Economic collapse in Brazil, which is Latin America’s largest economy, could precipitate serious trouble in other Latin American countries and then reverberate back around the globe to deepen the trouble of Asia, including Hong Kong, China and Japan.
Another round of deepening deterioration would surely put intense downward pressure on the US economy by cutting our exports, depressing equity markets and weakening investor and consumer confidence. As Chairman Alan Greenspan has said, we cannot expect to be an “oasis of prosperity” in a deteriorating world economy.