Word: dollar
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Dates: during 1970-1979
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...more basic reason for the dollar's plunge is a deepening quarrel between the U.S. and its trading partners, West Germany and Japan, over what to do about the soaring U.S. trade deficit. By year's end the deficit is expected to total a stunning $27 bil lion, nearly five times last year's figure. Both Japan and West Germany maintain that the deficit is the result of wanton U.S. consumption of imported oil and that Washington must adopt an energy program that reduces U.S. de pendence on OPEC. The Carter Administration argues that it is doing...
...argument is getting venomous. Europeans are practically unanimous in their conviction that Washington's refusal to support the dollar is in fact a stratagem to force Japan, West Germany and Switzerland to expand their economies or be priced out of the U.S. and other markets altogether. In fact there are already signs that several important sectors of the West German economy are suffering from the rise in the value of the mark against the dollar, which makes German goods more expensive on world markets. Sales of textiles, a major export, are off 3% from last year. Makers of machine...
Washington officials correctly point out that so far this year the 'trade weighted" value of the dollar has dropped only about 2% on average against 15 foreign currencies. Major reason: the greenback has been going up against the Canadian dollar and the Mexican peso, the currencies of two of the most important U.S. trading partners. Some economists also argue that the fall of the dollar should help to shrink the U.S. trade deficit by making U.S. exports cheaper and imports more expensive...
True enough, but the U.S. is paying dearly in international ill will, and the dollar's plunge has undesirable side effects. For example, some countries have been buying up unwanted dollars to keep the price from dropping further; that can increase money supply in the purchasing countries and add to world inflationary pressures. The uncertainty created by the drop could also hurt world trade and investment. Already, U.S. firms buying or selling abroad must haggle about what currency is to be used for payment, and some companies building plants in Europe have had to shell out far more dollars...
...several reasons for the optimism. Truck sales are setting records, indicating that buyers are still in a spending mood. German and Japanese makers are raising the prices of the cars they sell in the U.S. by 3% to 4%, reflecting the rise of their nations' currencies against the dollar and promising less stiff import competition to Detroit. More important, the domestic industry has come up with some hot new or redesigned models. GM has heavily scored with a new four-door Chevette. Ford's Fairmont and Zephyr, which have replaced the Maverick and the Comet in the compact...