Brazil, China talks on ditching dollar

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File photo shows Chinese Vice-President Xi Jinping (left) meeting with Brazilian President Lula da Silva

BEIJING (AFP) – Brazil’s president kicked off a day of meetings with Chinese leaders in Beijing Tuesday, during which analysts said he could broach a plan to ditch the US dollar in his nation’s trade with China.

Luiz Inacio Lula da Silva was due to meet with his Chinese counterpart Hu Jintao and other leaders in talks focused on boosting business with China and promoting closer cooperation to fight the global financial crisis.

But all eyes were on whether China and Brazil would come to an agreement on ditching the US dollar in their bilateral trade and replacing it with each nation’s currency — the yuan and the real.

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China overtakes the US as Brazil’s largest trading partner

China has become Brazil’s most-important trading partner, disrupting a relationship between the United States and the Latin country that stretches back to the 1930s.


Carnival celebrations in Rio de Janeiro, Brazil Photo: AFP/GETTY

Welber Barral, the Brazilian trade minister, said total trade between Brazil and China had amounted to $3.2bn (£2.14bn) in April, representing a near twelve-fold increase since 2001.

The sum was greater than the $2.8 billion of imports and exports to the US and represented the second consecutive month that China had topped the trade table.

“It is a historic moment,” he said, adding that he expected China to remain in pole position for the rest of the year because its economy is still growing healthily. “China is now a platinum account [for Brazil],” said Douglas Smith, a Latin American economist for Standard Chartered bank.

The US has been Brazil’s principal trading partner for nearly 80 years, but a sudden surge in Chinese demand for Brazilian iron ore in the first quarter of this year dislodged the Americans.

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Hundreds of Brazil’s eco-warriors at risk of assassination

  • Study marks 20 years since Mendes murder
  • Environmentalists divided over activist’s legacy

Twenty years after the killing of Chico Mendes, one of the world’s most prominent rainforest defenders, hundreds of human rights and environmental activists still face the threat of assassination in Brazil, a new study claims.

The report, compiled by Brazil’s Catholic Land Commission (CPT) and due to be released in full early next year, reveals that at least 260 people, among them a Catholic bishop, live under the threat of murder because of their fight against a coalition of loggers, farmers and cattle ranchers.

The list names Frei Henri des Rosiers, a French priest based in the Amazon town of Xinguara, as a particular target. Police are investigating claims he has a £14,000 price on his head because of his fight against slave labour. Also named are Maria José Dias da Costa, a union leader in the remote town of Rondon do Pará, and an Austrian bishop, Dom Erwin Krautler, who has been under 24-hour police guard for two years because of his battle against developers and child prostitution in his Amazonian diocese.

In February this year, Francisco da Silva, a 51-year-old leader of the landless movement in the Amazon, was killed with a single shot to the head. He had been named in a previous CPT report about rural leaders receiving death threats.

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U.S. Excluded by Latin American Summit as China, Russia Loom

Dec. 15 (Bloomberg) — Latin American and Caribbean leaders gathering in Brazil tomorrow will mark a historic occasion: a region-wide summit that excludes the United States.

Almost two centuries after President James Monroe declared Latin America a U.S. sphere of influence, the region is breaking away. From socialist-leaning Venezuela to market-friendly Brazil, governments are expanding military, economic and diplomatic ties with potential U.S. adversaries such as China, Russia and Iran.

“Monroe certainly would be rolling over in his grave,” says Julia Sweig, director of the Latin America program at the Council of Foreign Relations in Washington and author of the 2006 book “Friendly Fire: Losing Friends and Making Enemies in the Anti-American Century.”

The U.S., she says, “is no longer the exclusive go-to power in the region, especially in South America, where U.S. economic ties are much less important.”

Since November, Russian warships have engaged in joint naval exercises with Venezuela, the first in the Caribbean since the Cold War; Chinese President Hu Jintao signed a free-trade agreement with Peru; and Brazil invited Iranian President Mahmoud Ahmadinejad for a state visit.

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VIDEO: Brazil reels from flood damage

Nov 27 – President Lula flies over flooded area in southern Brazil where 100 have died and some 54,000 are homeless.

Six areas in Brazil’s southern state of Santa Catarina declared a state of emergency and as many as 100,000 people are still trapped after landslides and raging rivers washed out roads and cut power.

In Rio Bonito in the province of Rio de Janeiro ambulances rushed to a scene of a landslide while residents scrambled to dig through the mud, searching for survivors.

Houses and cars were buried under mudslides throughout the region, while trees and household items drifted through flooded streets.

Fri Nov 28, 2008 3:30am EST

Source: Reuters

Europe on the brink of currency crisis meltdown

The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM.

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.

The latest data from the Bank for International Settlements shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.

They account for three-quarters of the total $4.7 trillion £2.96 trillion) in cross-border bank loans to Eastern Europe, Latin America and emerging Asia extended during the global credit boom – a sum that vastly exceeds the scale of both the US sub-prime and Alt-A debacles.

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Latin America feels the pinch of global economic crisis


CASH CROP: Soybeans are harvested at a farm in Brazil. The record prices for soybeans and other commodities have fallen, spurring anxiety

Once confident that soaring demand would guarantee high prices for goods such as soybeans, beef and minerals, Argentina, Brazil and other countries are feeling the effects of tightening credit.

BUENOS AIRES — The abrupt end of the worldwide commodities boom has stunned Latin American nations that had bet the farm on the idea that raw materials were a ticket to boundless prosperity in the globalized economy.

A galloping sense of insecurity has replaced the swaggering confidence that insatiable demand would keep prices up for products such as soybeans, copper, wheat and coffee. But commodities have tumbled in value in the wake of the financial meltdown.

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Police clash with police in Brazil violence

Striking police officers were embroiled in a mass-melee with hundreds of their own colleagues in riot gear who policed their protest, amid bizarre scenes in the Brazilian city of Sao Paulo.

The clashes between state police and plainclothes investigators last night came after the demonstrators tried to break through a barrier protecting the state government palace. Officers fired shots, tear gas and shock bombs, and the scuffles broke out.

Critics will highlight the incident as another example of the chaotic and dysfunctional nature of policing in Brazil. Last year, the UN pointed out that very low salaries – over which officers are currently striking – encourage widespread corruption, with many police units forming their own vigilante groups, death squads and militias.

It also sharply criticised Brazilian police for major human rights violations, pointing out that many of the 694 deaths caused by officers between January and June 2007 in Rio were likely to have been extra-judicial killings.

Officers are also known to engage in gunfire with Rio’s heavily armed drug gangs. Innocent civilians are often caught in the crossfire.

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Financial crisis: Countries at risk of bankruptcy from Pakistan to Baltics

A string of countries face the risk of “going bust” as financial panic sweeps Asia, Eastern Europe, and Latin America, raising the spectre of a strategic crisis in some of the world’s most dangerous spots.

Nuclear-armed Pakistan is bleeding foreign reserves at an alarming rate leading to fears that it could default on its loans.

There are mounting fears that Ukraine, Kazakhstan, and Argentina could all now slide into a downward spiral towards bankruptcy, while western banks exposed to property bubble across Eastern Europe have seen their share price crushed.

The markets are pricing an 80pc risk that Ukraine will default, based on five-year credit default swaps (CDS) – an insurance policy on a country being able to pay its debts.

The country’s banking system has begun to break down after years of torrid credit growth; its steel mills are shutting as demand collapses; and the political crisis is going from bad to worse.

Read moreFinancial crisis: Countries at risk of bankruptcy from Pakistan to Baltics

Global Stocks Tumble: $2.5 Trillion Global Equities Erased

Credit Crisis Widens


Sam Farhood, left, and James Denaro work on the floor of the New York Stock Exchange prior to the Opening Bell in New York, on Oct. 6, 2008. Photographer: Andrew Harrer/Bloomberg News

Oct. 6 (Bloomberg) — Stocks tumbled around the world, the euro fell the most against the yen since its debut and oil dropped below $90 a barrel as the yearlong credit market seizure caused bank bailouts to spread. Government bonds rallied.

The Standard & Poor’s 500 Index retreated 5.9 percent, extending the worst weekly slump since 2001, as concern slower global growth will curb demand for commodities sent Alcoa Inc. and U.S. Steel Corp. down more than 7 percent. The MSCI Emerging Markets Index headed for its biggest loss in at least two decades and exchanges in Russia and Brazil halted trading. Europe’s Dow Jones Stoxx 600 Index had its steepest decline since 1987.

Today’s plunge erased about $2.5 trillion from global equities after the German government was forced to bail out Hypo Real Estate Holding AG, overshadowing the $700 billion U.S. Treasury plan to revive credit markets. The euro weakened 6 percent against the yen, the most since 1999.

Read moreGlobal Stocks Tumble: $2.5 Trillion Global Equities Erased