Last March the Brazilian government launched a bold attack on a 255% annual inflation rate by freezing prices, raising wages and creating a new currency unit, the cruzado, which was officially pegged at 13.8 to the U.S. dollar. Now the government's war is taking a new turn. Brazilian federal police have conducted dozens of raids across the country aimed at shrinking a rapidly growing black market in U.S. currency. The widespread illegal activity seemed to indicate rising fears among the citizenry that President Jose Sarney's well-publicized anti-inflation campaign might be running out of steam.
Dollars have long served as an inflation...
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