You are here

Brazil says it won't let U.S. 'melt the dollar'

Section: Daily Dispatches

By Robin Yapp
The Telegraph, London
Wednesday, January 5, 2011

http://www.telegraph.co.uk/finance/currency/8241635/Brazil-pledges-to-st...

SAO PAULO, Brazil -- Brazil has sounded a new note of warning in the international "currency war" by pledging not to allow the United States to "melt the dollar."

Guido Mantega, the Brazilian finance minister, raised the prospect of introducing greater controls on short-term flows of speculative capital into his country.

The Brazilian real has risen more than 35 percent against the dollar since early 2009, leading some economists to label it the most overvalued currency in the world.

There is widespread concern about the effects of a weaker dollar on the competitiveness of emerging markets, many of which have seen foreign investment send their currencies soaring.

... Dispatch continues below ...



ADVERTISEMENT

Opportunity in the gold coin market

Swiss America Trading Corp. alerts GATA supporters to an opportunistic area of the gold coin market. While the gold bullion market has been quite volatile lately and as of November 29 gold has risen only $7 per ounce over the last month, the MS64 $20 gold St. Gaudens coin has risen about 10 percent in the same time. The ratio between the price of these coins and the price of gold is rising. If you'd like to learn more about the ratio and $20 gold coins, Swiss America can e-mail you a three-year study of it as well as other information.

Swiss America also can provide a limited number of free copies of "Crashing the Dollar," a book written by Swiss America's president, Craig Smith.

For information about the ratio between the $20 gold pieces and the gold price and for a free copy of "Crashing The Dollar," please call Swiss America's Tim Murphy at 1-800-289-2646 X1041 or Fred Goldstein at X1033. Or e-mail them at trmurphy@swissamerica.com and figoldstein@swissamerica.com.


"We're not going to allow our American friends to melt the dollar," said Mr Mantega, who views the US government's move to pump $600 billion into its economy as an unfair attempt to help exports

"There are infinite measures that we can take. One of them is to manage the entry of speculative capital in the short-term."

His comments came after Chile's central bank announced a plan to buy $12 billion on international markets on Monday in an attempt to stem its own currency appreciation.

The Chilean peso has gained by more than 17 percent against the US dollar since June, fuelled by increases in the price of copper, which is Chile's biggest export.

It was Mr Mantega who coined the term "currency war" last year as he voiced concerns that Brazilian exports were being damaged. In October he tripled the tax on foreign investments in some bonds to 6 percent, a measure he said had since been "effective."

Brazil plans to make "considerable" cuts in government spending, which would help weaken the real and allow interest rates to be cut at some point from the current level of 10.75 percent.

The "currency war" has been of particular concern to Brazilian manufacturing companies, which have suffered due to booming demand for cheap imports from China, which has been accused of keeping its currency artificially weak.

* * *

Join GATA here:

Yukon Mining Investment e-Conference
Wednesday-Thursday, January 19-20, 2011

http://theyukonroom.com/yukon-eblast-static.html

Vancouver Resource Investment Conference
Vancouver Convention Centre West
Vancouver, British Columbia, Canada
Sunday-Monday, January 23-24, 2011

http://cambridgehouse3.com/conference-details/vancouver-resource-investm...

Cheviot Asset Management Sound Money Conference
Guildhall, London
Thursday, January 27, 2011

http://www.gata.org/files/CheviotSoundMoneyConferenceInvite.pdf

Phoenix Investment Conference and Silver Summit
Renaissance Glendale Hotel and Spa
Glendale, Arizona
Friday-Saturday, February 18-19, 2011

http://cambridgehouse3.com/conference-details/phoenix-investment-confere...

Support GATA by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

http://gata.org/node/wallstreetjournal

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

http://www.goldrush21.com/

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16



ADVERTISEMENT

Prophecy Drills 71.17 Metres of 0.52 percent NiEq
(0.310 percent Nickel 0.466 g/t PGMs +Au and 0.223 percent copper)
from surface at Wellgreen Project in the Yukon

Prophecy Resource Corp. (TSX-V: PCY) reports that it has received additional assays results from its 100-percent-owned Wellgreen PGM Ni-Cu property in the Yukon, Canada. Diamond drill holes WS10-179 to WS10-182 were drilled during the summer of 2010 by Northern Platinum (which merged with Prophecy on September 23, 2010). WS10-183 was drilled by Prophecy in October 2010. Highlights from the newly received assays include 71.17 metres from surface of 0.52 percent NiEq (0.310 percent nickel, 0.466 g/t PGMs + Au, and 0.233 percent copper) and ended in mineralization. For more drill highlights, please visit:

http://prophecyresource.com/news_2010_nov29.php