Most currency traders do not bother with visiting the country whose currency they are speculating i, but I go to Brazil often and consider my observations important for my own trades. My business needs require frequent forex between gold, USD, silver, BRL, and occasionally Euro and CHF.

If I am on the right side of the trade, then Brazil/USD currency trading can be a screaming source of profits.

Here is why the BRL offers such outsized returns:

Brazil's Real vs. U.S. Dollar Foreign Exchange Rate

Unlike China, where much of the growth is financed by zombie banks, Brazil’s banks have relatively more solid balance sheets, along with more stable producers to invest in. With the agricultural supply tightness across almost all soft commodities – witness the sugar and rice escalations – Brazil’s banks are funding ag, as opposed to another narrow margin, oversupplied electronics or widget manufacturer in China. Besides, the BRL has so much volatility relative to the USD, there are profits to be made coming and going.

The Yuan/USD peg keeps the Asian behemoth out of the forex spec play. Brazil’s Real is definitely an exotic, and can be a tricky one to find a counter party on, but if you can, there is both a long term and short term trading opportunity of year making profit potential.
I have both won and lost on the BRL trade, depending on my business needs in Brazil. As it stands, I am heavily long the BRL and see no near term reasons to change my mind.

So long as the world continues to eat, Brazil’s currency will continue to escalate. Brazil is becoming the margin producer of many food items, while production across both N. America, Europe, and Asia continues to suffer from weather dislocations.

For the gunslingers, the BRL/USD trade in the forex trading market is a prime opportunity to ride the fall of the USD, and rise of a new powerful currency. For the longer term investor, ETF’s that invest in Brazil or Ag commodities will bring much the same trend, though without the day to day profit potential.

A profitable trading day to all!

Long the suffering basket case, Brazil world export and import trade has pinned its progress on the back of Brazil agricultural production.

Since I am actively farming in Brazil, I see this explosion of agriculture with Brazil world export and Brazil economic growth intimately woven together. Without the farmers, Brazil has meager growth potential. With the farmers, Brazil world-wide dependence on this agricultural sleeping giant will only grow, along with the millions of hectares of arable land as yet to see any production.

Where I farm, there has been almost no development. Compared to Bahia, where huge farms send Brazil produce world-wide including exports of soy beans, cotton, corn, beef, fruits and vegetables of all kinds, and even farmed fish.

Despite Brazil world exports of agricultural products, Brazil’s economic growth depends on rising beyond commodities to high value add products in the high-tech arena. Education will be Brazil’s challenge to joining world powerhouses such as Japan, China, Korea, and Germany, or the former greatness of the U.S.

Brazil World Economic Trade with U.S. 2009

Unfortunately, as difficult as the U.S. can be with its new “socialism 4.9 – Turbo” political climate, Brazil can be even more challenging. Bribes still work, even if they should not. Brazil world influence is growing despite the openly corrupt bureacracy, such as the government in Tocantins that was recently thrown out over corruption.

The key then to Brazil world growth and surpremacy in agriculture, will be Embrapa pushing new technology and butting Monsanto out of the fields along with their ilk, getting Brazilians educated in engineering and science, and keeping the bankers in check. If these tricks can happen, Brazil world influence and economic success will make it the star it has always aspired to be. Brazil is closer to the promise of being the next great country than it has ever been.

The Brazilians see the bright future, but are held back by excessive taxes, government bureaucracy, corruption, and lack of science education. Clearing away these burdens will unleash a land that can feed the world – or 10 worlds with no worries about population or anything of the kind.

In Brazil, there is no reason for anyone to go hungry. With Brazil world influence growing, agricultural production growing, government intervention reduced, and knowledge developed for increasing arable land, there will be no reason why the rest of the world cannot be fed by Brazil as well.

Much like the U.S. was the bread basket of the world, so too will Brazil feed the world.

Get an agricultural ETF, a Brazil ETF, and a Bovespa long fund going, after the next washout in the market. Grow your portfolio along with Brazil…