Word: dollar
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Dates: during 1970-1979
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...year. Result: the President, who began the year trying to prod the economy to faster growth, shifted gradually to a tight-budget policy and proclaimed wage-price guidelines that stop just short of mandatory controls. When even those measures failed to stop inflation and the sickening plunge of the dollar, President Carter on Nov. 1 welcomed a sharp increase in interest rates that normally would have violated his populist principles...
...TIME economists generally beLieve the dollar will continue to hold steady next year, or even rise a bit. Big reason: the U.S. trade deficit, estimated at a record $28 billion this year, will drop by anywhere from $6 billion to $12 billion, as the recession cuts into imports. Stability in the dollar, in turn, will help to reduce inflation by holding down increases in prices of imports and of U.S.-made goods that compete against them...
Yale Professor Robert Triffin warns, however, that many foreign holders of dollars, like holders of stocks that have been going down sharply, are ready to sell any time they can get a slightly better price. Says he: "They don't want to sell at the bottom, but each time the dollar moves up a little bit there are lots of people who are just waiting to unload"-and such selling will keep any dollar rebound from going very...
...turnabouts occurred because 1978 was the year when the U.S. ran out of excuses for bad economic policy and performance. The collapse of the dollar drove home the truth that the nation is suffering from shockingly lower investment and productivity than its industrial rivals. (American output per hour worked rose a mere .3% in the twelve months ending last September, a record that one high Administration official calls "an utter disaster.") The trade deficit that looked freakishly large at $26.5 billion in 1977 grew even bigger, and this time it could not be wholly blamed on oil imports -which actually...
...fought for a tough anti-inflation program, and "the politicians," led by Vice President Walter Mondale and Domestic Affairs Coordinator Stuart Eizenstat, who feared that such a program would alienate Democratic voters. Nor did the Administration's moneymen fully appreciate the vicious circle in which inflation weakens the dollar and a drop in the dollar spurs more inflation. Treasury Under Secretary Anthony Solomon, with Blumenthal's support, argued against doing anything to prop the dollar until its rout had degenerated into a panic-by which time the greenback had sunk 18% against the German mark and 26% against...