OK, so Brazil is the eighth largest economy in the world. It does have a population of 160 million. But given that its problems were well-documented, why precisely did a devaluation of the real (a mis-named currency) cause quite the upset that it did?
Back in the summer when Russia was making cowards of us all and the next horror blockbuster out of Hollywood was likely to be called Hedge Funds - The Movie, there was expectation of problems in Brazil.
Interest rates were pushed to stratospheric levels to stave off a crisis brought about by deficiencies in economic management. Deficiencies, mind, not wholesale incompetence. Inflation had been brought down from the rates that epitomise Latin America to something that we in the UK felt capable of understanding.
The problems appeared to go away as the IMF dipped its hand into its pocket and dished out upwards of $40bn (pounds 25bn). Markets recovered their poise. Then came the decision of a provincial state governor to default on debt - or at least to declare a 90-day moratorium on repaying the central government. There was a brief period of disbelief, during which the rest of the world chose to look the other way. Then out went Gustavo Franco, head of the central bank, off went the real - by 9 per cent - and down went the world's stockmarkets.
You could be forgiven for wondering why the market reacted as sharply as it did. One explanation is that the retrenchment of such a large nation as Brazil will have clear implications for the rest of Latin America - Argentina is a 26 per cent trading partner with Brazil - and this can only hasten its descent into the economic mire that has engulfed South East Asia. Indeed, it is fears of a hastening global recession that are behind the market wobble. These fears are overdone. Whatever it is that turns the world economy on its head, it will not be the devaluation of the real.
We have had two shocks so far, yet the US economic juggernaut thunders on. In the biggest consumer-led boom ever, the American economy seems unstoppable. Japan may be in recession, East Asia in turmoil, Russia in the hands of criminal gangs and Latin America going down the tubes - yet the US is inviolate.
When the Mexican peso devalued more than four years ago it did not impact in any meaningful way on America. Nor will the devaluation of the Brazilian real. Yes, there will be problems. With yet another emerging market experiencing problems, finding investment capital will be hard.However, stockmarkets in the developed world can rest easy. As one commentator in a US magazine put it: "We are America, hear us spend." When it all turns quiet, you can join me in the queue for the exit.
Brian Tora is head of the asset management division of Greig MiddletonReuse content