Brazil: Taking the Pledge

In 25 years of uninterrupted inflation, Brazil's businessmen have slipped into many bad habits. They raise next week's capital by increasing this week's prices. They buy at any cost and sell at any cost, trusting the ever-higher prices of inflation to see them through their carelessness and inefficiency. Last year prices skyrocketed so much (85%) that sales began to slacken and money grew scarce. Result: Brazil's businessmen have had to live with a severe shortage of capital. Taking advantage of this situation, Brazil's revolutionary government is trying to use one problem as the bait for solving another—hoping that way to...

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