Examine individual changes

'@@ -11,39 +11,39 @@ == Background == -Throughout the 19th century the maturation of technological innovations, especially the development of [[rail transport]], [[gas lighting]] and [[steamships]], among others, all linked to the process [[industrialization]], created opportunities for large speculative movements, leading to an acceleration of the flow of [[Financial capital|capital]] in the world.<ref>Luis Nassif, "Os Cabeças-de-Planilha" ("Inbox thinkers"; How in Brazil at end of 20th century, the mainstream economic thought repeated its same mistakes of a hundred years before") {{pt icon}} Ediouro 2007 {{ISBN|978-85-00-02094-0}} Pages 20 & 21</ref> <br> -And despite a considerable native capital volume have been released with the prohibition of the [[Atlantic slave trade|slave trade]] in 1850, at the same time when [[Irineu Evangelista de Sousa, Viscount of Mauá|Baron of Maua]] laid the modern [[banking]] system in Brazil; decades later at [[República Velha|beginning of the Republic]], the Brazilian economy was still tied through, among other things, by a restrictive economic legislation that mainly due respectively to the 1850 "Land Law" and the "Barriers Act" of 1860, inhibited the access to land ownership by former slaves and [[immigrant]]s in a time where agriculture was predominant economically in the country,<ref>John Schulz, "The financial crisis of abolition" [[Yale University Press]], 2008 Chapters 2 to 4</ref><ref>Nassif 2007 Ibidem page 77</ref> and tied for decades the development of Brazilian financial markets, with them having become at that time, a kind of [[Oligopoly|"notary oligopoly"]] under the control of few families.<ref>Marta Barcellos & Simone Azevedo; "Histórias do Mercado de Capitais no Brasil" ("Histories of Financial Markets in Brazil") {{pt icon}} [[Elsevier|Campus Elsevier]] 2011 {{ISBN|85-352-3994-4}} Introduction (by Ney Carvalho) & page 22</ref><br> -Proposed changes in land legislation for example, was one of the reasons why large landowners and former slaveholders supported the establishment of the republic.<ref name="Schulz">Schulz 2008 Ibidem</ref><ref>Nassif 2007 Ibidem page 79</ref> In this political environment, economic and social under the pretext of promoting the process of industrialization of the country, occurred the Encilhamento. +Throughout the 19th century the maturation of technological innovations, especially the development of [[rail transport]], [[gas lighting]] and [[steamships]], among others, all linked to the process of [[industrialization]], created opportunities for large speculative movements, leading to an acceleration of the flow of [[Financial capital|capital]] in the world.<ref>Luis Nassif, "Os Cabeças-de-Planilha" ("Inbox thinkers"; How in Brazil at end of 20th century, the mainstream economic thought repeated its same mistakes of a hundred years before") {{pt icon}} Ediouro 2007 {{ISBN|978-85-00-02094-0}} Pages 20 & 21</ref> <br> +In spite of considerable volume of native capital volume being released with the abolition of the [[Atlantic slave trade|slave trade]] in 1850 - at the same time when [[Irineu Evangelista de Sousa, Viscount of Mauá|Baron of Maua]] was lying the foundations of the modern [[banking]] system in Brazil - decades later at [[República Velha|beginning of the Republic]], the Brazilian economy was still being held back by, amongst other things, restrictive economic legislation - notably the 1850 "Land Law" and the "Barriers Act" of 1860, which inhibited the access to land ownership by former slaves and [[immigrant]]s in a time where agriculture was economically predominant in the country,<ref>John Schulz, "The financial crisis of abolition" [[Yale University Press]], 2008 Chapters 2 to 4</ref><ref>Nassif 2007 Ibidem page 77</ref> and tied for decades the development of Brazilian financial markets, with them having become at that time, a kind of [[Oligopoly|"notary oligopoly"]] under the control of few families.<ref>Marta Barcellos & Simone Azevedo; "Histórias do Mercado de Capitais no Brasil" ("Histories of Financial Markets in Brazil") {{pt icon}} [[Elsevier|Campus Elsevier]] 2011 {{ISBN|85-352-3994-4}} Introduction (by Ney Carvalho) & page 22</ref><br> +Proposed changes in land legislation were one of the reasons why large landowners and former slaveholders supported the establishment of the republic.<ref name="Schulz">Schulz 2008 Ibidem</ref><ref>Nassif 2007 Ibidem page 79</ref> In this political, economic and social environment, under the pretext of promoting the industrialization of the country, occurred the Encilhamento. === Leading figures === -*Big [[Rentier capitalism|Rentiers]]: holders of the native ''"big money"'', who go after the best [[rate of return]] for their capital. In Brazil of late 19th century, were predominantly big landowners, former slave dealers and owners, merchants, businessmen and tradesmen (especially those involved with [[Coffee]] and [[Cotton]] exports), senior civil servants, politicians and lawyers with influence in formulation and implementation of [[Public policy|public policies]]. They basically kept their financial resources treasured in the country, with the most sophisticated investing in foreign [[financial market]]s, mainly in the [[Paris Bourse|Parisian Bourse]], [[London Stock Exchange|City of London]] and [[Wall Street]];<ref>Nassif 2007 Ibidem, page 28</ref> -*[[Financier]]s: institutional [[Trader (finance)|traders]] and [[investment Banker|investment bankers]] working for the ''big money'', having contact with big business, having learned new forms of [[financial engineering]]. In Brazil of that time, the most illustrious figure was the [[Counselor Mayrink]];<ref name="Nassif">Nassif 2007 Ibidem</ref> -*[[Economist]]s/[[politician]]s: They are the makers of [[political economy|economic policies]], usually are also the middlemen of the rentiers, financiers' interests, eventually acting as junior partners of them, providing [[rhetoric]] to the [[public opinion]] and the technical means to implement a [[Regulatory agency|regulatory model]] that serve their interests. Of them, Rui Barbosa was the prominent figure of that time in Brazil;<ref>Nassif 2007 Ibidem; pp 28 & 29</ref> -*Haute Finance: The big world financial capital, which from the mid-19th century were already organized to influence in the life of nations in order to create the "ideal" environment" for their business.<ref>[[Karl Polanyi]], [[Joseph E. Stiglitz]] & Fred L. Block; "The great transformation" Beacon Press books 1957 {{ISBN|0-8070-5643-X}} Chapter 1</ref> From that time, highlight the British banks led by [[Rothschild banking family of England|Rothschilds]].<ref>Nassif 2007 Ibidem; p.29</ref> +*Big [[Rentier capitalism|Rentiers]]: holders of the native ''"big money"'', who went after the best [[rate of return]] for their capital. In Brazil of the late 19th century, these were predominantly big landowners, former slave dealers and owners, merchants, businessmen and tradesmen (especially those involved with [[Coffee]] and [[Cotton]] exports), senior civil servants, politicians and lawyers with influence in formulation and implementation of [[Public policy|public policies]]. They stored their financial resources in the country, with the most sophisticated investing in foreign [[financial market]]s, mainly in the [[Paris Bourse|Parisian Bourse]], [[London Stock Exchange|City of London]] and [[Wall Street]];<ref>Nassif 2007 Ibidem, page 28</ref> +*[[Financier]]s: institutional [[Trader (finance)|traders]] and [[investment Banker|investment bankers]] working for the ''big money'', having contact with big business and having learned new forms of [[financial engineering]]. In Brazil of that time, the most illustrious figure was the [[Counselor Mayrink]] ([[pt:Francisco de Paula Mayrink|pt]]);<ref name="Nassif">Nassif 2007 Ibidem</ref> +*[[Economist]]s/[[politician]]s: They are the makers of [[political economy|economic policies]], usually also the middlemen of the rentiers and financiers' interests, eventually acting as their junior partners. They provided [[rhetoric]] to the [[public opinion]] and the technical means to implement a [[Regulatory agency|regulatory model]] that served ''big money''<nowiki/>'s interests. Rui Barbosa was the prominent figure of that time in Brazil;<ref>Nassif 2007 Ibidem; pp 28 & 29</ref> +*Haute Finance: The global financial moguls, which from the mid-19th century were already organized to influence the life of nations in order to create the "ideal" environment" for their business.<ref>[[Karl Polanyi]], [[Joseph E. Stiglitz]] & Fred L. Block; "The great transformation" Beacon Press books 1957 {{ISBN|0-8070-5643-X}} Chapter 1</ref> From that time, highlight the British banks led by [[Rothschild banking family of England|Rothschilds]].<ref>Nassif 2007 Ibidem; p.29</ref> == Execution == -The 1st step of encilhamento took place during the end [[Empire of Brazil|Monarchy]] under the command of Viscount of Ouro Preto, the last finance secretary of that period, when it was regulated a new Banking Act, in November 1888. A rise in the [[Rio de Janeiro Stock Exchange]] that had already boomed in 1886 accelerated with the [[Lei Áurea|abolition of slavery]] two years later, having reheated again with the measures implemented by the new banking law (that reversed the 1860 "Barriers Act"), and in 1889 the proposed changes for the Land and Real State laws. Along with the increase in [[market liquidity]], there was the introduction of modern financial mechanisms, enhancing the financial [[Leverage (finance)|leverage]] possibilities. The reduction in the issuance of [[government bond]]s has also opened space for the expansion of [[stock]]s issues.<ref>Nassif 2007 Ibidem; pág.81</ref> All this, slowly led to an increase in speculation and inflation in general, embracing all economic sectors, from the [[currency|currencies]] to [[real estate]],<ref>"[[Alfredo d'Escragnolle Taunay, Viscount of Taunay|Viscount Taunay]]; "O Encilhamento; scenas contemporaneas da Bolsa do Rio de Janeiro em 1890, 1891 e 1892" ("The Encilhamento: contemporary scenes of Rio Stock Exchange in 1890, 1891 & 1892") {{pt icon}} Editora Melhoramentos, Rio 1893</ref> creating minor bubbles into a big one. +The 1st step of Encilhamento took place during the final years of the [[Empire of Brazil|Monarchy]] under the command of Viscount of Ouro Preto, the last finance secretary of that period, when a new Banking Act was enacted in November 1888. The [[Rio de Janeiro Stock Exchange]] which had already boomed in 1886 had accelerated with the [[Lei Áurea|abolition of slavery]] two years later and again with the measures implemented by the new banking law (that reversed the 1860 "Barriers Act"), and again by the proposed changes for the Land and Real Estate laws in 1889. Along with the increase in [[market liquidity]], there was the introduction of modern financial mechanisms, enhancing the financial [[Leverage (finance)|leverage]] possibilities. The reduction in the issuance of [[government bond]]s has also opened space for the expansion of [[stock]]s issues.<ref>Nassif 2007 Ibidem; pág.81</ref> All this, slowly led to an increase in speculation and inflation in general, embracing all economic sectors, from the [[currency|currencies]] to [[real estate]],<ref>"[[Alfredo d'Escragnolle Taunay, Viscount of Taunay|Viscount Taunay]]; "O Encilhamento; scenas contemporaneas da Bolsa do Rio de Janeiro em 1890, 1891 e 1892" ("The Encilhamento: contemporary scenes of Rio Stock Exchange in 1890, 1891 & 1892") {{pt icon}} Editora Melhoramentos, Rio 1893</ref> combining minor bubbles into a big one. -In this environment, the Viscount of Ouro Preto decided to create an institution to act as regulatory agency for the financial market, a ''private'' [[central bank]] in the European manner, a reserve bank, a monetary authority of liquidity. The fact that Rui Barbosa had been a great opponent of such system, accredited him to be appointed by the military as finance secretary, when they imposed the republic.<ref>[[Gustavo Franco]], "Crônicas da convergência" ("Chronicles of convergence") {{pt icon}} TopBooks 2005 p.16</ref> Ironically, when took office, soon after the [[Proclamation of the Republic (Brazil)|proclamation of the Republic]], he put into practice all what he had criticized before. In January 1890 he enacts a new banking law, inspired by the ideas of the counselor Mayrinck, his banker and personal friend, who he appointed as head of the new Central Bank, without even consulting the president, signing the bill late at night in a scandal that would be the first of a series until his departure from the secretary. +In this environment, the Viscount of Ouro Preto decided to create an institution to act as a regulatory agency for the financial market, a ''private'' [[central bank]] in the European manner, a reserve bank, a monetary authority of liquidity. The fact that Rui Barbosa had been a great opponent of such system, accredited him to be appointed by the military as finance secretary, when they imposed the republic.<ref>[[Gustavo Franco]], "Crônicas da convergência" ("Chronicles of convergence") {{pt icon}} TopBooks 2005 p.16</ref> Ironically, when he took office, soon after the [[Proclamation of the Republic (Brazil)|proclamation of the Republic]], he put into practice all what he had criticized before. In January 1890 he enacted a new banking law inspired by the ideas of counselor Mayrinck, his banker and personal friend, who he without consulting the president appointed as head of the new Central Bank, signing the bill late at night in a scandal that would be the first of a series until his departure from the secretary. -This however didn't stop the enacting of the new law, despite the protest and opposition from secretaries like [[Demetrio Ribeiro]] and [[Manuel Ferraz de Campos Sales|Campos Sales]], who predicting the consequences of measures, got a central bank to [[São Paulo (state)|São Paulo]].<ref>Gustavo Franco, "Reforma monetária e instabilidade durante a transição republicana" ("Monetary Reform and instability during the republican transition") {{pt icon}} [[BNDES]] 1987 pp. 112 and 114</ref> +This however didn't stop the enacting of the new law, despite protests and opposition from secretaries like [[Demetrio Ribeiro]] and [[Manuel Ferraz de Campos Sales|Campos Sales]], who predicting the consequences of measures, got a central bank to [[São Paulo (state)|São Paulo]].<ref>Gustavo Franco, "Reforma monetária e instabilidade durante a transição republicana" ("Monetary Reform and instability during the republican transition") {{pt icon}} [[BNDES]] 1987 pp. 112 and 114</ref> -The unregulated speculation rose as direct reflection of the new law and although had reached all major sectors of the economy, especially over currency trading where it picked its highest volume; was in the rogue trading on IPOs, despite its legality, that occurred the main political disaster of the process, due the leniency of the new banking law that allowed authorized issuers act freely, without any supervision or official punishment.<ref name="Schulz"/><ref>Ney Carvalho 2004 Ibidem; pág.174</ref> An example of such issues occurred not only when a company went to the IPO without any economic fundament to support it, but also whenever it needed more money, just issued new subscriptions. The investor who wouldn't answer to the new offerings, lost the rights to the old ones and all the money paid previously.<ref>Schulz 2008 Ibidem; pág.84</ref> <br> -Since the new law tied to trade rights to their nominal values, there was no official oscillation of stock prices, and consequently, no way to negocitate them directly in the Stock Exchange in order to both [[Order_(exchange)#Stop_orders|minimize losses]] or [[Profit maximization|maximize profits]]. This in practice not only restricted the trading of securities to the [[Over-the-counter (finance)|OTC market]], congesting it by supply, but also led to a deadlock for new issues in the stock market, preventing those legitimate business that could take off out of the process, besides causing a total loss to many inexperienced investors.<ref name="Schulz"/><ref>Ney Carvalho 2004 Ibidem; pág.146</ref> +Unregulated speculation rose as a direct consequence of the new law and reached all major sectors of the economy, with its highest volume reached in currency trading. The majority of political fallout has however been generated by rogue IPOs - as the new banking law effectively allowed authorized issuers to act freely, without any supervision or official punishment.<ref name="Schulz"/><ref>Ney Carvalho 2004 Ibidem; pág.174</ref> For example, a company without any capital could launch an IPO, but also whenever it needed more money it could simply create new shares - with existing stakeholders losing rights to their stake if they refused to purchase any.<ref>Schulz 2008 Ibidem; pág.84</ref> <br> +Since the new law tied stock prices to their nominal values, there was no official oscillation of stock prices, and consequently, no way to negottate them directly in the Stock Exchange in order to both [[Order_(exchange)#Stop_orders|minimize losses]] or [[Profit maximization|maximize profits]]. This in practice not only restricted the trading of securities to the [[Over-the-counter (finance)|OTC market]], congesting it by supply, but also led to a deadlock for new issues in the stock market, preventing those legitimate business that could take off out of the process, besides causing a total loss to many inexperienced investors.<ref name="Schulz"/><ref>Ney Carvalho 2004 Ibidem; pág.146</ref> -Instead of help to promote [[economic growth|growth]] and [[structural change]] in the economy, the process led to one of the worst inflation outbreaks of the country's history, while the Brazilian economy suffered violent "collapse".<ref>Gail D. Triner; "Banking and economic development: Brazil, 1889–1930" Palgrave™ 2000 {{ISBN|0-312-23399-X}} Pages 44–74</ref><ref>Murilo de Carvalho Ibidem 1987</ref> The Encilhamento [[Straw that broke the camel's back|Last Straw]] came with the financial shock wave caused by the [[Default (finance)|default]] of Argentine government bonds following the 1st collapse of the [[Barings Bank|Bank Baring Brothers]] in the ending of 1890, and although the burst has been initiated then, it occurred in a slowly way, until 1892.<ref name="Triner">Triner 2000 Ibidem</ref><ref>Gustavo Franco 1987 Ibidem, pp. 41-42 and 127</ref><ref>Maria Eulalia L. Wolf, "História do Rio de Janeiro; do Capital comercial ao capital industrial e financeiro" ("Rio History: from commercial to industrial & financial capital") {{pt icon}} IBMEC 1978</ref><br> On January 20, 1891, Rui Barbosa stepped down as finance secretary to head two companies that were created during the Encilhamento and which he had partnership with the Counselor Mayrink.<ref>Needell 1987 Ibidem; p.84</ref><ref>Nassif 2007 Ibidem; p.104 3rd paragraph</ref> General Deodoro da Fonseca resigned on 23 November of that year, during the [[Brazilian_Naval_Revolt#The_1st_naval_revolt|1st naval revolt]], under imminent threat of deposition by the Republicans, represented by Vice President [[Floriano Vieira Peixoto|Marechal Floriano Peixoto]], who assumed "naturally" the presidency. +Instead of help to promote [[economic growth|growth]] and [[structural change]] in the economy, the process led to one of the worst inflation outbreaks in the country's history, while the Brazilian economy suffered violent "collapse".<ref>Gail D. Triner; "Banking and economic development: Brazil, 1889–1930" Palgrave™ 2000 {{ISBN|0-312-23399-X}} Pages 44–74</ref><ref>Murilo de Carvalho Ibidem 1987</ref> The Encilhamento's [[Straw that broke the camel's back|Last Straw]] came with the financial shock wave caused by the [[Default (finance)|default]] of Argentine government bonds following the 1st collapse of the [[Barings Bank|Bank Baring Brothers]] in the ending of 1890, and although the burst has been initiated then, it occurred in a slowly way, until 1892.<ref name="Triner">Triner 2000 Ibidem</ref><ref>Gustavo Franco 1987 Ibidem, pp. 41-42 and 127</ref><ref>Maria Eulalia L. Wolf, "História do Rio de Janeiro; do Capital comercial ao capital industrial e financeiro" ("Rio History: from commercial to industrial & financial capital") {{pt icon}} IBMEC 1978</ref><br> On January 20, 1891, Rui Barbosa stepped down as finance secretary to head two companies that were created during the Encilhamento and which he had partnership with Counselor Mayrink.<ref>Needell 1987 Ibidem; p.84</ref><ref>Nassif 2007 Ibidem; p.104 3rd paragraph</ref> General Deodoro da Fonseca resigned on 23 November of that year, during the [[Brazilian_Naval_Revolt#The_1st_naval_revolt|1st naval revolt]], under imminent threat of deposition by the Republicans, represented by Vice President [[Floriano Vieira Peixoto|Marechal Floriano Peixoto]], who "naturally" assumed the presidency. == Aftermath == -The success of the new stage of economic development, that in theory intended Encilhamento, depended on to be able to create an enabling environment both regarding the relocation of domestic savings, as foreign investments.<ref>Nassif 2007 Ibidem, p.27</ref> <br> -However, due to the extraordinary powers conferred to [[monetary authority|monetary authorities]], the private interests in Encilhamento just overlapping the [[public interest]]. So, instead of a slow and steady promotion of development, economic growth, [[distribution of wealth]], financial [[Financial literacy|literacy]] & confidence; what occurred was an increase in [[Wealth concentration|concentration of wealth]], overvaluation of [[profiteering (business)|profiteering]] at the expense of productive activity, widespread of [[bankruptcy]], as well as of the ignorance and distrust about how politics and markets works, in addition to the geometric increase of [[debt]] and economic stagnation.<ref name="Nassif"/><ref>Chazkel 2008 Ibidem</ref><ref>Maria Alice R. de Carvalho, "República no Catete" ("Palatial Republic") {{pt icon}} Museu da República / FAPERJ pág.95 2001</ref> <br> -So, are pointed out three main reasons for the failure of this speculative movement as a lever for development:<ref>Nassif 2007 Ibidem, pages 34 and 35</ref> +The success of the new stage of economic development that Encilhamento was intended to be depended on being able to create an enabling environment for both the relocation of domestic savings and introduction of foreign investments.<ref>Nassif 2007 Ibidem, p.27</ref> <br> +However, due to the extraordinary powers conferred to [[monetary authority|monetary authorities]], the private interests in Encilhamento overtook the [[public interest]]. So, instead of a slow and steady promotion of development, economic growth, [[distribution of wealth]], financial [[Financial literacy|literacy]] & confidence; what occurred was an increase in [[Wealth concentration|concentration of wealth]], overvaluation of [[profiteering (business)|profiteering]] at expense of productive activity, widespread [[bankruptcy]], as well as ignorance and distrust regarding how politics and markets work, in addition to the geometric increase of [[debt]] and economic stagnation.<ref name="Nassif"/><ref>Chazkel 2008 Ibidem</ref><ref>Maria Alice R. de Carvalho, "República no Catete" ("Palatial Republic") {{pt icon}} Museu da República / FAPERJ pág.95 2001</ref> <br> +The three main reasons for the failure of the movement as a lever for development are as follows:<ref>Nassif 2007 Ibidem, pages 34 and 35</ref> * Lack of a broader statesman to coordinate, correct and adjust the process in its progress; * The choice of politicians and financiers who led the process, as their personal interests overlapped the country one; -* The fascination with [[Get-rich-quick scheme|"get-rich-quick schemes"]], both by the monetary authorities of that time, who worked to benefit themselves, as well as by the crowd of average amateurs who acted more like [[daydream]]ing [[gambler]]s rather than sober speculators, hurting themselves by let being manipulated, helping to inflate a financial bubble, participating of the process without having the least vocation, knowledge and experience required<ref>Taunay 1893 Ibidem</ref> to don't neglect legal details and use personal [[Trading strategy|trading strategies]] with proper [[Enterprise risk management|risk]] and [[Money_management#Trading_.26_Investment|money managements]],<ref name="Triner"/> which would have prevented countless bankruptcies and its harmful consequences. +* The fascination with [[Get-rich-quick scheme|"get-rich-quick schemes"]], both by the monetary authorities of that time, who worked to benefit themselves, as well as by the crowd of average amateurs who acted more like [[daydream]]ing [[gambler]]s rather than sober speculators, hurting themselves by letting themselves be manipulated, helping to inflate a financial bubble, participating in the process without having the least vocation, knowledge and experience required<ref>Taunay 1893 Ibidem</ref> to not neglect legal details and use personal [[Trading strategy|trading strategies]] with proper [[Enterprise risk management|risk]] and [[Money_management#Trading_.26_Investment|money managements]],<ref name="Triner"/> which would have prevented countless bankruptcies and their harmful consequences. -Following the effects of the [[Boom and bust|bust]], came the usual period of [[Witch_hunt#Metaphorical_usage|"witch hunt"]] that lasted until 1895, when especially during the tenure of Floriano Peixoto, some Encilhamento prominent figures had for example their assets frozen, seized, beyond have been prosecuted publicly and administratively. Among these, was Rui Barbosa, who had to go into exile in Europe.<ref name="B&A">Barcellos & Azevedo 2011 Ibidem</ref><br> -Also, the legislation concerning the financial markets in Brazil, in a vain attempt to control their [[Volatility (finance)|volatility]], at a time when the concept of [[Nassim_Taleb#Philosophical_theories|Antifragility]]<ref>[http://www.edge.org/q2011/q11_3.html#taleb Definition]</ref><ref>[http://ssrn.com/abstract=1669317 academic paper] by [[Nassim Taleb]]; [[Polytechnic Institute of New York University]], September 2010</ref> was unknown, suffered violent setback to the time of the "Barriers Act", having only get rid of it, 70 years later in 1965.<ref name="B&A"/> +Following the effects of the [[Boom and bust|bust]], came the usual period of [[Witch_hunt#Metaphorical_usage|"witch hunt"]] that lasted until 1895, when especially during the tenure of Floriano Peixoto, some prominent figures in the Encilhamento period had their assets frozen, seized and have been prosecuted publicly and administratively. Among these was Rui Barbosa, who had to go into exile in Europe.<ref name="B&A">Barcellos & Azevedo 2011 Ibidem</ref><br> +The legislation concerning financial markets in Brazil, in a vain attempt to control their [[Volatility (finance)|volatility]], at a time when the concept of [[Nassim_Taleb#Philosophical_theories|Antifragility]]<ref>[http://www.edge.org/q2011/q11_3.html#taleb Definition]</ref><ref>[http://ssrn.com/abstract=1669317 academic paper] by [[Nassim Taleb]]; [[Polytechnic Institute of New York University]], September 2010</ref> was unknown, suffered a violent setback to the era of the "Barriers Act" - the restrictions only being loosened 70 years later in 1965.<ref name="B&A"/> Although the bubble burst has happened between 1890–92, their economic and political effects were made throughout the decade,<ref>James D. Henderson, Helen Delpar, Maurice P. Brungardt & Richard N. Weldon; "A reference guide to Latin American history" M.E.Sharpe Inc. 2000 {{ISBN|1-56324-744-5}} p.172</ref> with only in the end of the Campos Sales administration, with [[Rodrigues Alves]] in charge of the Brazilian economy, been decreased, but at a high social cost,<ref>Murilo de Carvalho 1987 Ibidem, p.21</ref> due to the [[economic policy]] of [[austerity]] taken in accordance with requests of the big international capital.<ref>Needell 1987 Ibidem; p.17</ref> '