Research Report ►(comments)

When local governments provide a favorable economic environment, the demand and value of their currencies will also increase. WikiWealth's Fundamental Currency Analysis is a combination of four different valuation methods: investment flows, purchase price parity, interest rate parity, and inflation rate parity (see Fundamental Currency Analysis). WikiWealth, and website visitors, examine the conditions for companies to prosper through the "Investor Survey." Countries with strong fundamental freedom, transparency, stability, strengths & opportunities (see Main Street Analysis), will aid the long term potential of companies. A "Buy" rating from both approaches mean a country's currency has high potential to increase in value.

Brazil Summary

Brazil Country Analysis ► (edit / improve) Brazil (BRL) is a member of the BRIC nations and has the largest economy in South America. Brazil has significant agricultural and industrial industries. Currency: the Brazilian currency has the potential to increase in value especially versus many developed market currencies. Brazil has high interest rates, low inflation and positive investment flow potential. Investor Survey: the economic environment is moderate, with low government transparency and high SWOT opportunities. Trade: China, Netherlands, Argentina and USA are the top trading partners. Brazil has significant export capabilities in agriculture and industrial products such as ethanol, sugar, oats, pork, corn, soybean and airplanes. Commodity: A favorable growth environment and car fuel demand create a significant and growing industry for Ethanol. SWOT Analysis: Ethanol is the leading US strength, while education, crime and income inequality are major weaknesses. A recent oil discovery is a major opportunity for Brazil, while the threat of HIV could slow growth and burden the health system. Trading Strategy: An undervalued currency, moderate investment flow potential and positive SWOT opportunities help Brazil, but fundamental weaknesses and government issues hold back Brazil’s potential.

Investment Impacts (help)

Ethanol Commodity Analysis ► (edit / improve) Ethanol is used as a fuel for motor vehicles. The largest ethanol producer in the world is Brazil. Commodity: Ethanol is rated a Hold. This is not enough data to indicator ethanol demand, whereas ethanol suppliers have a moderate potential in increase. Investor Survey: Ethanol’s long term growth potential is moderately favorable due to high scores on the SWOT analysis, but low sources in lack of good substitutes. SWOT Analysis: Strength: Ethanol is a renewable fuel; Weakness: ethanol has a high production cost. Opportunity to grow: ethanol could benefit as cellulose plants improve in the future; Threats to growth: a decline in crude oil prices could decrease demand for ethanol. Trading Strategy: The commodity analysis hold rating indicates that ethanol’s price should stay the same over the short term, whereas an average investor survey means ethanol may stay the same in price over the long term.

Brazil's favorable climate allows them to grow sugar cane - to make ethanol - year round. High yielding crop land and abundant space should keep Brazil as one of the largest producers of ethanol in the world. Additionally, Brazil's car industry produces car than can run in ethanol or gas. This helps with domestic demand.

Major Brazil Trade Partners ► Press "Edit / Improve"

USA Country Analysis ► (edit / improve) The United States (US) has a highly productive, capitalist economy and is the largest and most diverse market in the world. Currency: the US dollar (USD) has the potential to increase in value especially versus the Australian and Canadian dollar because of the significant potential of undervalued companies. Investor Survey: the economic environment is very favorable for long term economic growth due to high scores on economic freedom and economic diversity. Trade: China, Japan, Mexico, and Canada are the top US trading partners, while the leading export and import are electrical machinery and vehicles, respectively. Commodity: The US produces a significant amount of coal and wheat for use at home and as an export. However, the US consumes a larger amount of oil, which contributes to their trade deficit. SWOT Analysis: The leading US strength is its entrepreneurial culture, while the main weakness is high health care cost. Energy independence has the opportunity to propel growth, while the major threat is the housing crisis, which will lower growth. Trading Strategy: An undervalued currency, high investment flow potential and favorable business environment lead to a positive outlook for US investments, which will also benefit from positive international actions.

Argentina Country Analysis ► (edit / improve) Argentina (ARS) has abundant natural resources and an agriculture dependent economy with a well-educated population. Currency: the currency has significant potential to increase in value, especially versus all major currencies, because of their especially high interest rates and investment flow potential. Investor Survey: the economic environment is moderately favorable for long term economic growth, due to higher scores on the SWOT strengths versus weaknesses. Trade: China, Chile, Brazil and USA are the top trading partners, while the leading exports are agricultural products such as cattle / beef. Commodity: ARS's main commodity exports include cattle, soybean, and wool. SWOT Analysis: The Leading ARS strength includes their agriculture and manufacturing segments, while the leading weakness is political intervention and corruption. Deforestation is a major threat, because of its economic and environmental impacts. Trading Strategy: ARS has a significantly undervalued currency, but political risk makes the country unstable. High investment flow potential, undervalued currency and moderate political risk create an overall positive outlook for ARS investments.

China Country Analysis ► (edit / improve) China (CNY) is a fast growing communist country with the largest population in the world. Currency: China’s currency is moderately undervalued. Purchase price parity shows that China’s currency is approximately 40% undervalued, however, the other three valuation approaches show that China is fairly valued. Investor Survey: China’s economic environment is very unfavorable for long term economic growth due to the lack of economic freedom, government transparency, and the SWOT analysis. Trade: Indonesia, Pakistan, Norway, Singapore, Europe, the US are the top export partners, while the leading industry is industrial goods, usually for export. Commodity: China produces a significant amount of coal for use at home. The use of coal to provide energy leads to other health related problems. SWOT Analysis: The leading Chinese strength is their cheap labor, while the main weaknesses are political risk and corruption. Renewable energy has the opportunity to propel growth, while general pollution and an aging population could slow growth rates. Trading Strategy: An undervalued currency, average investment flow potential and an unfavorable business environment leads to a neutral outlook for Chinese investments.

Netherlands Country Analysis ► (edit / improve) The Netherlands (EUR) has an open, capitalist economy with a flexible labor market. Currency: The Netherlands is part of the Euro economic zone, whose currency has the potential to decrease in value on a global scale per the purchase price parity analysis. Investor Survey: The Netherlands’ economic environment is very favorable for long term economic growth due to high scores on government transparency, economic diversity, and the SWOT analysis. Trade: Finland, Belgium, France, Germany and USA are the Netherlands' top export partners, while the leading industry is financial services. SWOT Analysis: The leading Dutch strength is their flexible labor market, while a potential weakness is judicial corruption. A major threat to long-term economic growth is global warming, which could trigger rising sea levels that could flood much of the country. Trading Strategy: An overvalued currency, low investment flow potential, but very favorable business environment leads to a neutral outlook for Dutch investments.

Germany Country Analysis ► (edit / improve) Germany (EUR) is the largest economy in Europe and relies on a strong and sophisticated industrial base to drive their exports. Currency: Germany is part of the Euro economic zone, whose currency has the potential to decrease in value on a global scale per the purchase price parity. Investor Survey: Germany’s economic environment is favorable for long term economic growth due to high scores on economic freedom, economic diversity, and government transparency. Trade: The UK, France, and USA are the top export partners, while the leading export industry is industrial goods. Commodity: Germany imports many commodities to feed its industrial base: crude oil, coal, copper, aluminum, lead, zinc, and natural gas. SWOT Analysis: The leading German strength is their engineering expertise, while the main weakness is their declining birth rate. Trading Strategy: An overvalued currency, moderate investment flow potential and favorable business environment lead to a slightly positive outlook for German investments.

Source: http://internationaltrade.suite101.com/article.cfm/brazil_s_trade_buddies

Major Brazil Production ► Press "Edit / Improve"

Ethanol Commodity Analysis ► (edit / improve) Ethanol is used as a fuel for motor vehicles. The largest ethanol producer in the world is Brazil. Commodity: Ethanol is rated a Hold. This is not enough data to indicator ethanol demand, whereas ethanol suppliers have a moderate potential in increase. Investor Survey: Ethanol’s long term growth potential is moderately favorable due to high scores on the SWOT analysis, but low sources in lack of good substitutes. SWOT Analysis: Strength: Ethanol is a renewable fuel; Weakness: ethanol has a high production cost. Opportunity to grow: ethanol could benefit as cellulose plants improve in the future; Threats to growth: a decline in crude oil prices could decrease demand for ethanol. Trading Strategy: The commodity analysis hold rating indicates that ethanol’s price should stay the same over the short term, whereas an average investor survey means ethanol may stay the same in price over the long term.

Soybean Commodity Analysis ► (edit / improve) Soybean is an important ingredient in many processed foods. It is high in protein and low in oil. Commodity Analysis: Soybean is rated a Hold. Soybean demanders have a slightly higher potential to increase in value, while coal suppliers have a slightly lower potential to increase in value. Investor Survey: Soybean’s long term growth potential is average. SWOT Analysis: Strength: Soybean has many health benefits; Weakness: soybean produces considerable pollution. Opportunity to grow: soybean has fast growing potential in the vegan market; Threats to growth: global warmer could hurt growth partners and crop yields. Trading Strategy: the commodity analysis Hold rating indicates that soybean should stay the same price over the short term. The average investor survey means soybean may stay the same in price over the long term.

Coffee Commodity Analysis ► (edit / improve) Coffee is a brewed beverage derived from the coffee plant beans. It is one of the most popular drinks in the world. Commodity: Coffee is rated a Buy. Coffee demanders have an average potential to increase in value, while coffee suppliers have low potential to increase in value. Investor Survey: Coffee’s long term growth potential is average due to high scores on SWOT opportunities, but low scores on lack of good substitute commodities. SWOT Analysis: Strength: Coffee is one of the most popular beverages in the world; Weakness: the cost of producing coffee increased. Opportunity to grow: coffee’s widespread use could aid growth as the world’s population increases; Threats to growth: plant disease may compete against coffee. Trading Strategy: The commodity analysis buy rating indicates that coffee should increase in price over the short term, whereas an average investor survey means coffee may stay the same in price over the long term.

Corn Commodity Analysis ► (edit / improve) Corn, or Maize, is the most popular crop in the Americas and is a major source of food for humans and animals. Commodity: Corn is rated a Hold. Corn demanders and suppliers have average potential to increase in value; therefore, prices should not change over the short term. Investor Survey: Corn’s long term growth potential is moderately unfavorable due to low scores on sensitivity to price changes, short supply and substitute products. SWOT Analysis: Strength: Corn can be used for biomass, which can be converted into a popular alternative fuel source; Weakness: Corn as a biomass has contradictory production factors. Opportunity to grow: corn could benefit as the world’s population increased; Threats to growth: global warming could decrease the yield of corn crops. Trading Strategy: The commodity analysis hold rating indicates that corn should stay the same price over the short term, whereas a moderately unfavorable investor survey means corn may decrease in price over the long term.

Tin Commodity Analysis ► (edit / improve) Tin is most often used as a corrosion protective coating for other metals. Commodity Analysis: Tin is rated a Hold. WikiWealth did not have a robust enough sample of demanders to gauge potential. Tin suppliers have average potential to increase in value. Investor Survey: Tin’s long term growth potential is moderately unfavorable due to low scores on difficulty to expand supply and substitute products. SWOT Analysis: Strength: Tin has moderate health benefits. Trading Strategy: The commodity analysis hold rating indicates that tin should stay the same price over the short term, whereas a moderately unfavorable investor survey means tin may decrease in price over the long term.

Oats Commodity Analysis ► (edit / improve) Oats are a species of cereal that is mostly used to feed livestock. Commodity: Oats are rated a Hold. Oats demanders and suppliers have a high potential to increase in value. Investor Survey: Oats’ long term growth potential is moderately unfavorable due to low scores on difficulty to expand supply, sensitivity to price changes, and lack of good substitute commodities. SWOT Analysis: Strength: Oats have important soluble fiber qualities; Weakness: oats are sensitive to grain damage. Opportunity to grow: oats demand may increase due to demand from emerging markets; Threats to growth: oats growth could decrease due to global warming threats. Trading Strategy: The commodity analysis hold rating indicates that oats should stay the same price over the short term, whereas a moderately unfavorable investor survey means oats may decrease in price over the long term.

Pork Commodity Analysis ► (edit / improve) Pork bellies are the meat from the bellies of pigs. This area of the pig is often used to produce bacon in the US. Commodity: Pork is rated a Buy. Pork belly demanders have a moderate potential to increase in value, while pork belly suppliers have a very low potential to increase in value. Investor Survey: Pork bellies’ long term growth potential is moderately unfavorable due to low scores on difficulty to expand, lack of good substitutes, and SWOT strengths. SWOT Analysis: Weakness: pigs require significant feed cost and have health risk if over eaten. Opportunity to grow: pork bellies are growing in popularity as western foods become more popular; Threats to growth: swine flu could hurt future pig demand. Trading Strategy: The commodity analysis buy rating indicates that pork bellies should increase in price over the short term, whereas a moderately unfavorable investor survey means pork prices may decrease in price over the long term.

Sugar Commodity Analysis ► (edit / improve) Sugar, this sweet flavored substance, is mostly derived from sugar cane and sugar beet. Commodity Analysis: Sugar is rated a Hold. Sugar demanders are fairly valued, while sugar suppliers have low potential to increase in value. Investor Survey: Sugar’s long term growth potential is moderately favorable due to high scores on SWOT analysis. SWOT Analysis: Strength: Sugar is traded all over the world and is a necessary ingredient in many products; Weakness: excess consumption of sugar could lead to health problems; Opportunity to grow: sugar’s widespread use, especially in drinks and ice cream, could aid growth in the future; Threats to growth: monsoons could affect sugar, because both rely on tropical weather to grow. Trading Strategy: The commodity analysis hold rating indicates that sugar should stay the same price over the short term, whereas a moderately favorable investor survey means sugar may increase in price over the long term.

Chicken Commodity Analysis ► (edit / improve) Chicken is the largest population of domesticated fowl. Chicken meat and eggs provide a significant source of protein for much of the world’s population. Commodity: Chicken is rated a Hold. Chicken demanders and suppliers have equal potential to increase in value; therefore, there should be no real change in price. Investor Survey: Chicken’s long term growth potential is average due to high scores on sensitivity to price changes and low scores in substitute products. SWOT Analysis: Strength: Chicken has many health benefits over other sources of protein; Weakness: chicken feed cost is substantial and can fluctuate over type. Threats to growth: the avian flu and other poultry diseases may hurt growth rates. Trading Strategy: The commodity analysis hold rating indicates that chicken should stay the same price over the short term and the average investor survey means chicken should stay the same in price over the long term.

Milk Commodity Analysis ► (edit / improve) Milk is a white liquid that is mostly produced by cows for consumption by humans in a mass produced format. Commodity: Milk is rated a Buy. Milk demanders have a moderate potential to increase in value, while milk suppliers have very low potential to increase in value. Investor Survey: Milk’s long term growth potential is moderately unfavorable due to low scores on the SWOT analysis. SWOT Analysis: Strength: Milk has many health benefits; however, a weakness is its short shelf life. Trading Strategy: The commodity analysis buy rating indicates that milk should increase in price over the short term, whereas a moderately unfavorable investor survey means milk may decrease in price over the long term.

Major Brazil Consumption ► Press "Edit / Improve"

Ethanol Commodity Analysis ► (edit / improve) Ethanol is used as a fuel for motor vehicles. The largest ethanol producer in the world is Brazil. Commodity: Ethanol is rated a Hold. This is not enough data to indicator ethanol demand, whereas ethanol suppliers have a moderate potential in increase. Investor Survey: Ethanol’s long term growth potential is moderately favorable due to high scores on the SWOT analysis, but low sources in lack of good substitutes. SWOT Analysis: Strength: Ethanol is a renewable fuel; Weakness: ethanol has a high production cost. Opportunity to grow: ethanol could benefit as cellulose plants improve in the future; Threats to growth: a decline in crude oil prices could decrease demand for ethanol. Trading Strategy: The commodity analysis hold rating indicates that ethanol’s price should stay the same over the short term, whereas an average investor survey means ethanol may stay the same in price over the long term.

Important Brazil Industries ► Press "Edit / Improve"

Industrial Industry Analysis ► (edit / improve) The industrial industry includes companies whose sales originate from the manufacturing of materials into finished goods and services. Valuation: Based on WikiWealth's Wall Street analysis, this industry is a Hold, with slightly positive potential. The Main Street analysis says a Hold with SWOT strengths much great than weaknesses and SWOT opportunities less than threats. Trade: The following countries derive much of their income from the industrial sector of the economy: Brazil, Venezuela, USA, Belgium, the EU, Germany, France, China, Hong Kong and Japan. Main industrial commodities include the following: aluminum, copper, lead, nickel, palladium, silicon, steel, tin, and zinc. Trading Strategy: The industrial industry tends to be sensitive to economic cycles. Look for undervalued industrial investments during economic recessions when stock prices are low and sell industrial investments during the late stages of a bull markets when stock prices are high. The global economy is currently in a recession, therefore, it is the perfect time to purchase industrial investments. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.

Staples Industry Analysis ► (edit / improve) The consumer staple industry includes companies whose sales come from necessary consumer staple purchases such as rent, mortgage and food. Valuation: Based on WikiWealth's Wall Street analysis, this industry is a Hold, but with a ~ 30 percent potential. The Main Street analysis says a Buy with SWOT strengths much great than weaknesses and SWOT opportunities roughly the same as threats. Trade: Some of the main trade hubs include Argentina, Brazil, USA, Colombia, Greece, Italy, Turkey, and Indonesia, while the main staple commodities include chicken, corn, milk, oats, rice, sugar, wheat. Trading Strategy: The consumer staple industry tends to be less sensitive to economic cycles. Look for undervalued staple investments at any time in the business cycle when stock prices are low, and especially during the late stages of a bull markets when investors become more defensive. The global economy is currently in a recession, therefore, investors are rotating money out of consumer staples and into faster growth industries. Upward sloping stock charts and financial news may indicate a selling opportunity while the opposite means that stocks are becoming undervalued.

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