Word: dollarization
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Dates: during 1980-1989
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...almighty dollar is causing problems at home and abroad...
...country's currency is usually regarded as a symbol of national vitality. A strong currency is seen as a sign of a vibrant, confident country; a weak one is considered an indication that a nation is on the skids. For nearly three years the U.S. dollar has been riding high, perhaps too high and for too long. Now the almighty dollar's very robustness is creating alarm both in the U.S. and abroad. Says Commerce Secretary Malcolm Baldrige: "As the ancient Greeks said, 'An individual's faults are virtues carried to excess.' When the dollar...
Since 1980 the dollar's surge has been all but relentless. Its value has increased 105% in relation to the French franc, 53% against the West German mark and 50% against the British pound. Now America's currency is about 25% too strong for its own good, according to such experts as C. Fred Bergsten, director of the Institute for International Economics in Washington, and Otto Eckstein, chairman of Massachusetts-based Data Resources...
...industrial world. Since the world moved to flexible exchange rates in 1971, efforts by a Third World country to raise its exports have run into a brick wall of currency inflation. This has retarded trade and made repayment of foreign loans far more difficult. Now, with the American dollar in its strongest position in decades, most nations have seen the real value of their currency dwindle nearly to nothing. Keeping up payments on loans thus becomes impossible, financing schemes offered by banks only postpone an inevitable repudiation of debts...
...asked for $8 billion from the U.S. next year, but Congress has proved reticent and has even hinted at broad cutbacks of aid to the World Bank. But with the dollar at such a high value in relation to other currencies, foreign aid will never again be as cheap for Congress, and probably never carry as much good will. Since the only plausible path to repayment of Third World debts lies in real economic growth, it is in the industrial world's interest to step up, rather than contract, the activities...