According to my contacts (who are in a position to know) Brazil is in for a few changes over the next 3 to 5 years in the banking and credit sectors. So whilst what you are saying is true now it wont be for too long.
Well, you can certainly believe me when I say that no one hopes for what you're saying to come true more than myself, as it would certainly facilitate my life and work here. As far as the changes, Brazil certainly has a lot of work ahead of them Rob, at the moment there isn't another country with a higher rate of interest, and that's not because they're borrowing at a higher rate, as they also have the highest "spread" of all countries.
I would love to know who your contacts are though, as if they can predict market conditions accurately they should be very wealthy...and could make us all very wealthy!! You'll have to forgive me if I'm a bit cyncial about some things as I've been in Brazil on a day-to-day basis for a decade now and we always hear A is going to happen and get better, B, C, etc., and it just never seems to happen, or it happens but is replaced by another problem as bad as the one that was resovled or worse. As what happened to Brazil's debt...they virtually paid off the IMF but replaced it with domestic debt....not sound fiscal policy or the correct way to go about reducing debt.
As you seem to know a lot about Brazil Rob you problably know that approximately 20,000 families control this country....unfortunately. It has one of the highest, if not the highest, unequal rate of distribution of income on the planet...hence, the rich get richer(ultra rich) and the poor can't get much poorer, as there are approx. 12 million brazilians making less than 1 dollar a day and 44+ million making less than 2 dollars a day. To say that "bankers" have great influence over brazil is like saying it gets humid in the Amazon.
In my 10 years here I've had bank accounts and do have bank accounts at 4 different banks. Bradesco, Banco do Brasil, Caixa Economica, and Banese. My "pessoa juridica", although investing close to 4 million reais over the last 4 years has NO line of credit. You have to show
brazilian monthly income to get a line of credit regardless of what your situation may be outside of Brazil. And my personal accounts, in which I have a perfect credit rating, have a total of about 20,000 reais in available credit between the 4 banks....and I pay 13% interest a MONTH if I decide to use any of that credit. I actually procured a secure loan several years ago for 40,000 reais, around 12,000 pounds at the moment, and the loan was SECURED, and I had perfect credit, long history and great relationship with the bank, I received a rate of interest of 4% per month! I paid the loan off after 4 months since if I would've held it to it's 18 month term the interest would've been ludicrous. And as I've stated, things have gotten better here over the last 18 months, but they haven't even came close to matching the reductions in the SELIC in respect to passing these savings on to the consumers....they've just made the bankers even more money.
One has to consider as well, at this moment the dollar, british pound, and euro are the cheapest they've been in Brazil since the "real plan" was announced in late 1997 as when the real was introduced they put the value of it above the dollar!! At the beginning of the "real plan" one dollar was actually worth 96 centavos!! I know a retired brazilian military man that went and purchased as many dollars as he could back then with his life savings he acquired....and shortly after, within 24 months, one dollar was worth 3 reais. I wouldn't bet on the dollar going much lower than it is now....Banco Central won't allow it, they're already getting beat up on exports/imports at the value it is now. And the U.S. is by far and away the largest trading partner brazil has.
As far as your contacts that are in a "position to know"....be careful if that's what they're telling you, as not even Guido Mantega nor Alan Greenspan can tell you what changes are going to transpire in the banking and financial sectors here in Brazil over the next 3-5 years. Too many unknown factors to consider that have yet to even take place.
We can only hope sound fiscal policy continues to take place here in Brazil as has over the last 5 years or so. They have a presidential election coming up in 2010....and George W. is gone after 2008. Thank God.