POR QUE 2026 É O PONTO DE VIRADA DA ECONOMIA GLOBAL? | Market Makers #298

Episode Overview

• This episode provides a long-term economic and geopolitical outlook for 2026, analyzing the global landscape shaped by the US-China relationship and its direct impact on Brazil.
• It explores two major strategic opportunities for Brazil arising from global shifts: developing its vast rare earth mineral reserves and establishing a regulated carbon credit market.
• The discussion delves into Brazil's domestic challenges, arguing that structurally higher interest rates and a severe fiscal imbalance are the country's most pressing economic issues.
• It offers a critical perspective on the "clean energy" transition, highlighting the significant environmental costs and complex supply chains involved in producing alternative energy technologies.
• The conversation concludes by outlining specific, though politically challenging, solutions to Brazil's fiscal crisis, focusing on the necessity of cutting spending in social programs and tax expenditures.

Key Concepts

• 2025 Global Review: The year was dominated by international uncertainty stemming from the Trump administration's aggressive tariff policies and the resulting US-China trade standoff.
• Rare Earths Geopolitics: The conflict exposed America's strategic dependence on China for refined rare earth minerals, a dominance China acquired after General Motors sold its refining patents in the 1990s.
• The "Dirty" Side of Clean Energy: The conversation reframes "clean energy" as "alternative energy," emphasizing the significant socio-environmental costs and carbon footprint associated with mining, refining, and manufacturing components like wind turbines.
• Brazil's Carbon Market Potential: Brazil has the opportunity to create a billion-dollar carbon credit market, but its development is stalled by a lack of congressional regulation, despite a government strategy to align with European frameworks.
• Germany's Geopolitical Shift: Germany is cautiously moving away from its post-WWII policy of military restraint, evidenced by the return of mandatory military service and permission for foreign bases, signaling a major change in European security dynamics.
• Structurally Higher Interest Rates in Brazil: The country's neutral interest rate has likely risen to a new equilibrium between 9% and 10% due to higher global rates, persistent public debt, and domestic market inefficiencies.
• Brazil's Fiscal Dilemma: To stabilize its debt, Brazil must generate a primary surplus of 2-3% of GDP. With tax hikes considered unfeasible, the only path is through spending cuts.
• Major Areas for Spending Cuts: Two primary targets for fiscal adjustment are the combined R$300 billion annual cost of social transfer programs (Bolsa Família and BPC) and the country's tax expenditures, which at 7% of GDP are more than triple the OECD average.
• The Productivity Trap: Tax regimes designed to help small businesses, like Simples Nacional, can inadvertently discourage companies from growing, leading to a loss of scale, productivity, and international competitiveness, as seen in Italy's experience.

Quotes

• At 0:38 - "É muito legal como ele enxerga o mercado de uma maneira muito mais distante do momento atual... ele consegue ter uma visão bem de longo prazo." - Host Thiago Salomão explaining why Stephan Kautz is the ideal guest to discuss long-term perspectives.
• At 7:53 - "O que definiu esse ano de 2025, que está fechando agora, foi o internacional... o presidente Trump assumindo lá nos Estados Unidos e trazendo uma carga muito grande de incertezas no cenário internacional." - Stephan Kautz summarizing the key driver of the year's economic landscape.
• At 12:51 - "Ele descobriu que ele não tinha o leverage, né, a alavancagem que ele achava que ele tinha em relação à China. E aí, basicamente, a China jogou a carta das terras raras." - Stephan Kautz explaining the limit of Trump's tariff policy against China.
• At 15:00 - "Quem tinha o monopólio de tratamento das terras raras, não só de exploração, mas o monopólio de refino das terras raras no mundo, era uma empresa chamada General Motors." - Stephan Kautz revealing the surprising historical origin of China's dominance in rare earth refining.
• At 22:15 - "Hoje tem duas gigantescas na mesa pra gente, pro Brasil se beneficiar. Essa das terras raras... e o segundo... que é a discussão dos créditos de carbono." - Stephan Kautz outlining the two major economic opportunities for Brazil in the new global landscape.
• At 23:07 - "Só que a gente precisa de uma regulamentação que tá no Congresso." - The speaker identifies the primary bottleneck holding back the development of Brazil's carbon credit market: the need for clear regulations.
• At 26:19 - "Esse troço aqui, no fim da vida dele, ele não vai ter pago a pegada de carbono que ele gerou pra ser construído." - Recounting an anecdote from the series "Landman" to illustrate the significant carbon footprint involved in the entire lifecycle of a wind turbine.
• At 52:16 - "Porque a gente não sabe quem vai estar no poder na Alemanha no futuro. Imagina se volta um cara que é um déspota... A gente não pode aceitar isso." - The guest sharing his German cousin's explanation for why Germany refrains from dominating European policy, citing a deep-seated fear of its own history.
• At 54:09 - "Exército voltando a ser obrigatório na Alemanha... o governo permitindo que você possa voltar a ter bases do exército alemão fora da fronteira da Alemanha, isso não era permitido." - Highlighting major recent breaks from post-WWII military restrictions in Germany.
• At 58:22 - "Então a gente está falando que o juro no Brasil hoje de equilíbrio seria alguma coisa entre 9 e 10." - The guest presents his core economic thesis that Brazil's neutral interest rate is now structurally in the high single or low double digits.
• At 59:00 - "A gente tem dois Bolsa Família no Brasil hoje." - Explaining that the combination of the Bolsa Família and the BPC amounts to R$300 billion in annual income transfers, creating significant fiscal pressure.
• At 1:01:36 - "O 'bet' no Brasil hoje é maior do que o mercado de food service no Brasil... Isso é uma discussão que a gente pode ter depois, que tá provavelmente gerando uma mega distorção de consumo." - A striking comparison illustrating a major shift in Brazilian consumer behavior.
• At 1:02:11 - "Tem os dois pontos. Acho que ele precisa fazer o que ele tá fazendo... Vamos errar mais para um lado do que para o outro." - Endorsing the Central Bank's tough monetary policy as both economically necessary and a politically astute move to build credibility.
• At 80:29 - "A gente precisa encontrar aí dois, três pontos percentuais do PIB de resultado primário." - Stephan Kautz explaining the magnitude of the fiscal adjustment needed to stabilize Brazil's debt.
• At 82:55 - "Hoje no Brasil a gente gasta 7% do PIB em gastos tributários. A média dos países da OCDE é de 2% do PIB." - Kautz quantifying the significant gap in tax expenditures between Brazil and developed nations.
• At 85:03 - "O que que aconteceu? Você acabou com os grandes conglomerados na Itália." - Kautz using Italy's experience with small business tax benefits as a cautionary tale about how such policies can hinder corporate growth.
• At 88:55 - "Surgiu uma proposta de um corte linear. Todos... todos vão ser reduzidos. Aí você pune menos um específico e todo mundo corta um pouquinho de cada um." - Suggesting a politically more feasible way to reduce tax expenditures by applying a small, gradual cut across all sectors.
• At 106:34 - "A change is gonna come." - Kautz names the Sam Cooke song that he listened to most this year, reflecting on the current global moment of significant change.
• At 111:32 - "E aí eu fui doar o sangue e eu sempre tinham me pedido antes para doar sangue... E, obviamente, me senti muito culpado nessa época." - Stephan Kautz sharing a personal story about the importance of donating blood.

Takeaways

1. Capitalize on geopolitical realignment by actively pursuing strategic opportunities in sectors like rare earths, where global supply chains are shifting away from China.
2. Prioritize and expedite the regulation of the carbon credit market to unlock a massive new source of investment and position Brazil as a leader in the green economy.
3. Evaluate energy projects based on their entire lifecycle impact, recognizing that "alternative" energy sources have significant environmental and carbon costs that are often overlooked.
4. Acknowledge that Brazil's interest rates are unlikely to return to previous lows soon; financial planning must adapt to a new reality of structurally higher rates.
5. Support monetary policy that prioritizes long-term credibility and inflation control, even if it means short-term economic pain, as this is crucial for stability.
6. Understand that Brazil's long-term economic health depends fundamentally on fiscal reform; monetary policy can only manage symptoms, not cure the underlying problem.
7. Confront the need for difficult conversations about the sustainability of social programs and the efficiency of the massive spending on tax benefits.
8. When designing tax policies, carefully consider the long-term impact on business productivity and scale to avoid unintentionally stifling national competitiveness.
9. For politically sensitive reforms like cutting subsidies, a broad and gradual linear cut across all sectors may be a more viable approach than targeting specific groups.
10. Pay attention to emerging geopolitical trends, such as Germany's changing military posture, as they are leading indicators of future shifts in global power and security alliances.
11. Remember the importance of personal responsibility and generosity, such as donating blood, as a grounding counterpoint to macroeconomic and political discussions.