Flow of Funds Analysis (1971): The status of flow of funds analysis in 1971 is revealed in the popular textbook, 'Investment Analysis and Portfolio Management', Jerome B. Cohen and Edward D. Zinbarg, published by Richard D. Irwin Inc. in 1967.

The authors wrote:

"The object of sources and uses of funds analysis is to quantify the individual supply and demand forces at work in the money and capital markets, and thereby to determine whether the balance of forces lies in the direction of higher or lower interest rates. ...

Since, by definition, sources and uses of funds must always balance, it may be wondered how such tabulations can be useful in forecasting interest rates. After all, changes in interest rates, like changes in prices, come about because of imbalances in supply and demand. Unsatisfied demands for funds pull interest rates upwards, and pressures of excess supplies push them down.

Admittedly, it would be very helpful to have statistics on ex ante sources and uses of funds, which would reveal such imbalances. But even a balanced ex post framework can be useful. The analyst ... develops a 'feel' for the ex ante gap between supply and demand."

In other words, the economists at the time were still trying to make sense out of the flow of funds accounts by applying price-quantity graphs from Economics 101, assuming that the size of the supply or demand 'gap' would reveal the direction of prices.

This is considerably different from Capital Flow Analysis, which ignores the supply-demand 'gap' and postulates that price movements are explained by differences in motivation between buyers and sellers, focusing on explaining of the nature of this motivation, rather that seeking a will-o-the-wisp ex ante gap.

In the 1971 Brazilian Bubble, the gap between flows from 157 funds and the queue of new issues could actually be measured, but this was not the same as the real gap between supply and demand for equities, because potential flows into mutual funds and speculator's accounts were not in the picture.

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Human Rights Violations (1964-1979) : The Brazilian government, under Law 9140 of 1995, promised to pay indemnities for those human rights violations during the period 1961-1979 in which the government could be shown to be culpable.

Since then, there has been considerable debate as to number of actual victims of military rule, with claims ranging between 300 to 1,000 individuals.

During the years of military government, it has been shown that there indeed were instances of kidnapping, torture, and murder.

Most victims were members of revolutionary groups associated with communist ideology and armed insurrection.

Most deaths occurred during the 1970s when militant groups were robbing banks, bombing buildings, killing people, and kidnapping ambassadors at gun point.

These were bloody times: the United States, Brazil's ally in the fight against communist, had killed over one million people in the War in Vietnam.

In 1965, the year following the Brazilian counter-coup in which not a single person was injured, there were race riots in the Watts district of Los Angeles, California that took the lives of 34 people, injured 1,100, and caused over $100 million in property damage.

In 1968, American war atrocities in My Lai made headlines.

Also in 1968, airline hijackings in the U.S. increased, with many incidents of hijackers seeking to return to Cuba.

In the same year, race riots in Washington D.C. burned one thousand buildings and left 12 people dead.

In 1970, American soldiers fired on students at Kent State University.

I lived in Brazil during this period and was immersed in the life and culture of the country.

The memories I have of the years 1964-1979 are those of a country at peace, with safe streets, and beautiful, unspoiled beaches, contrasting with the violence that seemed to be rule most of the world, including the United States.

In daily life, I met many people during these years, from all walks of life.

Although I heard a few vague allusions to human rights violations by the government, I never met anyone that had first hand knowledge.

People did not seem to be afraid of criticizing officials or the military and there was no feeling of living in a repressive regime.

During these years, there was, of course, periodic labor unrest, strikes, and popular protests, as in other countries. All countries suffer from violence and abuse of power, and any characterization of Brazil in the 1960s and 1970s needs to be put in perspective.

• If there were 1,000 victims of human rights violations, as claimed, during this fifteen year period, this would be about 70 cases per year, or about 0.7 cases per 100,000 people.
• In comparison, in the United States there are about 2.7 victims of murder by gunshot per 100,000 people.

Obviously, the Brazilian government did not publish names of victims in the newspapers, while the names of some murder victims in the United States are published.

The point is this: just as I did not have first hand knowledge of human rights abuse during the military years, neither have I had first hand experience of murder by gunshot in the United States.

It doesn't mean that such things don't happen, only that the frequency of such events simply does not effect the life of most people.

In contrast, when I return to Rio de Janeiro today, I find that almost everyone I meet has been a victim of violent crime, often with bodily harm. By allowing crime and violence to rule the streets, a whole country is now terrorized.

At any random social event in Rio de Janeiro, you may ask the question, 'Who has been attacked on the streets?', and you will find that almost everyone in the room will raise a hand.

Sadly, almost all of these crimes will have taken place not during the years of 'military dictatorship', but instead during the years of the 'return of democracy' when things were supposed to have gotten better.

During the 1960s and 1970s, the level of violence that was common in the 1990s was unheard of and would have been unimaginable.

In contrast to the 'repressive military regime' of the 1960s and 1970s, today's 'democratic' regime of police 'death squads' kill, according to the United Nations, four children each day in Brazil.

This means that under 'democracy', the level of human rights abuse against innocent children is today at least twenty times higher than the military violation of human rights of communist militants during the 1970s.

Unfortunately, leftists that dominate the academic community have rewritten much of Brazilian history of the 1960s and 1970s and have distorted the reality of living during that period, suggesting that life was worse than at present, when, in fact, for the ordinary person, the opposite was true.

Of course, if one's occupation is robbing banks, kidnapping ambassadors, or hanging out with armed terrorists, leftist historians have a point.

My impression of the human rights record of Brazil during the 1960s and 1970s, based on having lived through the period, is that relative to the size of the population, Brazil's record is similar to that of Singapore or South Korea, except that the military in Brazil did not have a permanent strong man to push long-term programs like public education.

Certainly, the level of civil violence was less than in the United States during those years.

Brazil's military did create a true Economic Miracle and had a far better human rights record than repressive regimes in Argentina or Chile, where the number of victims, relative to population, were 15 to 150 times the level in Brazil.

Some leftist now claim that there was no Economic Miracle and that this is just propaganda of the far right.

In this they resemble those who insist there was no holocaust in Nazi Germany.

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