ring a huge rush to pull foreign investment out of Brazil. The Brazilian people had confidence that Cardoso could effectively tame the crisis, as his claim to fame and the feather in the hat of his presidency was his design of the Plano Real (the Real Plan) as Finance Minister under his predecessor president Itamar Franco. With the Real Plan Cardoso tamed inflation that sometimes soared at 5000 percent and created a new currency, the Real, which was pegged into a tightly controlled bracket against the US dollar. Riding the wave of popularity created by a new found buying power for Brazil's poor and effectively widening the middle class, Cardoso seemed to be in control of this powerful country's long perceived grandeur. This aura of control won the 1998 election for Cardoso, even though his most threatening opponent, Lula Inacio da Silva of the Worker's Party (PT) garnered 32 percent of the vote and was widely seen as a loser because he spoke poorly of the Real Plan. As 1998 came to close it became clear that Cardoso was less in control of the country and the Real was not as strong as his election results might have drawn it. The close of 1998 and the first two months of 1999 showed every sign of pending disaster for the Brazilian economy. Foreign investment, at times, left the country at the rate of 3 billion dollars a day and the Real, allowed to float freely against the dollar as dollar reserves became increasingly low, lost as much as 40 percent of its value against the dollar. Overnight Brazilians had lost half of their buying power and the country began to feel the euphoria of the previous four years begin to wear off. Cardoso had crafted a stability plan with the IMF in October of 1998, effectively securing a credit line of 45 billion dollars for the country. However, the floating of the currency in January and the subsequent plunge in the value of the Real meant all debt had to be restructured and a new agreement made w...
