USA Is the Biggest Price Maker and How this Relates to Brazil
Boca Raton, FL – There is the unprecedented spread of global “fake news” against the West, especially in economics. And specifically against the United States of North America. Nothing could be more wrong: China could become the world’s largest economy in the next decade. Not surprisingly, with 1.4 billion people, China will certainly become the world’s largest exporter.
There is, however, one inevitable and vital fact for understanding the world economy: the US remains the main price maker on all fronts. By the way, this is one of China’s great goals: to be a price maker in several commodities and industrialized goods, but the path is still far away. And how does this impact Brazil?
Who sets the price of soybeans, corn, wheat, steel, aluminum, oil, natural gas, pork belly, chips, computers, cars, airplanes, medicines, textiles, high-tech and low-tech goods? There is a simple answer: the US, followed by Europe, on a smaller scale.
The New York Stock Exchanges (NYSE, the world’s largest and most influential; NASDAQ, the stock exchange for high-tech companies and the second largest in the world), the Chicago Stock Exchange (the largest for agricultural commodities) and the The very dynamics of the North American market are responsible for pricing the overwhelming majority of commodities, and even services, in the world economy.
Why is that important?
Because the pricing is supported by investment control and the formation of large funds of all kinds. We recently saw the collapse of the Chinese real estate giant EVERGRANDE, $300 billion in debt. And it had a relatively poor repercussion on the world’s stock exchanges and markets.
But, the subprime mortgage crisis in the US triggered an unprecedented avalanche around the world, bankrupting several countries. To this day, we struggle to emerge from the destructive effects of the collapse of major American banks.
The dollar is still the base currency for all humankind’s business transactions. Cryptocurrencies could replace the dollar, but that could take decades. As Warren Buffett says, “Never bet against America”.
We collected this data for a very simple reason: if Brazilian agribusiness and industry want to have some relevance in the world, as we currently represent only 2% of world trade, it is necessary to build bridges and strategies to influence the pricing mechanisms in the giant USA. And Brazil still has a tiny presence in the business world.
We do not have global brands, our products are sold more by foreign trading companies than by similar Brazilian ones. For example, try to buy coffee in Russia, Kazakhstan, Turkey, or other countries: it is almost certain that this Brazilian coffee was traded by an English or Dutch trading company. Hong Kong has more power to trade Brazilian products in China than Brazilian trading companies. This scenario cannot continue!
Brazil needs to build a greater influencer potential in the giant USA and in the main world economic centers: NY, Chicago, Atlanta, Miami, Shanghai, London.
We need to have a full discussion with Brazilian and foreign specialists and entrepreneurs who have made their brands travel the world. An extraordinary example happens with Havaianas sandals. A brand exposure strategy in trending magazines with a worldwide reach is decisive to transform its product into an object of global desire. We influence international fashion. We have a lot to learn from Havaianas.
And there are thousands of Brazilian industrialized products that could be brands or objects of desire of the international consumer.
To achieve this, we need strategies developed by bodies such as Itamaraty, the Brazilian Trade and Investment Promotion Agency, APEX-Brasil, the National Confederation of Industry – CNI, the Brazilian Confederation of Agriculture and Livestock – CNA, think tanks, universities and companies of great international reputation operating in the marketing area, especially powerful lobbying offices in the USA.
Prices are set in the USA, and the added value of products, especially Brazilian products, can be enhanced with marketing trends on consumer behavior. It is necessary to merge know-how and get to know the international consumer market.
One thing is certain: every penny invested in news broadcasting networks about Brazil around the world has an immediate return, especially to destroy false truths about the country, and improve the image of a competitive and plural country like ours. It is necessary to influence the international media with training, information and data.
How many Brazilian journalists know that Brazil has the largest reforestation program in the world, with 4 million trees planted every day, that is, 1.5 billion trees replanted per year?
There are many articles in the press about the devastation of the Amazon, but no news about the reforestation program. Brazil needs to sell itself and show the good it does.
We can change the perception of Brazil with information about innovation, sustainability and we can sell Brazilian products and influence pricing in the USA.
By Rodrigo da Costa Fonseca
