Next Step : Brazil Gets <i> Real</i> . . . About Its Currency : On July 1, the inflation-battered nation will swap all its old money for new in a bold experiment.

In a heavily guarded building just outside this city’s grimy dock district, a special operation is being carried out. Eleven men pile neatly packaged bricks of currency on a vibrating countertop.

One by one, the bricks, weighing about six pounds each, jostle forward along the surface and, reaching the edge, plunge into the glowing belly of a furnace waiting below.

Twelve hours a day, the work crews coax more and more bank notes--Brazil’s cruzeiro real --into the fire. Outside, a constant plume of white smoke issues from a single chimney, announcing their destruction.

The pot-holed entryway leading up to the building’s huge iron gate is crawling with armed guards. They shoulder M-16s and wear .38s on their hips. Cellular phones bulge from their trouser pockets.

They might not have bothered. It’s not that this money is totally worthless. If a thief could get past the guards, he could bag quite a treasure--but he’d have to spend it fast. For the irony is that Brazil’s incendiary inflation rate is licking at the value of money by the hour, and the currency is almost worthless by the time it enters the furnace.

On July 1, Brazil authorities hope, this will all change. The cruzeiro real will be laid to rest, and from its ashes will rise the real .

More than a sense of deja vu plays at memories here. Since 1986, five currencies have burnt out. But in previous schemes, old currency was phased out gradually as a new one began to circulate. For the first time in this country’s history, all the currency will be swapped on a single day.

Citizens have been given the rest of this month to turn in their cruzeiros for the new reals before the changeover. Merchants also have until July 1 to convert their prices. Bank accounts will automatically be switched to the new currency, which will be pegged in value to the U.S. dollar. The Central Bank is well stocked; 27 billion reals (about $27 billion) have been minted.

With the real , Brazilians hope a modicum of sanity will finally dawn on one of the world’s most calamitous economies.

Last year, Brazil logged 2,500% inflation. Last month, alone, prices rose by 45%. Brazil’s is not quite the world’s worst inflation rate; Bosnia-Herzegovina, Serbia and Zaire share that dubious honor.

However, it may be the only nation of this infamous club that has flirted with hyper-inflation and somehow managed not to plunge into chaos or civil war.

This rise and fall and rise of so many monies has dizzied Brazilian consumers and punished the economy, but one factory is working at breakneck pace--the Casa da Moeda, the Brazilian mint.

Artists have found steady employment in fashioning designs for an ever growing roster of notes. Each new note comes stamped with one of a veritable pantheon of national heroes, from barons to biologists.

But each has met an ignoble end, losing face as their denominations lose value.

The new real , by contrast, will feature the fauna and flora of Brazil, but not because the mint has run out of heroes. So quickly was the real scheme concocted, the Central Bank claims that it did not have the time to secure legal releases from illustrious families to use the images of their famous relatives.

“You don’t need permission from animals,” said Antonio Carlos Meda of the Central Bank.

Through the years, each new currency has come with newly minted promises of economic stability. Each time inflation has come roaring back.

There may not be many more chances to get it right.

“Every economic plan that fails gives people reason not to believe in the next one,” political scientist Walder de Goes said.

Although no one wants to bet on the long-term viability of the real plan, hope holds that this currency will be a lasting one, maybe even the last. Many companies are already doing their homework to prepare for seismic changes that low--or no--inflation would bring to their lives.

First, however, the country will have to mend its old ways. For years, Brazilians liked to believe that they had mastered the art of living, even prospering, with soaring prices.

The country successfully staved off the worst effects of rising prices through indexing, or constantly ratcheting up wages, rents, and other volatiles with the ever higher cost-of-living indexes.

As the prices of everything, from movie tickets to machine tools, sped more or less together along the fast lane, the reasoning went, then no one was really run down by inflation. Fantasy, said the economists.

“It’s like telling a man to relax because his wife gets home every day at the same time. Four a.m.,” said the acerbic Delfim Netto, who was planning minister 15 years and eight currencies ago.

The tragedy is that Brazil got used to inflation. Some Brazilians even got comfortable with it. They were the people of means, who bedded down their capital in funds and bonds that climbed in value from dusk to dawn. People like bankers.

For sure, lending money in times of high inflation means risk, and the higher the risk the steeper the premium on the banks’ capital.

But most Brazilians are out of this league. Their modest wages do not qualify them for these high-ante assets. They must make do with passbook savings that barely keep up with inflation.

Meanwhile, banks capture these “unprotected” cruzeiro reals and lend them out again--mostly to the government, which is always starved for capital--and pull in double or so the amount a day later.

Playing this money margin, what bankers call the float, has assured the financial sector a fortune from inflation. Brazil’s six largest banks earned $5.8 billion simply by managing the float, said Carlos Daniel Coradi, a Sao Paulo auditor specializing in banks.

If inflation plunges, the float will all but vanish.

The adjustment will be painful, especially for overextended state-owned banks. Hundreds of branch agencies and as many as 4,000 layoffs are expected.

Then why in the world would anyone want inflation to end? The perversity of inflation is that virtually everyone, from the corner baker to an automobile maker, became a lay banker, not for love of money but simply to make ends meet.

Lawrence Pih explains. Pih moved to Sao Paulo from his native Taiwan as a boy, and inherited his father’s wheat milling company, Moinho Pacifico.

The Pihs have done well in their adopted home. Moinho Pacifico has a lean 260-employee shop, no debts and solid markets. Tall, impeccably dressed, with a wine-colored Mercedes in the garage, Pih emanates prosperity.

Last year, while many businessmen were just trying to hang on, Moinho Pacifico made a killing. Not on wheat--that was a disaster--but on playing the inflationary money-go-round.

“I lost $1.6 million milling wheat,” Pih said, “but closed the year $3.6 million in the black. Speculative profits.”

Pih took cruzeiros from wheat sales, invested the funny money in high-yielding accounts, made back a fortune and bought newer, better machines.

“For me, inflation has been fantastic,” he said. “For the country, it’s a disaster. It’s turned me into an engineer of interest rates. This is totally unreal. But all of us had to behave this way, in order to survive.”

Some do not. A year ago, Carlos Coradi placed a small ad in the newspaper announcing counseling for companies looking to buy or sell or merge.

“I got a shower of phone calls,” he recalled, shaking his head. “Ninety percent of them were sellers. Many of them were desperate and many of them came just to moan about their awful situation. It was like psychotherapy.”

But the skeptics, who are legion, say the real plan is nothing but a political ploy, meant to boost its creator, former Finance Minister Fernando Henrique Cardoso, who also happens to be running for president in the Oct. 3 elections.

Yet, unlike the previous economic schemes, whipped up in closed rooms and then released half cooked, the real plan was more carefully confected. For months, in fact, the details were negotiated item by item with Congress.

The injection of a stronger currency into the market will of course make consumers feel richer, and that will trigger a burst, maybe even a boom, of buying. Unchecked, that could lead quickly to more inflation.

Currently, however, Brazil is weathering a mini-recession which gives industry slack time to meet rising demand without resorting to price hikes.

The down side is that although the real may stop the upward spiral of inflation, prices may remain parked at penthouse levels.

There are also real doubts as to whether the government has curbed its own appetite. It was unchecked government spending that undermined the bold plans of the past.

Brasilia reportedly has the cash--thanks to a $16-billion emergency fund--to get through 1995 without ringing up the mint for more.

But along with the white smoke, a whiff of expectation, even optimism, laces the air these days.

Front-running candidate Luiz Inacio Lula da Silva, of the leftist Workers Party, has of course roundly denounced the plan as cheap electioneering.

Yet he also has taken care to say, if he’s elected and the plan is working, he would not tamper with it.

And no wonder. “Lula,” who is 48, is part of a generation that has never known a day without inflation. It is the Brazilian workers, the class he champions, who punch in and watch their wages turn to ash while others make profits in their sleep.

Although Brazil has been diagnosed as a culture addicted to inflation, a consensus seems to have emerged that it is time to break the habit.

Time, you could say, for the country to get real . If not, one more currency will go up the chimney.