So tonight I had written a paper on Brasil. I was using the source of http://economia.estadao.com.br/noticias/economia,venda-de-carros-segue-em-ritmo-acelerado,not_60646,0.htm , to show a major indicator that the middle class in Brasil is growing, and it is just a good sign to follow. Some of the key points on Brasil areBrasilian Population - 194,438,000
Brasilian GDP - $1.57 Trillion US$
Brasilian CPI for 2011 - 6.04%
US$ 1 vs Brasilian Real R 1.628
Brasilian corporate tax rate 34% of net profits
a. 15% base tax
b. 10% surtax on annual income over $240,000
c. 9% for social contributions
Brasilian Total Tax Reciepts $1.4 Trillion
a. $448.7 Billion Federal Taxes
b. $157 Billion Social Security Contributions
c. $77 Billion other *
Brasilian Total Expenses $1.4 Trillion
a. 114.9 Billion to States and Municipalities
b. $130.8 Billion Payroll
c. $198.7 Billion Social Security
d. $34.4 Billion Unemployment and other welfare benefits
e. Export Subsidy
f. Other Mandatory expenses
Brasil GDP growth rate
2008 High 2.37% Low 1.18%
2009 High 1.67% Low -3.3% (due to storms causing Agricultural shortages)
2010 High 2.74% Low 1.2 %
2011 High .7% Low .4%This is currently headed up. Expected growth in 2011 is 2.2 %
Bond rates are at 12 % and above across the board.
Okay so what blew my mind was the exporter subsidy, spurring business's to produce and add to local growth. Bond rates staying good and with political stability it seems that Brasil is fairing through the storm. They seem to be growing through, at this point maintaining interest rates to slow the economy. The Central Bank is currently backing away from lowering the interest rate to stave off inflation. I just took an appreciation of the seeming investment and conservative approach towards budgeting. There are many similarities with the United States, yet they are making us look real bad. Some of our own companies are investing $15 Billion in the auto market was one piece of information, two of those companies are Ford, and Chevy. There investing in the job market, there are plenty of natural resources, and as demand grows, infrastructure continues to grow as well.
Got me to thinking about right here in my backyard. Our bonds are brutally low, and though buy backs are creating some momentum in the value of the currency we leave the elephant in the room of our monumental debt to continue to revolve. While we are loosing our attraction to the world and our Corporate tax rate isn't much farther off from Brasil, we still face archaic trade agreements with partners who neither reward us nor return interest. China manipulates it's currency and isn't disclosing there books today at the summit going on this morning. Why is our relationship with china causing us to slip further into debt while also providing inferior products? Why are we importing from countries products we can be producing here, and giving incentive to companies which contribute to this countries net exports. The solution seems that legislation on fair trade agreements, not free trade, which allow for balanced or positive net exports only. Creating something like a net exporter subsidy for US company owners who's exports contribute to US exports.
And some real education in the bond market for all citizens. Be a patriot invest in bonds. LOL
