Gyroscopic Investing

NPR's Planet Money recently did an interesting story on how Brazil kicked its
high inflation.

http://www.npr.org/blogs/money/2010/10/ ... ved-brazil

Bloomberg has Brazilian one year government bonds yielding 11.27%.

If an 11.27% yield on a one year note reflects current inflation, I would hate to have seen the inflation before they "kicked it." 

The cruzeiro currency went away and they are now on the Real after some other currency hiccups in between. When I was down there several years back inflation was well below 10% but I didn't think it would last.

The only way to fix currency problems and build trust is to issue money that can't be debased. Unfortunately for Brazil, they have a propensity for corruption and printing money much more than other countries.

I think some of this is relative.  Currently inflation in Brazil is running less than 5% and is not forecast to rise much above that.
http://www.bloomberg.com/news/2010-10-1 ... 4-92-.html

While this would be fairly rapid for the US, I don't think it is for Brazil.  The big problem with inflation is not necessarily the absolute rate, but rather whether it is rising or not. 

While one never knows what a future government will do, I was encouraged that Lula, the left-wing President during the past eight years, practiced moderate economic policies.  Maybe they can keep it going for a while.