If some Federal Reserve governors get their way and inflate the government out of its debts, triggering a sharp rise in interest rates, taxpayers could be losing even before the defaults roll in.

WSJ: Review & Outlook: Freshman Class President

The test of that will be twofold: how soon Brazil can cut interest rates (which now start at 40%, while inflation is just 3%) without triggering a fresh run on the real, and whether foreign investors will start to look more favourably at the country.

ECONOMIST: Cracking the Brazil nuts