And while the state-backed oil giant can tap one of the most dynamic growth stories in the world, Petrobras faces the dual problem of pricing restrictions and mountinginflation.
Mountinginflation will also put pressure on Fed Chairman Ben Bernanke and his program of quantitative easing, dubbed QE2, devised to spark inflationary expectations. (Read Distressed Debt Investors Prefer Real Estate in 2011).
While this helps to contain inflation in an import-dependent economy, further rapid capital inflows could trap Manila in a vise that's increasingly common in developing Asia rapid currency appreciation (which would argue for lower interest rates to deter excess capital inflows) versus mounting asset inflation (which would require higher interest rates).