The annual inflation rate is expected to be as high as 3000%!

Seeing that Cerso said this number very calmly, Tang Bao felt speechless for a while, maybe as he himself said, he had long been accustomed to hyperinflation, even in the face of such a sensational figure, he could be calm.

Inflation seems to have become a symbol of the Brazilian economy, and it has become more profound over time.

One thing is very interesting.

Brazil once had a military coup d'état due to fierce political factional infighting, which started a 20-year military dictatorship, and all freedoms were severely restricted, but during this time, Brazil's economy achieved explosive take-off, becoming one of the countries with the fastest economic development in the world, creating a Brazilian economic miracle that attracted worldwide attention. By the end of military rule in '85, the democratic-democratic government came to power, vowing to lead the country to stability and prosperity, but then Brazil's inflation rate soared like a wild horse, soaring at a triple- or even quadruple-digit rate almost every year. This began a decade-long nightmare of inflation, which was not curbed until Cardoso's successful implementation of the Real Plan in '94.

The period of military rule created an economic miracle in Brazil, and even if it was trapped in the international oil crisis in the latter part of the reign, it was still quite restrained, but since the democratic-sovereign government came to power, Brazil's money printing machine has not stopped at all, and the so-called national prosperity is to constantly print money.

I have to say, this is really a great irony!

The reason why Tang Bao wanted to understand inflation when he first arrived in Brazil was that he remembered that Brazil had such a crazy history of hyperinflation, and the other point was that he also highlighted it in the information he collected. Such hyperinflation devours wealth almost every minute and every second. If he doesn't plan well, he is afraid that the money he invested will be swallowed up overnight.

Of course.

Even if there were some investment losses in the early stage, Tang didn't bother to care. Because he cares about long-term investment results, he wants to look at the long-term layout.

"Mr. Cerso, looking at your serious expression, it seems that you are very reluctant to see me invest in Brazil?" Tang Bao asked with a smile.

"Uh."

Seerso was stunned for a moment, then explained with a wry smile, "This is not something I am willing to do. Since I'm acting as your local guide. Naturally, you need to explain to you what you know and what you think, so as not to cause misunderstandings. In fact, many foreign companies have withdrawn from Brazil due to the uncertainty risk of inflation......"

"Is it common for businesses in Brazil to lose money?" Tang Bao asked.

"That's not true, even if the inflation is bad, as long as the price increase rate of the merchant can keep up with and exceed the speed of inflation, it can still be profitable. As you have seen just now, almost all the price tags of goods in supermarkets and shopping malls are stacked layer after layer, under this hyperinflation. The only thing merchants have to do is to speed up the price increase to avoid losses. As long as you make sure that it rises fast and high enough, you can still make money. Cerso explained with a smile, and then, with a change of tone, added, "But the price of some items is regulated, and if you want to increase the price, you must negotiate with the government in advance, and you can only increase the price if you are allowed to do so." ”

Well.

Tang Bao can also understand this. The prices of some commodities that have a bearing on the people's livelihood and social stability are certainly subject to price control. Especially at a critical time when hyperinflation is high. If prices are allowed to skyrocket, it will only make inflation worse.

"Actually, there's one kind of investment that doesn't have any risk...... "Seersso mused.

"Oh?"

Tang Bao was stunned, he was very surprised, not to mention Brazil, where inflation is still high, even if it is placed in other developed countries. I can't guarantee that the investment is risk-free.

"That's Brazilian fixed-income securities, especially dollar bonds issued by the federal and state governments. Brazil has just received a loan from the International Monetary Fund (IMF) to complete its debt rescheduling, and the risk of defaulting on its debt is extremely low. Moreover, interest rates in Brazil are much higher than those in the international market, and foreign investors are exempt from capital gains tax. Bonds denominated in foreign currencies do not require concern about inflation in Brazil. This, combined with significant interest rate differentials and tax exemptions, has made Brazilian fixed-income securities very popular, and in fact, the vast majority of foreign capital is now pouring into Brazil. Serso explained.

Tang Bao glanced at Seersso in surprise, he thought that Seersso was just a traditional businessman, but he didn't expect to know so much about financial bonds.

I really didn't see it!

"Hey, people in China can only invest in Cruzeiro-denominated bonds, but they can bypass these restrictions by simply handing over their money to foreign investment funds that invest in Brazilian fixed-income bonds. That's how I preserve the value of my assets, so I know so clearly. Serso explained with a smile.

No wonder.

But it's right to think about it, how can Cezo, who is considered the upper class in Brazil, sit back and watch his wealth be swallowed up by hyperinflation.

"Brazil defaulted on its debt last year, so don't you worry about it happening again? If you can invest abroad, why bother with Brazilian bonds? Wouldn't it be better to invest in safer bonds in Europe and the United States? Tang Bao asked with a smile.

"I can't understand those dazzling financial products, and whether they lose or make money at that time is up to the fund. Besides, I have lived in Brazil for many years, so how can I always pay attention to it? It's better to focus directly on Brazilian bonds where I can get information quickly, and with a much higher yield. "Seyer Cableway.

Well.

Tang Bao nodded secretly, it was not wrong for Seersao to have this idea, after all, it was easier to grasp the direction of what he was familiar with.

Fixed income bonds are a good fit for Cyersso. However, it may not be suitable for Tang, or rather, Tang Bao may not be able to see this cake.

Let's be honest.

Tang Bao came to Brazil this time because of mineral resources, and he was not interested in other investments. Although Brazil's fixed-income bond investment can get more lucrative investment returns in similar products, with Tang Bao's ability, if he wants to make money in the field of financial capital, he can find better opportunities, and he does not have to put it on Brazilian fixed-income bonds at all.

"Mr. Cerso, I'm more interested in investing in real companies than in fixed income securities." Tang Bao said with a smile.

Fixed income securities, not his thing!

……

"Mr. Tang, you are really different." Seerso was stunned for a moment and said. Foreign companies have withdrawn from their physical investments in Brazil, but Tang Bao is heading against the wind, which has to be said to make it difficult for him to understand.

Then.

Tang Bao asked directly, "Well, to be exact, I want to invest in Brazil's iron ore resources, but the Brazilian government seems to have just approved the entry of foreign capital in this area, and I don't know what kind of trouble I will encounter." Also, the Brazilian government is privatizing state-owned enterprises, and I would like to participate. ”

"Investing in iron ore projects? I don't know much about this policy, but before that, companies in the United States, Germany, Japan and other countries have invested in it, so I don't think it will be banned. Serso replied, somewhat uncertain. However, as far as I know, you are engaged in financial investment, how could you suddenly think of investing in iron ore, this field requires long-term investment, and it is difficult to get returns in the short term. ”

"Hehe, it's because there is no relevant investment that I want to enter. I have been in the virtual financial field for too long and want to expand into the real economy. Finance is very profitable, but it is a bit illusory, there is a big bubble, and the stocks and bonds owned are a string of numbers, and after a violent fluctuation, maybe this number will be instantly cleared to zero, or even become negative. It's like a virtual game...... And these tangible assets are different, no matter how the outside world changes, it will not erase its value! Tang Bao explained falsely and falsely.

Oh.

Seersso nodded knowingly. "Oh, by the way, it is easy to participate in the privatization of state-owned enterprises, because privatization is carried out through auctions, except for medical care, fisheries, pension funds, nuclear energy development, national defense and military industry, news media, telecommunications networks, aerospace and other fields, everything else can participate in the auction, as long as the price is reasonable. However, I would recommend that you find a consulting service to assist you before bidding. (To be continued......)