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Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World

ISBN: 978-1-118-00663-4
331 pages
August 2012
Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World (1118006631) cover image
Look to Brazil for safe, stable investments

As the future of the American economy seems to get bleaker by the day, it is tempting to look abroad for business opportunities. Europe and Asia don't provide much hope, but what about somewhere that's both closer to home and sunny year-round? In Brazil is the New America: How Brazil Offers Upward Mobility in a Collapsing World, James D. Davidson shows that the current financial situation in Brazil is a haven for those looking to make money in a world in turmoil.

With a population just 62 percent the size of that of the US, Brazil has added 15,023,633 jobs over the past eight years, while the US has lost millions. In a world burdened by bankrupt governments and aging populations, Brazil is solvent, with two people of working age for every dependent. In a world of "Peak Oil" Brazil is energy independent, with 70 billion barrels of oil, 60% of the world's unused arable land, and 15% of its fresh water. Comparatively non-leveraged—and with significant room for growth and expansion, as well as vast natural resources, Brazil is a haven of opportunity.

Written by James D. Davidson, the editor/publisher of Strategic Investment and cofounder of Agora and the media outlet, Newsmax, Brazil is the New America details:

  • How the original "America" now embodies the brightest hope for realizing the American Dream while the "Old America" is headed for a dramatic decline in the standard of living
  • Investment opportunities not only for those willing to relocate, but anyone who can consider investing there
  • The cost structure of employment in Brazil versus the United States

Brazil has already learned its lesson about the dangers of inflation. Cash has taken the place of credit, and high interest rate returns are now the norm.

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Preface xiii

Acknowledgments xv

Chapter 1 The World in 2050 1

A Preview of the Future 2

A Decrease in Productive Capacity 5

Squandering Prosperity 9

Chapter 2 The Original America Is the New Brazil 11

The Country of the Future 14

The Origins of America 20

The Mythic Brazil 24

A Difficult Dream to Realize 26

Can America’s Destiny Be Fulfilled in Brazil? 28

Chapter 3 How Brazil Became Endowed for Prosperity in a Collapsing World 35

The Impact of Topography 36

Yesterday’s Limitations as Today’s Strengths 45

Three Radical Changes 53

Predatory Government

Growth Imperatives Lead to Fiat Money and Runaway Debt

Energy Surges Alter Spatial Configurations of Economies

Chapter 4 Prosperity and Energy Density: The Hidden Role of BTUs in the Rise and Fall of Economies 67

Denser Energy Equals a Rise in Prosperity 68

Coal and Adam Smith 69

Going Forward or Backward?

The Phases of Extracting Energy 73

Phase One: An Abundance of Wood

Phase Two: An Abundance of Coal

Phase Three: The Original Petroleum Industry

The Shift from Coal to Oil and World War I 75

Peak Oil and Declining Money 79

Declining Energy and Systemic Collapse

The Real Symptoms of Peak Oil

The Competition for Prosperity 84

Expensive Oil Remains

A 665,000 Percent Increase in the Price of a BTU?

The SS Great Britain Sails Again 87

“Yes! We Have No Bananas”

Chapter 5 Malthus Again: Population Pressures, Global Cooling, and the Coming Dark Age 91

The Dynamics of Weather 93

Not Wrong, but Early 96

Waiting for Our Malthusian Moment 100

The Next Little Ice Age 104

“The Dog That Did Not Bark” 114

Putting Two and Two Together 117

A New Maunder Minimum 124

Dearth, Insanity, and Revolution 125

Chapter 6 Deficit Attention Disorder: How the Perverse Logic of Debtism Promotes the Illusion of Democratic Consensus but Devastates the Economy 131

How Debtism Changed the World 132

Debtism Helps Politicians Manipulate You 142

The U.S. Budget Deficits Would Make Greece Blush 144

Worse than the Great Depression 149

The Collapse of the Boom 156

Chapter 7 “Rome” Falls, Again: Economic Closure and Financial Repression as the United States Faces Bankruptcy 159

Slip-Sliding Down the Road to National Insolvency 160

The Destruction of the Middle Class

Pre-Industrial Growth Rates

Are You Ready for Taxes to Double?

Welcome to the Second Decline and Fall of “Rome” 167

The New Berlin Wall

Americans as the New Illegal Emigrants 172

Chapter 8 The Sunny Side of the Leverage Cycle: How Brazil’s Legacy of Hyperinflation Prepared It to Prosper in a Post-Dollar World 175

You Are in Steerage on a Sinking Ship 178

Stopping Runaway Spending 181

Important Lessons from Hyperinflation 185

Minimal Bank Capital Ratios: A Crisis Waiting to Happen

U.S. Reserve Requirements: A System Failure

The Political Roots of the Economic Crisis

How Brazilians Became the New Scots

Crash-Proofing the System Brazilian Style

America’s $104 Trillion Problem

Brazil and the Taylor Rule

Leverage and Growth 195

GDP Gains Based on Income Growth 196

Chapter 9 A Bounty of Water and Land: Brazil as History’s First Tropical Superpower 199

Brazil and Water 199

Sustainability

A World of Water Shortages

Renewable Water

Brazil Reinvents Agriculture 206

The New Breadbasket of the World Diversification

Irrigation

A History of Small and Large Farms

A Stunning Increase

Chapter 10 Reversing the Gap: Brazil as the World’s Emerging Energy Superpower 221

The Zero Sum Growth Game 222

Grim Prospects 226

Pulling the Plug 228

Submerging Economies 231

Rio Is the New Houston 233

Leading the Way in Renewable Energy 238

Let There Be Light 242

Declining Power after an Energy Transition 244

Chapter 11 Demographic Turbocharge: Brazil’s Coming Decades of Miracle Growth 247

China Takes a Dive? 251

Brazil’s Demographic Bonus 253

A Laboratory for New Products 257

A Real Cultural Melting Pot 258

Chapter 12 Back to the Future: What Could Go Wrong 261

Is Brazil Following the United States

Too Closely? 262

Weight 264

Effects on Health Care 268

Diversity Issues 270

Infrastructure 274

Corruption 277

Bureaucracy 278

Custo Brasil 281

Credit 284

Chapter 13 On the Outside Looking In: Making the Move toward Prosperity 289

Conclusions 290

Healthcare

Education

Military

“Plagiarize, Plagiarize, Why Not Use Your Eyes?” 298

Coming Soon: Financial Repression 299

“Revocation or Denial of Passport in Case of Certain Unpaid Taxes” From the Empire Settlement Act to Unsettling Choices 302

Looking at BRICs 304

Untapped Resources

Climate: Brazil Stays Warm in the Little Ice Age

U.S. Farmers Lead the Migration to Brazil

Making the Move 308

About the Author 311

Index 313

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James Dale Davidson is a successful entrepreneur who edits Strategic Investment. A cofounder, with Bill Bonner, of Agora Inc. and a cofounder of the media outlet Newsmax.com, Mr. Davidson is the author of five books. He defied conventional wisdom to forecast the Japanese stock market crash of 1989, the fall of the Berlin Wall, and the collapse of the Soviet Union.

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July 27, 2012
Brazil Offers Upward Mobility in a Collapsing World

As the U.S. grows more bankrupt by the day, many Americans are looking for investing opportunities abroad, but the familiar, traditional "advanced" temperate-zone economies of Europe and Asia seem just as bleak. In his new book Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World (Wiley; August 2012 Hardcover & ebook; $29.95; ISBN: 978-1-118-00663-4), James Dale Davidson, acclaimed entrepreneur and cofounder of Agora and Newsmax, presents another option explaining how Brazil has emerged as the new destination for investment success.

Even before the subprime crisis of 2008, economic growth in the United States was steadily decelerating. In the past decade, ever shrinking incomes and an erratic stock market combine with a widening gap between spending promises and actual resources to create a perfect storm of downward mobility. Yet, while the United States remains in the throes of financial crisis, Brazil has already undergone its own period of wrenching adjustment and has come out the other side all the stronger for it. Having learned its inflation lesson, Brazil is now reinstituting high-interest credit, paving the way for impressive growth prospects over the next decade, while transforming the country into an investor's dream.

“We Americans believe ourselves to be rich. For our entire lives, we have been told that the United States is the richest country on earth. Many of us who cast uneasy glances into the future anticipated that sometime in the future the unrealistic promises made to pay Social Security and Medicare benefits would come to grief. We were optimists,” says Davidson. “That someday is not decades away, but the day after tomorrow.”

Davidson points out that with a population just two-thirds the size of that of the U.S., Brazil has created over 15 million jobs in the past eight years, while the U.S. lost jobs. Combining energy independence and vast natural resources, including 60 percent of the world's unused arable land, and 25 percent of its fresh water, Brazil is the first tropical superpower, offering a whole new frontier for growth. Add in a young population, a relatively underleveraged consumer economy, and a per capita GDP that has more than doubled in the last decade, and you have a recipe for investment success. Davidson also explores:

  • How the original "America" now embodies the brightest hope for realizing the American Dream while the "Old America" is headed for a dramatic decline in the standard of living
  • Brazil’s investment opportunities for anyone looking to relocate themselves, their business, or simply want to put their money to work somewhere that still has the potential to grow
  • The cost structure of employment in Brazil versus the United States
  • How unlike the US economy, the economic situation in Brazil is still quite strong, in part because the consumer economy is relatively non-leveraged.
  • With Brazil hosting the 2014 World Cup and 2016 Olympics, billions in funding and millions of visitors will flood to the country in just the next few years

“This book is an attempt to explain how and why the world is changing, with respect to the other great, continental American economy – Brazil,” adds Davidson. “The awakening of the long slumbering giants, China and India, will profoundly reshape the world economy, and Brazil is one country that is sure to benefit. This book shows you everything you need to know to start investing in and profiting from its growth.”

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Brazil Is the New America: How Brazil Offers Upward Mobility in a Collapsing World (US $29.95)

-and- Passport to Profits: Why the Next Investment Windfalls Will be Found Abroad and How to Grab Your Share, Revised and Updated (US $24.95)

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