Today September 15, 2014 the prestigious and largest Brazilian newspaper, Folha de São Paulo, informs that 50% of all, not big nor small, but of all  Brazilian companies have unpaid debts. It totals 3.5 million companies, the largest payments crisis ever.

Where I work the accounting manager confirms these numbers; never the company had so many customers asking for extensions, further discounts or simply not paying. He calls it "Argentinization" referring to our neighboring country, which is  historically a bad, very bad, payer.

Companies like Ambev, the Brazilian branch of InBev (beverages giant, at home in Belgium) has in some cases more than 2.000 unpaid bills, simply telling the supplier: wait or you are out. After waiting for 120 days, the small company I work for decided to take stronger measures against the company. The amount was paid, but we were immediately expelled as suppliers (...).

A Swiss chocolate giant adopted a similar strategy,  90 days is the minimum acceptable schedule for their payments...

But worse: confirmed orders are now simply cancelled because negotiated up front payments are not performed.

The Brazilian equipment manufacturing companies are fading away in this double front war. Against bad payers and cheap imports.

The Abimaq, Brazil´s syndicate for machine building companies linked to Fiesp, the Industry Federation, states that 70% of all new equipment sold in Brazil is imported (and 40% of these 70% come from China...).

The last 12 years of administration were run by a leftist government, spending honest billions but corruption never allowed the actual use of the money for needed infrastructure projects. Practically no new roads constructed, ports are still chaotic, only a few airports were sold to private operators and unfortunately billions were spent on now absolutely useless soccer stadiums.

Apparently at this stage the "coin dropped" as we say and everybody is looking in to the purses, but they are empty...

As elections are closing in, the worker´s party government is spending 300.000.000 dollars every day to an approximate 25.000.000.000 total, in order to keep the American currency in good shape against the Brazilian Real; and keep foreign investors happy. But this month, even doing so, the US dollar climbed 4,5%. In fifteen days...

The Brazilian horror is back: inflation!

But the strange thing is: nobody cares. God will help, the regular answer.

Quite similar to our stoic comprehension regarding the sad statistics of crime, us being the most violent country in the world. We represent 2.86% of the world´s population. But 20% of all violent death happen in Brazil.

And nobody cares...

Hermógenes de Castro & Mello.