Brazilian Crisis Hits Home
It is a town that loves its country music, but it isn't Nashville. It isn't even in the United States. It is Sao Paolo, Brazil.
CBS News Correspondent Richard Schlesinger reports the U.S. exports music and much more to Brazil, roughly $16 billion worth in 1997. And it all just got a lot more expensive because Brazil devalued its currency. Which means the members of a band called Silver Dollar will notice real dollars are harder to find and their favorite music is harder to afford.
Country Singer Christophe explained about buying American CDs, "We don't buy CDsÂ… We don't have money."
That is going to be a common complaint if things continue as they are. And not just from Brazilians but for Americans who might never have thought about this country.
"If you look at the normal pension fund of the average worker who has any pension at all, it's going to be invested in companies that have important stakes in Latin America," said Gary Hufbauer of the Institute for International Economics.
Stock trader Julio Mora handles some of those investments for American clients. He is pessimistic.
He said he does not worry about something bad happening to him because his money is at Citibank and Bank of Boston.
He is lucky because he bought dollars a while ago before the Brazilian currency crashed.
"I would say that we are like cliff-walkers... every day is different from other days. It's difficult to make it here, you know," said Mora.
Imagine doing business in a place like Brazil. One day the currency is devalued, the next day it's floating freely. Then there are predictions of lower interest rates but the government turns around and raises them. All that happened in just one week.
Maurice Costin is a business leader who has been explaining the new economic rules, even though he is not so sure he understands them himself.
Costin says he keeps doing business "by instinct."
If this group can't afford American music or jeans or boots, that is a small problem. But if big business can't afford to buy American, that's big. And the fear is the currency crisis will hit everyone from the Silver Dollar band to a billion dollar industry.
Reported by Richard Schlesinger
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