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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.

Marcelo Somers

October 24, 2013
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  1. SAVING A NATION
    with
    FAKE CURRENCY
    Marcelo Somers
    @marcelosomers
    UT Dallas International Business

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  2. Naveen Jindal

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  3. THESYNDICATE
    My Career Path

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  5. User Experience

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  6. why am i here?

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  8. that’s actually my cousin...

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

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

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

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  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/

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  13. $19.5 billion
    *2010 Dollars
    *

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

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  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

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  16. Inflation hit
    80%
    per month

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  17. Grocery Shopping was Hard…
    Eggs:
    Day 1 - $1.00
    Day 2 - $1.02
    Day 30 - $2.00
    Day 365 - $1,000

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  18. There were advantages
    (if you had the money)

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  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?

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  20. How NOT to
    fix inflation
    in 5 easy steps

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  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.

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  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/

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  23. No matter how
    hard you try,
    Markets
    are Free

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  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

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  25. The URV
    (Unit of Real Value)

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  26. The Real

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  27. Modern Day Brazil

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

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  30. Bolsa Familia
    (family allowance)

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  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

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  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

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  33. Brazil has
    everything to succeed

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  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

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  35. Growing Domestic
    Population

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  36. Strengthening
    Middle Class

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  37. Natural Resources

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  39. What could possibly
    go wrong?

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

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  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

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  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

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  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

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  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

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  49. “My Better Home”
    Government stimulus to buy
    refrigerators, TVs, and appliances
    Seriously?

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  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.

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  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

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  56. Operation Car Wash

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  57. 11%
    Approval

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  66. Today

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  68. What’s Next for Brazil?

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  69. Thank You!

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