Word: dollarization
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Dates: during 1980-1989
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...value, in a single day of trading. A sharp slump in bank issues helped drive the Dow Jones industrial average to 1103.43, its lowest level in 15 months. In bond trading, prices also sank. Elsewhere, sell-offs rocked the London Stock Exchange, and the high-flying U.S. dollar went into a steep tailspin...
After all the jitters on Thursday, however, financial markets opened calmly on Friday. The dollar strengthened abroad, and the Dow Jones industrial average rose nearly 4 points, to 1107.10. Bank stocks recouped some of their losses from the previous day. The whiff of panic seemed to be over, at least...
Heller warned, however, of several "thunderheads" that could rain on Reagan's re-election effort or generate hailstorms for whoever occupies the White House in 1985. The dangers include rising interest rates, a gargantuan federal deficit, a plunge in the dollar's value, a cutoff of Persian Guff oil supplies, and increasing turmoil in the financial industry as a result of the near collapse of the Continental Illinois Bank and the continuing troubles that major banks are having with loans to Latin American countries...
Perhaps the most serious peril on the price front is the fate of the dollar. For several years, high American interest rates have encouraged foreigners to convert their money into dollars for investment in the U.S. Since 1980, the value of the dollar has risen about 50% against an average of ten major currencies. As a result, imports have become cheaper, and the U.S. is running a record trade deficit that puts downward pressure on the dollar. A steep plunge could kindle U.S. inflation by boosting the price of imports. Warned TIME Board Member Lester Thurow, an economics professor...
When American businessmen complain about unfair Japanese competition, high on their gripe list is the value of the yen. Many executives contend that restrictions in the Japanese financial system have kept the yen artificially cheap compared with the dollar, and thus have made it easier for Japanese manufacturers to keep prices low when selling their products abroad. In a speech in Detroit earlier this month, Chrysler Chairman Lee Iacocca declaimed, "The Japanese yen is undervalued by at least 15%, and everyone in Washington agrees on that...