Word: dollarization
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Dates: during 1980-1989
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...there so much nervousness in the air? Why is the dread word recession turning up in more and more conversations? The inescapable fact is that the economy is facing dangerous potholes ahead that could badly jolt the expansion or even bring it to a jarring halt. The dollar has plunged to disturbing lows, and interest rates have recently spiked upward. Inflation may be roaring back: last week the Government reported that in April wholesale prices skyrocketed at an annual rate of 8.9%, the worst monthly performance since October 1985. For the same period, industrial production fell by .4%, the steepest...
Though they remain in the minority, a growing number of economists believe the proliferating danger signals may herald a downturn. Says Pierre Rinfret, an economic adviser to President Nixon: "Continued decline of the dollar, coupled with fears of higher interest rates and inflation, will produce a recession before the end of the year." Henry Kaufman, Salomon Brothers' chief economist, suggests that there could be a recession...
...declining dollar, down in value by about 8% against major currencies so far this year, poses the greatest threat to such hopeful scenarios. The weakened greenback has contributed to an increase in inflation, since a falling dollar tends to drive up import prices. But most economists predict that consumer prices will rise this year by no more than 5%. Says University of Minnesota Professor Walter Heller: "I don't think the elements are there for inflation to feed on itself." Still, skittishness about inflation last week led to a dramatic spurt in the bellwether Commodity Research Bureau Index, as investors...
...weakened dollar has already forced up interest rates by reigniting more inflation fears. Investors are now demanding a higher return on fixed-income investments. From mid-March to the end of April, the yield on 30-year U.S. Treasury bonds jumped from 7.5% to 8.5%, a remarkably swift rise. By the end of last week, yields had surged to 8.9%, the highest level in 15 months. The Federal Reserve Board allowed rates to climb in order to prop up the dollar. Higher interest rates bolster the U.S. currency by making dollar-denominated investments more attractive to foreign investors...
...found guilty by an ecclesiastical panel and has then slipped from view. But last week a double defrocking was proclaimed to the world by the national head of the ministers' denomination. The ousted preachers are Jim Bakker, who confessed to adultery last March and then gave up his multimillion-dollar PTL television network and theme park at Fort Mill, S.C., and his former top executive, Richard Dortch, who was accused of orchestrating a cover-up of Bakker's lapse...