brazil 2

On January 12, 1999, over a billion dollars fled Brazil. Three days later, the Central Bank attempted to bring about a limited devaluation of the Brazilian currency, the real, but it failed to prevent a free fall. Over the next two days, another $3 billion was pulled out, and by the end of the month, the real had lost over 40 percent of its value. The Central Bank president resigned, his successor lasted a week, and as speculative attacks …

…Arminio Fraga, now Brazil's Central Bank president, to whom the country's economic policy has been largely ceded, will have his hands full. So too will the "Three Marketeers" if Brazil fails to convince skittish investors that it is back on track, if it is forced to resort to capital controls, or even defaults, as the year progresses, and Western taxpayers eventually wake up to the way their taxes have been gambled on a mission impossible.