For the love of money

I got this from Francis L Holland's blog he lives in Brazil:

Now, I know something bizarre and perhaps unprecedented is going on in the credit markets. When I arrived in Brazil four years ago, one dollar could be traded for three Brazilian Reais, more or less. By just a little earlier this year, the rate had fallen to only approximately 1.5 Brazilian Reais to the dollar, basically meaning that the dollar had lost half its worth against the Brazilian Real.

Now, the dollar is trading one third higher than it was just a couple of weeks ago, which is not good news for everyone. For example, for Brazilians the price of a week in Florida just increased by a third, because they have to pay a third more to buy the dollars they'll spend when they're in the United States.

So, what's causing the value of the dollar to increase, even as our economy is in a free fall? According to what I've been reading, many American banks are basically illiquid (bankrupt) and can't pay their own depositors back. Whachovia is an example.


Remember when people call Brazil and other countries Third World Countries, America welcome to the Third World.