Friday, April 3, 2009

Brazil Will Loan To the IMF

Just 6 years ago the IMF was loaning $30B to Brazil. Critics were adamantly stating that the loan was because Brazil was bankrupt and that the loan will never be repaid, that it should not happen because it was tax payers money, and so on.

Things do turn around. Brazil is now on talks with the IMF to loan it money - the other way around. President Lula, who spent part of his youth protesting on the streets against the IMF, is now boasting that he will enter the history books as the first Brazilian President to loan a few Reals (Brazilian currency) to the IMF.

However, the move will not put a dent on Brazil's impressive $202.6B in foreign reserves. It appears that there will be swap from US Treasuries into the IMF. Brazil has stated in the past that it would no longer buy US Treasuries because of the devaluation of the US currency and the printing of money by the US. Brazil is one of the largest holdders of US Treasuries. Perhaps they were trying to get rid of them and were persuaded into a swap instead?

At the G20, President Obama says Lula is the most popular politician on Earth, and it is because of his good looks: BBC video

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