I made a bet with my wife four years ago after the Brazilian president election. The bet, that the dollar ($) would change in relation to the brasilian Real (R$). Compared to for years ago the value has gone down.
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But why?
This is my theory. Very simplistic. I’m no economist.
Brazil has two elections to choose two candidates for the final election. This year to candidates chosen in the runoff and one candidate, Flavio Bolsinario, is a friend to business and economic growth. The other candidate, Lula da Silva, is more antagonistic toward business.
During the runoff election that would choose the two main candidates for the final election, Mr. Bolsinario, won that election in a landslide over all the other candidates. So most of the businesses in Brazil were starting to get very happy that there would be more favorable business conditions, and the Brazilian stock market began to increase, and the money began to gain more value.
Fast-forward to the final election. It did not happen as most of the businesses were expecting and people after the election pulled their money out of Brazilian businesses and the stock markets. The election was won by Mr./President Lula da Silva. That made lots of businesses in people nervous so they pulled money out of the Brazilian stock market and did not want to do business in Brazil. And thus the value of the money declined rapidly.
For the most part, I don’t have an opinion about who is the president of any given country, but I will say some of the things that I have read or seen about the Brazilian election, are very questionable.
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