March 29, 2023

US banking crisis helps moneylender Campos Neto defeat Lula – Cesar Fonseca

BC’s policy proves to be completely dysfunctional by setting a very low inflation target that only helps the banks.

Roberto Campos Neto and Lula

Expectations that the US Federal Reserve (FED) will temporarily freeze interest rates in the US due to the US banking crisis as a result of the bankruptcy of Silicon Valley Bank (SVB) may favor President Lula’s fight. Against Banco Central Independiente (PCI) creditor Roberto Campos Neto, Brazilian public debt must abandon its suicidal neoliberal monetary policy of fighting inflation by raising interest rates at any cost while people starve to benefit speculators.

As happened in the 2008 crisis, the world turned to the FED after this Black Monday, which shook global markets, hoping to reduce high interest rates, confirming a change in the direction of the US economy facing a neoliberal monetary crisis. the planet The currency then went saltier and the world woke up to multilateralism, uniting US adversaries like China-Russia.

That year (and the current crisis deepens what happened), the Fed froze interest rates and renegotiated bonds, replacing old, bad debt with new ones, extending maturities by more than 30 years.

Otherwise, what Donald Trump predicted today will happen, namely a repeat of the 1929 crash. Biden will sign his electoral death warrant in 2024 because he will side with China in the dispute for global economic supremacy, deepening unemployment in America. .

Proceed after suggestions

According to the Wall Street Journal, the bankruptcy of a US bank with $175 billion in assets makes capitalism stand on its head. Naturally, Biden is rehearsing the transition because he is losing the battle to Putin. After all, all the American money poured into NATO to try to defeat Russia in Ukraine is going down the drain, allowing the American people to take to the streets to protest, deepening the country’s political divide.

Hope for Brazil

From a Brazilian perspective, this environment favors the central bank’s flexibility to change economic policy that does not allow the government to pursue a growth policy capable of overcoming unemployment and improving national living standards.

BC’s policy proves completely dysfunctional by setting a very low inflation target that only helps the banks get richer and richer, bringing them to present value with higher future interest rates and, in the long run, boosting the economy with insufficient demand. .

The result is hyperinflation and what the neoliberals are frantically insisting on doing, namely trying to balance the debt-to-GDP ratio, without ever achieving it, and the ice begins to dry up.

Therefore, the FED must freeze interest, and to avoid that, give a truce, a pause, an interim, insisting on higher interest, which drags down the public debt and throws even greater uncertainties into the domestic and international markets. Newspapers from Vancouver-Canada today highlighted that the Trudeau government is encouraging an emergency meeting with its economic team on an emergency basis.

A similar phenomenon occurs in Brazil.

For this reason, Lula, as a matter of urgency, must act like Trudeau: Planado-Form-Congress and call for a Federal Supreme Court meeting, because what is at stake from this week is the risk of a global implosion, while the Central Bank of Brazil is playing with fire, wanting to be independent of the people and bankers. Dependent, living outside of reality.

This article does not represent the opinion of Brazil 247 and is the responsibility of the author.

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