[2015-08-15] Bitcoin Adoption Growing in Brazil Despite Poor Perception, Real...

[tyz]

Bitcoin Adoption Growing in Brazil Despite Poor Perception, Real Inflation Rate Hits 9.6%

Is the high inflation rate of 9.6 percent the reason people are turning to Bitcoin in Brazil?
The simple answer is no.
Recent statistics and infographics published by global bitcoin payment processor BitPay revealed that the volume of bitcoin transactions in Latin America has increased by 120 percent, and almost doubled in quarterly transactions.

https://bitcoinmagazine.com/21542/bitcoin-adoption-growing-brazil-despite-poor-perception-real-inflation-rate-hits-9-6/

[aso118]

“When inflation is high, everyone buys government bonds,” Novy told Bitcoin Magazine. “They are offering about 14 percent a year. It’s a very good deal comparable to the most profitable hedge funds you can find in America.

Yes, this should satisfy a lot of people. If the government interest rate beats inflation, you have a relatively safe investment which beats inflation. There aren't too many options like this.

[bryant.coleman]

“When inflation is high, everyone buys government bonds,” Novy told Bitcoin Magazine. “They are offering about 14 percent a year. It’s a very good deal comparable to the most profitable hedge funds you can find in America.

Yes, this should satisfy a lot of people. If the government interest rate beats inflation, you have a relatively safe investment which beats inflation. There aren't too many options like this.

Are you joking? I will never buy treasury bonds issued by any of the South American nations (perhaps with the exception of Uruguay). They will offer you an interest rate of 14%, but you will never know whether you will be getting back your principal amount or not. Defaults on treasury bonds are not that uncommon in South America.

[RustyNomad]

“When inflation is high, everyone buys government bonds,” Novy told Bitcoin Magazine. “They are offering about 14 percent a year. It’s a very good deal comparable to the most profitable hedge funds you can find in America.

Yes, this should satisfy a lot of people. If the government interest rate beats inflation, you have a relatively safe investment which beats inflation. There aren't too many options like this.

Are you joking? I will never buy treasury bonds issued by any of the South American nations (perhaps with the exception of Uruguay). They will offer you an interest rate of 14%, but you will never know whether you will be getting back your principal amount or not. Defaults on treasury bonds are not that uncommon in South America.

Could not agree more. As the saying goes, the higher the return the higher the risk. The returns are so high as the government needs to pay high returns in order to get anybody to give them money. The higher the returns they have to pay the higher the risk that they could default on those obligations.

There is this belief amongst many investors that anything backed by a government is safe but this is an illusion. Some governments have worse track records than your local bank when it comes to the repayment of their debt. Personally think that the days of safe investments in so far as government debt is concerned is nearing its end.

[bryant.coleman]

There is this belief amongst many investors that anything backed by a government is safe but this is an illusion. Some governments have worse track records than your local bank when it comes to the repayment of their debt. Personally think that the days of safe investments in so far as government debt is concerned is nearing its end.

Remember the situation in Argentina in 2002? The government had defaulted on $82 billion worth of bonds back then. In 2005, they had a debt restructuring, thereby paying some 25% to 35% of the principal amount back to the debtors. But the bond holders incurred very heavy losses.

The funny thing is that demand still exists for treasury bonds from Argentina. 

[aso118]

“When inflation is high, everyone buys government bonds,” Novy told Bitcoin Magazine. “They are offering about 14 percent a year. It’s a very good deal comparable to the most profitable hedge funds you can find in America.

Yes, this should satisfy a lot of people. If the government interest rate beats inflation, you have a relatively safe investment which beats inflation. There aren't too many options like this.

Are you joking? I will never buy treasury bonds issued by any of the South American nations (perhaps with the exception of Uruguay). They will offer you an interest rate of 14%, but you will never know whether you will be getting back your principal amount or not. Defaults on treasury bonds are not that uncommon in South America.

Not a person outside the country.
For a person belonging to Brazil, it is probably the safest financial product. It would be safer than bonds / equity of any Company.
The only safer alternative could be gold.

[bryant.coleman]

Not a person outside the country.
For a person belonging to Brazil, it is probably the safest financial product. It would be safer than bonds / equity of any Company.
The only safer alternative could be gold.

If Brazil defaults on its bond obligations, then it will affect everyone. And this includes the Brazilian citizens, who had purchased treasury bonds in the past. In Latin America, there is a tendency to brand the bond holders as rich oligarchs, who are out there to leach the hardworking population. So the majority of the population will support the government, if it decides to default on its bonds.