Word: bankes
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Dates: during 1970-1979
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Burns reacted by restricting the money supply so tightly that the prime interest rate on bank loans to business shot up to an unheard-of 12% in 1974. And during the slow recovery from the recession. Burns kept money growth moderate, angering liberal Democrats in Congress and giving no help to the upcoming campaign of Gerald Ford, who left Burns pretty much alone. Burns' explanation: "I do not believe I exaggerate in saying that the ultimate consequence of inflation could well be a significant decline of economic and political freedom for the American people...
...thrifty burghers have one of the industrial world's highest savings rates (15% of net income, or about three times the U.S. figure). As a result, fiscal stimuli such as tax cuts do not mean ringing cash registers at department stores but increased deposits in family bank accounts. It is a cycle that must be broken if the West German economy is to lead the rest of Europe out of its current doldrums...
...mysterious millionaires is almost as impressive as its output of oil-and now one of those little-known Saudis has volunteered to start digging Bert Lance out from under his mountain of debts. Ghaith Pharaon, 37, has offered to buy 60% of the stock in Lance's National Bank of Georgia for $20 a share, or about $4 above market value. Whether other stockholders accept or not, Lance will turn over 60% of his 200,000-odd shares to Pharaon and get a check for about $2.4 million...
...Pharaon willing to pay so much for control of a bank that is running in the red, has suspended dividends, and saw the price of its stock sink as low as $8.50 a share before the cash-laden Saudi stepped in? Last week Pharaon met with reporters in Atlanta and brushed aside suggestions that he was trying to win favor with President Carter, who reluctantly last September accepted the resignation of his friend Lance as budget boss. Said Pharaon airily: "Why should I buy influence? If I ever wanted to meet the President, we have ways of meeting him through...
Instead, Pharaon presented the transaction as a straight business deal. U.S. banks, he believes, are ideal investments for an absentee owner. "They are very highly regulated and restricted," says Pharaon, and can safely be left to the management of others. The National Bank of Georgia, he asserts, has intrinsic values, like a location in a prime growth area. Moreover, he sees bright days ahead once various federal investigations are concluded. "It is a turnaround situation that comes very quickly and very fast," says Pharaon. "In fact, we foresee in 1978 that the bank will be very handsomely in the black...