Aug. 22—Elbridge Colby, the U.S. Under Secretary of War for Policy of the President Donald Trump administration, has gained much deserved notoriety recently for advocating the lowering of the threshold for nuclear war by promoting the production, deployment, and possible use of tactical nuclear weapons.
In an Aug. 10 conference in Manila, Colby further pronounced that the United States intended to contain China by fielding “a fully operational, resilient architecture of denial defense stretching along the First Island Chain…. We will continue to speak softly. But we will continue to carry the world’s biggest stick,” Colby bragged.
He is also widely reported to be the lead author of the Trump administration’s December 2025 National Security Strategy document calling for a return to the policies of President Teddy Roosevelt’s imperial “Big Stick” in order to expel Chinese and Russian interests from the Western Hemisphere, and forcibly seize the region’s assets for the benefit of Wall Street and the City of London.
The biggest target of those neocolonial ambitions in South America is Brazil, which will hold decisive presidential elections on Oct. 4. In light of the Trump administration’s publicly stated intent of preventing the reelection of Brazil’s President Luiz Inácio Lula da Silva by all means fair and foul—most emphatically including launching all-out financial warfare and capital flight against Brazil in the weeks leading up to the Oct. 4 presidential election—urgent attention must be paid to Colby’s wife of 12 years, the Brazilian economist Susana Cordeiro Guerra.
The aptly named Cordeiro Guerra, a graduate of Harvard and MIT, has for many years been close to former Brazilian President Jair Bolsonaro (today serving a 27-year sentence in Brazil for an attempted coup d’état against Lula following the 2022 presidential elections). She is also a leading protégé of former Brazilian Economics Minister Paulo Guedes, who served in that post for the entire presidential term of Bolsonaro, from 2019 to 2023. Guedes named her president of the IBGE (the official Brazilian Institute of Geography and Statistics) from 2019 to 2021, the youngest person to serve in that post, and she maintains close political ties with Guedes to the present, according to numerous Brazilian press outlets.
Cordeiro Guerra was named vice president for Latin America and the Caribbean at the World Bank on Sept. 15, 2025, and is also close to the Trump family. Brazil’s Folha de Sao Paulo reported on July 17, 2025 that Cordeiro Guerra “is a close friend of [President Trump’s daughter] Ivanka Trump and her husband Jared Kushner, who served as senior adviser to her father. Cordeiro Guerra is also godmother to one of their daughters.”
Cordeiro Guerra’s mentor, Paulo Guedes, is quite a piece of work. He is a “Chicago Boy” economist through and through, an advocate of the school of Friedmanite monetarism best known for the deadly austerity they championed in Pinochet’s Chile. Guedes received both an MS and a PhD from the University of Chicago in 1979, studying under Milton Friedman personally. Guedes then taught at the Universidad de Chile during the Pinochet dictatorship. He went on to co-found Brazil’s Banco Pactual (now BTG Pactual) in 1983, today the sixth-largest bank in Brazil by assets and the largest investment bank in all of Ibero-America, with extensive links to prominent international speculative players such as BlackRock.
As Fox Business put it: “Guedes was given the opportunity to implement Friedman’s teachings when he was named to lead the Ministry of Economy in Brazilian President Jair Bolsonaro’s government in 2019.”
How to Stop Wall Street’s Financial Warfare Against Brazil
Brazil is currently highly vulnerable to capital flight and other forms of financial warfare over the next six weeks leading into the Oct. 4 presidential elections, warfare which is being orchestrated by Wall Street and the City of London, with Trump administration help, to prevent the reelection of President Lula. “Foreigners own more than 60 per cent of Brazilian equities [the stock market—ed.], the highest share in emerging markets. This leaves the market exposed to bad news,” the Financial Times reported with a chuckle on July 21, 2026. Furthermore, foreign-controlled Brazilian commercial banks, local pension funds, and domestic investment funds own over 76% of the country’s public debt, and serve as consensual conduits for the international carry trade. That’s the scam whereby major international financial speculators borrow cheap money in Japan and elsewhere, and use Brazilian banks and other financial intermediaries to place the funds in high interest-bearing Brazilian government debt—which today carries a staggering 14% interest rate (the benchmark Selic rate).
With such spreads, Brazilian banks have no incentive to lend to domestic industry or consumers, and every reason to use Brazil’s lack of exchange controls and free convertibility between the real and the dollar to make a speculative killing—at the expense of Brazil’s physical economy. An estimated 25% of the government’s yearly budget is spent on interest payments alone on its $2.1 trillion debt, according to World Bank data.
Among the leading holders of Brazilian government debt are the top private banks, including Itaú Unibanco, Banco Bradesco, Banco Santander, BTG Pactual, Banco XP, Banco Safra, and Sicredi.
There are a number of indications that the financial warfare to prevent Lula’s reelection is already well underway and can be expected to sharply escalate between now and the Oct. 4 election. Since April, the Brazilian stock market has lost $6.1 billion, or 16% of its value, with an acceleration in mid-August; and the real (Brazil’s national currency) has fallen by about 4.2% in relation to the dollar in that same time period.
“The fast-approaching election period has heightened caution toward Brazilian markets among foreign investors, who have been making sizable withdrawals from the country,” Valor reported.
Brazil does have significant foreign reserves (about $369 billion), but its total foreign debt stands at a whopping $856 billion, according to the Central Bank of Brazil, and orchestrated capital flight can wipe out hundreds of billions of reserves in a matter of hours, as numerous countries in the battered Global South can attest.
EIR presented a policy alternative to stop this deadly looting in a June 22 policy memorandum, “Brazil’s Special Role in the Transition to a New International Security and Development Architecture,” which is circulating widely in policy-making circles in Brazil. Two of its central points emphasize:
The role today of the major private commercial banks, which are controlled from abroad, will have to be sharply curtailed. Exchange controls will allow domestic interest rates to be set by the federal government, and not by “the market,” i.e., international financial predators with their threats of capital flight and financial warfare….
A fixed exchange-rate relationship between and among those participating national currencies and the new common currency. Floating exchange rates have been a tool of financial speculation since August 1971, and they are anathema to long-term trade and investment cooperation among sovereign nations.
