US post-2008 monetary policy deindustrialized Brazil while inflating its currency

Evidence

After the 2008 financial crisis, the United States government failed to construct a fiscal response (for example, boosting the economy by spending money on things like infrastructure and public services) and instead relied on the Federal Reserve to slash its rates to historic lows. This unleashed a wave of capital into the world (and especially into the tech sector) seeking returns. When it came to Brazil, the “carry trade” strategy—simply take out money with low interest rates and put it in a place with high ones—served to inflate the value of the real. This made it a bit cheaper for normal people to buy foreign goods or travel abroad for the first time; it also meant the deindustrialization of the economy, and it allowed Brazil to become the world’s sixth-largest economy. — Vincent Bevins, If We Burn, 314

Categorization

• QUESTION: Worth chasing: how much did carry-trade-driven deindustrialization fuel the resentment that later exploded in 2013 and brought Bolsonaro?
• XREF: connects to: Brazilians punished Dilma for protests whose causes lay outside her power — Vincent Bevins, If We Burn: The Mass Protest Decade and…, 460; Dollar-denominated debt is bankrupting the Global South during the Great Inflation — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 626; Currency issuance is inseparable from national sovereignty (+2 more)

Broader Connections

• Dollar-denominated debt is bankrupting the Global South during the Great Inflation #exemplifies (0.80) — Yanis Varoufakis, Technofeudalism, 626
• Currency issuance is inseparable from national sovereignty #expands (0.72)