Brazil Warns Of Luming World Trade War

Posted By on January 9, 2011

This is why Gold and Silver has been sought by the smart money!

Brazil has warned that the world is on course for a full-blown “trade war” as it stepped up its rhetoric against exchange rate manipulation.

Guido Mantega, finance minister, told the Financial Times that Brazil was preparing new measures to prevent further appreciation of its currency, the real, and would raise the issue of exchange-rate manipulation at the World Trade Organisation and other global bodies. He said the U.S. and China were among the worst offenders.

“This is a currency war that is turning into a trade war,” Mr Mantega said in his first exclusive interview since Dilma Rousseff, Brazil’s new president, took office on January 1. His comments follow interventions in currency markets by Brazil, Chile and Peru last week and recent sharp rises in the Australian dollar, the Swiss franc and other currencies amid an exodus of investment from the sluggish economies of the U.S. and Europe.

The actions have renewed interest in how to manage destabilising flows of speculative money, with the International Monetary Fund suggesting last week that the world needed rules to govern the use of capital controls.

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