Brazil's public debt has risen rapidly, and with real interest rates above the growth rate, a traditional Latin American debt crisis can arrive quickly unless there is urgent fiscal reform. Political obstacles—lack of a radical reform figure like Milei and a divided right—make such reform unlikely, implying more pain and worsening fiscal dynamics.
Brazil's public debt has risen rapidly under President Lula, and with real interest rates well above economic growth, a classic Latin American debt crisis can arrive quickly unless urgent fiscal reform is enacted. Political barriers, including Lula's electoral skill and division of the right, further darken the fiscal outlook.
The US dollar remains the dominant reserve currency with no clear successor. Europe is a museum, Japan an elderly care home, China a jail, and Bitcoin an experiment. The dollar's role hasn't shifted since the 1990s, and US economic outperformance supports it. Only a US military defeat, such as losing a war with China over Taiwan, could threaten that dominance.