Conversions and Hyperinflation

Sao Paulo Travel Blog

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After visiting three countries in the past three days, it is becoming more and more difficult to keep the currencies straight. When I am handed a 10000 guarani  bill, I am not sure exactly what I can buy with it.  It almost gives me a headache trying to determine what the equivalent is in US dollars. I convert the guarani  to reals and then to pesos and eventually I reach dollars.  It seems silly to go through all those steps, but it just happens, I find that it is better to stick to what I am familiar with. And while I was not at all familiar with any currency except for my own prior to arriving in South America,  I quickly became accustomed to the pesos and although it was a little more difficult I adjusted to the real. But the Uruguayan peso and the Paraguayan guarani  have proved to be quite difficult for me to adjust to.


When I first arrived in Urugauy, I sat down to have a cup of coffee and realized it was 600 pesos, even though I was a bit prepared I was still overwhelmed.  It just takes time to get used to seeing such prices on menus and in storefronts.  The same held true for Paraguay, what was a guarani and why was I handed 10,000 of them after paying with a 5 dollar bill? 


All of these foreign bills led to me another money  issue that is just as unfamiliar to me. This is the issue of inflation. My question is why are both Brazil and Argentina suffering or have suffered from this in the past and what is it like to experience hyperinflation.  Inflation has come up in class more times that I can remember and it has played a significant role in both Argentina and Brazil’s economic history.


Hyperinflation is just something that I was lucky enough to have never had to cope with and I really do think that  living through a period when the country was suffering from hyperinflation would be one of the most miserable things to have to live through.  I couldn’t imagine going to the grocery store and have the jar of pickles that I picked up off the shelf double in price before I could make it to the register.  How does someone deal with with this?


            Hyperinflation is incredibly harsh on a country and it takes a long time to recover from this kind of devastation. Many countries, including Brazil and Argentina are constantly trying to beat hyperinflation.  Both countries in the past decade have implemented strategies to control inflation. The Plano Real was implemented in Brazil in the mid- 1990’s and this system is comparable to convertibility that was implemented in Argentina in the early1990’s.  The convertibility law pegged the Argentine peso to the US dollar and inflation did fall sharply in the following years but eventually this plan lead to the economic crisis that Argentina endured in 2001.  The Plano Real was a little more promising since it was just a set of measures taken to stabilize the economy in Brazil, and in Brazil inflation rates also dropped sharply.


            It took me a little while to get used to all the money matters of the various countries I have visited, but it is interesting to learn about other currencies and it makes you really appreciate the stable and strong currency of US.


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As I followed the narrow path that led me closer and closer to the waterfalls I became more and more mesmerized with the stunning beauty of my surroundings.  Every ten feet there was yet another great photo opportunity.  But photos really were incapable of capturing the exquisite beauty that I saw there.  The Falls of Iguaçu were breathtakingly beautiful, I had heard about them when I was younger, but I never really believed that I would get to see them.


As I was walking around the falls, I stopped and realized that before I had arrived there, I was not actually convinced that places like this existed in nature.  I have seen some gorgeous mountains and some gorgeous beaches, but never had a felt the magnitude of such overpowering waterfalls. Prior to feeling and seeing this wonder, I was never actually convinced that a natural site could produce such awe.  The power that is felt when standing alongside those waterfalls is in a way humbling.   


Iguaçu Falls is one of the most impressive natural attractions in Argentina and Brazil and therefore is one of the most frequented tourist sites in all of South America.  Even my mother was extra curious to hear about the time I spent at the falls because she said, “it is actually one of the places that I have heard about in Brazil, unlike Curitiba or Florianopolis.” It is a very much a major tourist attraction, and it does have the typical tourist attraction feel to it. You are greeted by a tour guide and then you are immediately thrown onto a big tour bus that has audio in a couple of different languages. There are numerous tour guides and souvenir shops that litter the surrounding area. I think I may have seen 6 different souvenir shops in just 4 hours. 


Although I never ventured to the Argentina side of the river, I had the distinct impression that Brazil had done a much better job of taking advantage of the tourists that come by the thousands. Brazil had a variety of activities that you could participate in while touring the sites. They provided easy access to the core of the waterfalls, as well as a elevator lift to give you a all-encompassing view of the waterfalls that stretched down the river. They provided a rafting tour of the rivers as well as activities like repelling off the side of the cliff.  While I am not exactly sure what Argentina had to offer, but I am sure that their activities were not as throughout as the ones found in Brazil.


            What is amazing about Iguaçu Falls is that, not only is the natural wonder exquisitely beautiful, but due to the falls the south of Brazil is able to revel in an overabundant energy supply. More than once in the past few days I have heard in various lectures that the south of Brazil has an excess of energy.  This is one thing that sets it apart from the north of Brazil.  


The Itaipu dam is located on the border between Brazil and Paraguay. And this dam also houses a hydroelectric plant. Brazil would have to burn 434 thousand barrels of petroleum every day in order to generate the same amount of electric power of Itaipu.  The energy produced by this dam is extremely important to Brazil. Brazil is completely energy independent and imports no oil from anyone.


I had my first experience with socialized medicine this past week and it was actually quite pleasant.  After deciding that a trip to the doctor might in fact be necessary Vickie and I called a cab and headed in the direction of the hospital. I was surprised when we ended up on the same campus where we had been attending class, but after giving it some thought it made sense.


When we stepped into the overcrowded waiting room, I just assumed that I would need to get some reading material out and just get comfortable because I just knew we were going to be there for hours.  The waiting room was about half the size of our hotel rooms here in Curitiba, but the small room had the capacity to hold a large crowd of people. All the chairs were occupied and people began to line the walls, finding areas conducive for leaning.  We finally found two seats and I got my books out.


Much to my surprise Vickie’s name was called quickly and she was ushered to the back.  The process was simple, we arrived, stepped up to the counter and Vickie game the man behind the glass her name and age and told him what was wrong.  It was as easy at that.  One thing that I had failed to consider was that Vickie did not have to spend 15 – 20 minutes filling out forms about her health and insurance, forms that have most likely been filled out ten times before. Since no forms were required this meant that they did not have to file the forms, make copies of her insurance card etc.  This saves a tremendous amount of time when there is a room full of sick people at the emergency room.


Why were we able to bypass all of those long and tedious questions about her health and her healthcare provider? Well we can thank socialized medicine for that. The Brazilian constitution grants all citizens the right to procure free medical assistance from public as well as private providers and it will be reimbursed by the government.


Most however would argue that socialized medicine is not the best option, pointing out a few so called myths about socialized medicine. This myths include:  you are not granted equal access to health care, the quality of health care is not higher, you do not have “the right” to health care and that red tape does in fact exist in large quantities under socialized medicine. However, on this particular day in this particular hospital, the emergency room wait was a fraction of the wait that I am used to at my local hospital in the US and not having so much paperwork upon arrival made things immensely easier. I  pleasantly surprised by socialized medicine.

My family arrived this past weekend and we decided that we would rent a car, thus began our adventures on the chaotic roads of Brazil.  However, this fun yet exciting experience for us is just a problem of infrastructure for the Brazilians.  This is one of the main things you must consider when you are either traveling or doing business in Brazil. 


My brother made the comment that this was in fact the country he needed to reside in because he could drive fast and crazy in the cities, more or less, however he pleased.  Driving is always crazier in large cities, but it was especially so in Rio de Janeiro and Sao Paulo. 


I was seated in the back of a cab headed to the airport in Iguaçu Falls, and fortunately my cab driver spoke a great deal of English, so we began talking. He informed me that he had spent many years living and working in the US. Immediately he started to compare the quality of roads and cars in Brazil and the US. One of the first things he commented on was that he drove much slower in his hometown in Brazil than in the US because of the quality and width of the roads. He said that it just wasn’t as safe to go fast because most of the roads were just two lanes and not quite as solid, compounded with the fact that the cars are much smaller vehicles.


The Custo Brazil, or the Brazil Cost is one thing that has plagued the country. This cost refers to both the time and money that it will take to ship something from one area of the state to another.  The lack of infrastructure within the state of Brazil is a huge problem and Brazil needs to put efforts into relieving this problem.  Currently in Brazil they are both privatized and public built roads. And there is a huge difference between the two. This is something differentiates Brazil from the US, private companies can build and operate roads here and that is something that is taking a little while to get used to. Sings are sometimes posted on the side of the road indicated which type of road you are traveling on, but sometimes it is just incredible obvious which type you are on.


In the US when traveling long distances you can normally allot one minute for each mile you have to travel. If you calculate the time it takes to travel in this manner you will usually arrive on time. However in Brazil if it is 100 kilometers away (roughly 40 miles) it may take you anywhere from 1 hour to 4 hours to travel the distance. You just can’t rely on the roads as much as you can elsewhere. They are curvy, bumpy, and overall you just can’t depend on them to be consistent or even well-built.


travelman727 says:
Thanks for the good info and advice! I'm traveling to Brazil in November and I will heed your suggestions.
Posted on: Aug 01, 2006
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photo by: Eric