What happens if you impose financial tariffs?

Here's the story from Bloomberg: http://www.bloomberg...id=aIIK0fv0Rj70 I think this is newsworthy and also instructive.

Oct. 20 (Bloomberg) -- Brazilian stocks dropped the most in four months and the currency tumbled after the government imposed a tax on foreign purchases of equities and bonds to stem the real's appreciation. Click link for the full story.

Here's the story from Bloomberg: http://www.bloomberg...id=aIIK0fv0Rj70 I think this is newsworthy and also instructive.

Oct. 20 (Bloomberg) -- Brazilian stocks dropped the most in four months and the currency tumbled after the government imposed a tax on foreign purchases of equities and bonds to stem the real's appreciation. Click link for the full story.

There you go: Real too high, Dollar too low. You'll find the same situation across the world with all currencies. The Pendulum will now swing again......The Loonie lost 2 cents this morning.

GS.

Here's the story from Bloomberg: http://www.bloomberg...id=aIIK0fv0Rj70 I think this is newsworthy and also instructive.

Oct. 20 (Bloomberg) -- Brazilian stocks dropped the most in four months and the currency tumbled after the government imposed a tax on foreign purchases of equities and bonds to stem the real's appreciation. Click link for the full story.

Here's what happened in Thailand a couple of years ago when they tried something similar:
Thailand scraps capital controls after stocks plummet - Business - International Herald Tribune

Now, which country in their right mind would want the U.S peso to flood their country's stock markets, cause appreciation of their currency and kill their export competitiveness ?. What other option do they have ? - intervene, buy the dollar, sell the REAL and increase their forex reserves with U.S pesos and stoke domestic inflation ?. The protectionism wars have only begun !

Their govt is probably going to withdraw their investments in the US markets as well.

Now, which country in their right mind would want the U.S peso to flood their country's stock markets, cause appreciation of their currency and kill their export competitiveness ?. What other option do they have ? - intervene, buy the dollar, sell the REAL and increase their forex reserves with U.S pesos and stoke domestic inflation ?. The protectionism wars have only begun !

You're likely right about protectionism being an issue going forward. As far as other options, I would hope (from my Econ 101 perspective) they would buy more of our cheaper U.S. goods and services while their currency is flush. It's probably naive to think it would work, but they would get some good stuff, give our economy a little boost, and theoretically bring down the real against the dollar. That way the pendulum would swing more naturally. But their government has to intervene...flexing their financial muscles!