The fiscal framework is gone. Brace yourselves.

Current Brazilian treasury bills have skyrocketed in returns - a clear sign that the Brazilian government is desperate for cash.

A country's treasury bills are, supposedly, the safest asset to own: they are backed by the country's trust and reputation, and the capacity to print money or coerce funding through taxation.

This time, in particular, the situation is worse. The government knows it cannot lower interest rates - because it has to comply with inflation targets. Through taxation, there is no economic boom or anything growing in the country that could provide more funding. We're bare bones here already. So here is the current predicament: following the framework to the letter is impossible. For years in a row, the federal government has stacked a fat bill of incompetence, increased spending, and irregular spending outside of what was provisioned and approved in Congress.

This sinkhole is estimated to be around R$390 billion or approximately $76.78 billion USD. The lower figures are speculated to be around R$160 billion, almost half of that.

Where the f*** did this money go?

2023: R$93 billion debt interest

2024: R$29 billion Rio Grande do Sul's emergency aid, R$40 billion debt interest

2025: R$10 billion public companies deficit, R$5 billion armed forces, R$40 billion debt interest, R$3.30 billion pension fraud refunds, R$9.5 billion US tariffs subsidies and ease

2026: R$57.8 billion debt interest (estimated)

See the pattern here? Removing the spending one could justify: natural disasters and tariffs, the amount left is around: R$200.8 billion.

The pattern is: spending without provisioning to pay for debt, no sensible running of public companies, increased spending with increased taxation concurrent with 15% interest rate - choking economic activity.

We are headed straight for disaster.

Farmers and businesses are struggling to finance themselves and pay their own debts

This is happening as a result of increased taxation, 15% interest rate, natural disasters, and utter neglect of the Economic Ministry.

The bill proposed in 2023, PL 5122, that attempts to decrease interest rates applied to farmers' debt, just got approved in Senate and is moving to Congress for consideration. The federal government already stated that it will veto it - and resort to the Supreme Court to override it all.

The federal government's primary goals seem to be: increase public spending, throw debt interest payments outside of budget planning - to make room for this spending, probably - ruining public companies and throwing the bill outside of the budget as well, keep interest rates high so that it masks the inflation under all this spending, thus terminating economic growth entirely.

The Brazilian economy today is smaller than it was in 2008-2009. We have to keep in mind that the Real BRL was worth 3x more at that time. Brazil has to change this pattern.

If you pay just enough attention to all of this scenario, and you withdraw your money from this mess, and if you are a significant number - significant enough for the treasury to take notice - this happens:

But it is too late. People started noticing that the most secure asset in Brazil - Brazilian treasury bills - appear to be not so secure after all.

It displays a federal government that does not do its due diligence, acts in desperation, does not plan for the future, and wants to spend it all NOW - and enjoys the approval it gets from it.

The next months will unravel a tragedy that was foretold many times before, and no one with the power of the pen listened. But do they even want to listen at this point? Did they ever want to at all?