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Are Brazilians of German descent assimilated into the larger Brazilian culture, or do they still live as immigrants in ethnic enclaves sticking to their old ways?
There isn't really a larger Brazilian culture. People from the south speak as if they had absolutely nothing to do with people from the northeast. You should hear them talk about "Nordestinos".
My in-laws came from a small, very German town called Panambi, near Porto Alegre in Rio Grande do Sul. It was formerly known as Neu Württemberg. In fact, my mother-in-law's parents were among the original founders of the town in the early 20th century, and she was born there. My father-in-law came there from Germany in 1949.
At that time, virtually everyone in the town spoke German and church services were held in German. The children learned Portuguese, but the older people conducted their lives almost entirely in German until they died. My in-laws came to the US in the mid-1960s, but they kept in touch with a large number of extended family and friends still in Brazil. Over the years, a couple of them who were about my age came to visit or even stay with them for months or years and I got to know them.
One friend had a German father (he was a "Kepler"--also a founding family of the town) and Brazilian Portuguese mother. He was a native Portuguese speaker but knew little German. Another had two German parents; she and her sisters were all fluent in both languages. My understanding, though, is that the Portuguese language has basically taken over. There are still a lot of German names and buildings with German-inspired architecture, but just as in the US, as the original generation has died out the language is gradually being lost.
My husband's brother has lived in Germany for many years now, and his children were born and raised there. His son, age 19, is currently studying in the US, and living with my mother-in-law a few miles from us. He told us that "Oma"'s German speech and ideas of German culture and customs are very old-fashioned and not at all the way things are in Germany today. This is what happens when an ethnic community is isolated far from their native country. The language and so forth become fossilized and if the people living there were to go to Germany, they would find it very different from their expectations.