It's amazing how much complacency there is in the US markets about the effects of the currency crisis in so many parts of the world. No-one is talking Goldilocks any more but yet the market is still close to it's all time high. This came from the (Sunday) Times of London.
BRITAIN's engineering elite will be hard hit by a huge slump in the Latin
American car market, triggered by a crisis of investor confidence.
The collapse in demand will hit the growth prospects of many leading UK
manufacturers, who have ploughed cash into the region since the early
1990s, when Brazil and other governments ended decades of
hyper-inflation.
Deflation is now driving the economic miracle into reverse. Brazil's car
market, one of the region's main engines of growth, accounting for 71% of
sales in Latin America, has been brought close to a standstill by the
government's determination to defend its currency - the real - against
speculators.
The decision to double interest rates and raise taxes sent car sales in the
first 10 days of this month diving 45% from the corresponding period in
October. Now Volkswagen, Ford and General Motors (GM), three of the
four main carmakers in the region, are slashing production to prevent a
stockpile. Fiat, the other big supplier, appears more relaxed, but earlier this
month it closed for a week. |
