This is a story about how an economist and his buddies tricked the people of Brazil into saving the country from rampant inflation. They had a crazy, unlikely plan, and it worked.

Twenty years ago, Brazil’s inflation rate hit 80 percent per month. At that rate, if eggs cost $1 one day, they’ll cost $2 a month later. If it keeps up for a year, they’ll cost $1,000.

In practice, this meant stores had to change their prices every day. The guy in the grocery store would walk the aisles putting new price stickers on the food. Shoppers would run ahead of him, so they could buy their food at the previous day’s price….

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China is pouring another $7bn (£4.4bn) into Brazil’s oil industry, reigniting fears of a global “land grab” of natural resources.

State-owned Sinopec clinched the deal with Spain’s Repsol yesterday to buy 40 per cent of its Brazilian business, giving China’s largest oil company access to Repsol Brasil’s estimated reserves of 1.2 billion barrels of oil and gas. The whopping price tag for Repsol Brasil ”“ which values the company at nearly twice previous estimates ”“ is a sign of China’s willingness to pay whatever it takes to lock in its future energy supplies and avoid social unrest. It will give the company enough cash to develop all its current oil projects, including two fields in the Santos Basin.

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In an earlier post, I wrote about the emergence of Turkey and Brazil on the world stage. Since then, the ”˜terrible twins’ voted against the Security Council’s latest set of (almost certainly ineffective) sanctions against Iran. The Obama administration had worked hard to get both countries on board; their rebuff dramatized the limits of President Obama’s clout ”” but their isolation on the Security Council (the sanctions carried 12-2-1, with only intimidated Lebanon abstaining) dramatically illustrated something else: the impotence of the terrible twins. Brazilian President Lula and Turkish Prime Minister Erdogan spoke out, but nobody listened.

Brazil and Turkey are learning something that more experienced world players already know: it is easier to make a splash than to make a change, easier to grab a headline than to set an agenda. Both countries can expect a rocky ride for some time; the democratic forces propelling new parties and new movements to the fore reflect domestic constituencies, domestic ideas and, in some cases, domestic fantasies about how the world works. Developing viable foreign policies that take those interests and values into account, but also respond to the realities and necessities of the international system will take time and take thought. At this point, it seems clear that neither the Brazilian nor the Turkish administrations have mastered the challenge.

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When the U.S. government imagines the global future, the term BRIC features prominently. The concept was created in 2001 when researchers at Goldman Sachs identified four critical emerging powers””Brazil, Russia, India and China. By 2050, claimed these experts, the BRIC powers would be challenging the U.S. for worldwide economic supremacy. U.S. officials have taken this forecast very seriously. Hillary Clinton recently listed these four “major and emerging global powers” as vital partners in any future attempts to solve the world’s problems.

The BRIC theory has political, strategic and military implications, but it also raises intriguing questions about the world’s religious future. The BRICs will be the scene of intense debates about faith and practice””about coexistence and rivalry between different faiths; about the proper relationship between religion and state power; and, conceivably, about the use of religious rhetoric to justify an imperial expansion.

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There are new problems on the horizon, just beyond those oil platforms offshore. The real has gained almost 50% against the dollar since early December. That boosts Brazilians’ living standards by making imports cheaper. But it makes life hard for exporters. The government last month imposed a tax on short-term capital inflows. But that is unlikely to stop the currency’s appreciation, especially once the oil starts pumping.

Lula’s instinctive response to this dilemma is industrial policy. The government will require oil-industry supplies””from pipes to ships””to be produced locally. It is bossing Vale into building a big new steelworks. It is true that public policy helped to create Brazil’s industrial base. But privatisation and openness whipped this into shape. Meanwhile, the government is doing nothing to dismantle many of the obstacles to doing business””notably the baroque rules on everything from paying taxes to employing people. Dilma Rousseff, Lula’s candidate in next October’s presidential election, insists that no reform of the archaic labour law is needed (see article).

And perhaps that is the biggest danger facing Brazil: hubris. Lula is right to say that his country deserves respect, just as he deserves much of the adulation he enjoys. But he has also been a lucky president, reaping the rewards of the commodity boom and operating from the solid platform for growth erected by his predecessor, Fernando Henrique Cardoso. Maintaining Brazil’s improved performance in a world suffering harder times means that Lula’s successor will have to tackle some of the problems that he has felt able to ignore. So the outcome of the election may determine the speed with which Brazil advances in the post-Lula era. Nevertheless, the country’s course seems to be set. Its take-off is all the more admirable because it has been achieved through reform and democratic consensus-building. If only China could say the same.

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Last week the four leaders of the Bric countries (Brazil, Russia, India and China) formally met together in their first summit. I have been asked a number of questions about the event. First, did I really think this would ever happen? Second, would it have happened if I hadn’t created the acronym? Third, what real purpose did it serve, and fourth, where do I think the Bric path is heading?

I’ve also beeen asked a couple of supplementary questions: why these four countries and why not Indonesia, Turkey or indeed Iran? And do I think the global credit crisis has changed the picture from our prediction a number of years ago, that the combined GDP of the Bric economies could exceed that of the G7 countries before 2040?

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With public hugs and backslaps among its leaders, a new political bloc was formed yesterday to challenge the global dominance of the United States.

The first summit of heads of state of the BRIC countries ”” Brazil, Russia, India and China ”” ended with a declaration calling for a “multipolar world order”, diplomatic code for a rejection of America’s position as the sole global superpower.

President Medvedev of Russia went further in a statement with his fellow leaders after the summit, saying that the BRIC countries wanted to “create the conditions for a fairer world order”. He described the meeting with President Lula da Silva of Brazil, the Indian Prime Minister, Manmohan Singh, and the Chinese President, Hu Jintao, as “an historic event”.

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Their stories kept him awake through much of the night. The expectant father in his 20s who was to be a witness at his brother’s wedding Saturday. The disbelieving teens who had come to Charles de Gaulle airport expecting to greet family members arriving from Brazil. The woman in her 60s who grabbed his hands, begging him to say there was still hope of finding her child.

“I had to tell them the truth, that in my opinion there was no hope,” said Guillaume Denoix de Saint Marc, weariness evident in his voice.

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Brazil and China will work towards using their own currencies in trade transactions rather than the US dollar, according to Brazil’s central bank and aides to Luiz Inácio Lula da Silva, Brazil’s president.

The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.

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