNESCO World Heritage Site in 1987,

    the city is notorious for its windswept emptiness and anti-pedestrian layout. “ ” – Davi Baldussi http://riotimesonline.com/brazil-news/rio-travel/brasilia-50-years-as-the-capital/
  13. $19.5 billion *2010 Dollars *

  14. http://www.nytimes.com/2008/12/28/weekinreview/28goodman.html?pagewanted=all

  15. Consumer Price Index 0 750 1500 2250 3000 1980 1982

    1984 1986 1988 1990 1992 1994 1996 1998 2000 http://www.indexmundi.com/brazil/inflation_rate_(consumer_prices).html Inflation in Brazil
  16. Inflation hit 80% per month

  17. Grocery Shopping was Hard… Eggs: Day 1 - $1.00 Day

    2 - $1.02 Day 30 - $2.00 Day 365 - $1,000
  18. There were advantages (if you had the money)

  19. Consumer Price Index 0 750 1500 2250 3000 1980 1982

    1984 1986 1988 1990 1992 1994 1996 1998 2000 http://www.indexmundi.com/brazil/inflation_rate_(consumer_prices).html Inflation in Brazil Huh?
  20. How NOT to fix inflation in 5 easy steps

  21. 1. New President comes in with a new plan. 2.

    President freezes prices and/or bank accounts. 3. President fails. 4. President gets voted out or impeached. 5. Repeat.
  22. You can’t centrally plan an economy! How ‘bout Those soviets?

    http://studentsforliberty.org/blog/2011/05/09/lest-we-forget-lessons-of-soviet-socialism-for-our-own-times/
  23. No matter how hard you try, Markets are Free

  24. You have to stabilize people's faith in money itself. People

    were the problem. People had to be tricked into thinking money had value when all signs told them that was absolutely not true. “ ” – Edmar Bacha http://www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil
  25. The URV (Unit of Real Value)

  26. The Real

  27. Modern Day Brazil

  28. http://www.tradingeconomics.com/brazil/gdp-per-capita

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  30. Bolsa Familia (family allowance)

  31. When a family earns less than 120 reais ($68) per

    head per month, mothers are paid a benefit of up to 95 reais on condition that their children go to school and take part in government vaccination programs. “ ” http://www.economist.com/node/10650663
  32. The number of Brazilians living in extreme poverty has fallen

    from 17 million in 2003 to 9 million six years later. Such households had an average income of less than $30 a month. “ ” http://www.npr.org/templates/story/story.php?storyId=139356455
  33. Brazil has everything to succeed

  34. In 2006, Petrobras found oil in an ultra-deep water oil

    field that some experts say could hold 50 billion barrels or more of high-quality crude, which if proven would make it the biggest discovery in the hemisphere since Mexico tapped its Cantarell field in 1976. “ ” http://online.wsj.com/news/articles/SB10001424052702303448104579149382470863524
  35. Growing Domestic Population

  36. Strengthening Middle Class

  37. Natural Resources

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  39. What could possibly go wrong?

  40. http://www.tradingeconomics.com/brazil/gdp-per-capita Hockey Sticks aren’t necessarily good

  41. Approximately 75 percent of GDP growth in Brazil over the

    past decade was due to the increase in the number of people working and only about 25 percent was attributable to productivity gains. “ ” – Boston Consulting Group https://www.bcgperspectives.com/content/articles/globalization_private_equity_brazil_facing_the_productivity_challenge/
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  43. All these people have been spending more than they have,

    creating an illusion of economic growth “ ” – Vera Remedi http://online.wsj.com/news/articles/SB10001424052702304795804579097412611960306
  44. The profile of Brazilian debt isn't as healthy as it

    is in countries like the U.S. A big chunk of U.S. borrowing is home loans, seen as healthier since home prices can rise. But Brazil's mortgage market is tiny. Brazil's consumer debt went largely to appliances and cars—items that lose value. “ ” http://online.wsj.com/news/articles/SB10001424052702304795804579097412611960306
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  46. After becoming president in 2011, Dilma Rousseff sought to stimulate

    growth by hiking public spending and the minimum wage, and forcing state-run banks to lend more. The resulting inflation was tackled not by raising interest rates but by cutting sales taxes and holding down the price of items with a big impact on the inflation index, including food, petrol and bus fares. “ ” http://www.economist.com/news/americas/21579048-feeble-growth-has-forced-change-course-governments-room-manoeuvre-more
  47. Hoping to prevent Brazil from cooling too much after the

    sizzling boom of the previous decade, Ms. Rousseff…pressured the central bank to reduce interest rates, fueling a credit spree among overstretched consumers who are now struggling to repay loans. “ ” http://www.nytimes.com/2015/09/11/world/americas/brazils-economic-crisis-intensifies-raising-pressure-on-president.html
  48. Our leaders wanted to find the formula to increase their

    power and remain in office, even if this meant intensifying mediocrity in an economy, “ ” http://www.nytimes.com/2015/09/11/world/americas/brazils-economic-crisis-intensifies-raising-pressure-on-president.html
  49. “My Better Home” Government stimulus to buy refrigerators, TVs, and

    appliances Seriously?
  50. Mrs. Rousseff said. "Fiscal responsibility is a basic principle of

    our vision for economic and social development." On the way home, Mrs. Rousseff stopped in Cuba, where she inadvertently signaled the opposite. The Brazilian government's development bank —known by its Portuguese initials BNDES—has dumped almost $700 million in subsidized credit into Cuba to finance the renovation of the Port of Mariel.
  51. http://technorati.com/lifestyle/article/oil-rig-explosion-off-the-coast/

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  53. An economic crisis is unleashing a withering national exploration of

    how Brazil squandered its hard-won success. “ ” http://www.nytimes.com/2015/09/11/world/americas/brazils-economic-crisis-intensifies-raising-pressure-on-president.html
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  55. Federal prosecutors are investigating a complicated scheme in which construction

    companies allegedly bribed Petrobras executives in return for contracts. These contracts were said to have been inflated in order for kickbacks to go to politicians and political parties. http://theconversation.com/how-the-massive-petrobras-corruption-scandal-is-upending-brazilian-politics-43939
  56. Operation Car Wash

  57. 11% Approval

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  66. Today

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  68. What’s Next for Brazil?

  69. Thank You!