Word: dollar
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Dates: during 1970-1979
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...fact, the drop aggravates America's inflation. Not only do imports cost more, but U.S. exporters also collect more dollars for their products abroad, and so they sometimes conclude that they can increase their prices at home too. As more American goods flood Europe, Triffin hears the cries rising for protectionism. Americans often overlook the fact that the U.S. enjoyed a $7 billion surplus in trade with Western Europe last year. Because the dollar has become grossly undervalued, many American goods are "cheap" in world markets, and the U.S. is often looked upon abroad with the same suspicion that...
...weak dollar also threatens a flight of capital from the U.S., just when America needs more investment to create jobs, dig for oil and develop all those costly alternative sources of energy. Sure, Europeans and Japanese and Latin Americans have been putting much of their surplus cash into land and factories in the U.S., which they figure is immune to the socialism that infects many of their own countries. But they would invest much more-particularly in the U.S. stock market, which is undervalued and could use the lift from abroad-if the dollar showed signs of recovery. So long...
...also urges the U.S. to float Treasury bonds abroad, selling them to banks, mutual funds and other investors in exchange for strong foreign money. The Treasury would guarantee to repay these loans in the same foreign currencies, so that the creditors would risk no loss even if the dollar fell still further...
...prevent just that, the U.S. would use the new borrowings to buy its own money. This would give the dollar at least a temporary lift and allow the U.S. time to reduce its budget and trade deficits and to enact a policy for developing and conserving energy-all of which will be necessary to restore America's currency to its old eminence...
Europeans are so eager for America to defend the dollar, Triffin argues, that they would willingly make the additional loans. Indeed, he believes that in return for propping the dollar, America could extract a quid pro quo, notably persuading the reluctant West Germans and Japanese to expand their economies in order to enhance world recovery. "It is in the interest of all governments to intervene to lift the dollar," Triffin says persuasively. "The problem simply cannot be left to the tender mercies of the speculators...