Conclusion

The Brazilian Economy is similiar to the United States Economy in its ambition for economic growth and its attempt to cut spending after the hard hitting recession. Although their is a trade imbalance within the country, Brazil's economic growth is estimated to grow 4% over the course of 2011-2012. This South American country is on the rise along with its number one trading partner, China. The United States needs to keep this country close if it wants to retain hegemony.

Rouseff Fiscal Restraint--Cut Spending and Reduce High Real Interest Rate

http://www.easybrazilinvesting.com/macroeconomics/82-world-bank-expects-brazilian-gdp-to-grow-44-in-2011-and-43-in-2012.html

http://blogs.ft.com/beyond-brics/2010/12/29/11-for-2011-will-brazils-government-tighten-fiscal-policy/

"First, Brazil clearly went through a particularly acute case of the “political business cycle”, the well documented tendency for governments to ramp up spending before elections. The recent increases in big spending, first justified as an anti-cyclical, “Keynesian” response to the 2008 crisis, continued unabated even with economic growth topping 7 per cent a year. Now with the election won, there is no electoral reason to keep spending growth at the current level. The second unrecognized reality is that this spending surge is already causing serious imbalances in the economy. This can already be seen in very tight labor markets, surging imports, and continued high inflation for non-tradable items.

...

Fiscal restraint is the key element of a new economic “model” for Brazil, and although changing fiscal policy is always slow and difficult, the incentives to do so now are great. As Rousseff knows, an economic crisis is the one sure way to lose political power."

Tony Volpon of Nomura

Brazil + China = BFFs?

http://blog.securities.com/2011/04/brazils-trade-with-china/

exports to China grew 47%

imports from China grew roughtly 38% (from 1999-2010)

Brazil has overtaken the United States as China's largest trading partner since 2009. China accounts for approxomately 15% of Brazil's trade flow.

Leading exports to China include: iron ore, soybeans, and crude oil. The iron ore export represents 43% of Brazil's total exports to China.

Some problems are evident between this trade relationship; a large portion of Brazil's imports from China are manufactured products, set at low costs, which affect Brazil's domestic manufacturing industries (that are now struggling to keep up with this competition).

A few tariffs on synthetic fibres imports from China have been put in place by the government and President Dilma Rousseff.

Banking System

http://coinmill.com/BRL_USD.html

The Brazilian Real is the currency in Brazil (BR, BRA).

Also known as Reals.

The symbol for BRL can be written R$.

The Brazilian Real is divided into 100 centavos.

1.61 BRL = 1.00 USD

Like the United States, Brazil's banking system has been technologized; however, Brazilian ATM's allow citizens the oppurtunity to pay any bill and print full account statements and blank checks.

Interest rates are very high in Brazil. For example, the interest rate for credit card balances hovers between 8% and 10+% per month and heaven help you if your payment is ever late (over 30 days) because the rate increases by an additional 50%.

http://www.brazil-help.com/bancos.htm