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Fiat Currencies Assaulted by Brazil!
History was truly made last week. In a historic speech given by Guido Mantega, the Brazilian Finance Minister declared a new “currency war” to battle the overactive printing presses around the world.
In full Mantega stated, “Brazil has declared a fresh “currency war” on the US and Europe, extending a tax on foreign borrowings and threatening further capital controls in an effort to protect the country’s struggling manufacturers.”
During times of recession, many countries attempt to devalue their currency in the short-term in order to give them a short-term advantage when competing against international markets. Brazil is one of the first governments outside of several middle-eastern countries to denounce the United States and Europe for their extravagant inflationary policies. It is important to note that it is a crisis of confidence that will eventually put an end to the inflationary policies of the United States, Europe, and several other major nations. This crisis of confidence will first start outside the United States and then finally after most of the world has lost confidence in the country’s currency then that same confidence crisis will be transferred to the country itself. Therefore, the significance of the denunciation of the United States and Europe by Brazil cannot be underestimated.
