relationship based system. The market is based on government pronouncements. The stimulus was caused by a wall of money from banks that was misallocated, because it was assigned by the government through the banks to state owned businesses and local governments. Some went into the stock market and real estate markets. A lot was used to stockpile commodities. That is where Brazil comes in.
Brazil has had a higher percentage of exports of commodities to China and it has recently boosted its trade. Since we are far from high growth, the demand for commodities over the past few months has been driven by China. As China pulls back, so will the demand for Brazilian commodities.
Without the American consumer, the demand for consumption of Chinese goods will fall off and China will experience slower growth. Also look for massive dumping. And the complaints to the WTO are not coming from the US. The big filers are places like India and even Latin America.
I might point out that all of my pronouncements have been correct. Look also for growing toxic assets within the Brazilian banking system. I have predicted this for months and the dominoes continue to fall. First Russia, then the Gulf, now Nigeria. The next will be China and Brazil.