Word: dollarization
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Dates: during 1980-1989
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During last October's stock-market crash, Japan advised its investment houses to hold their shares in U.S. companies. The restraint helped keep the collapse from becoming more devastating than it was. Japan performed a similar service in March 1987 when the dollar went into a free fall. In a two-pronged effort, Tokyo fund managers held their U.S. securities, while the Bank of Japan bought dollars to stem the slide. The bank's U.S. currency holdings grew from $1 billion to $15 billion...
Westerners have not so much adapted to their environment as they have defied it and remade it. This has required the region's Senators and Governors to sink deep wells into the federal treasury and draw forth sprawling, multibillion-dollar water-moving and -storage schemes (notwithstanding the popular image of Westerners as self-reliant and suspicious of meddlesome Government). Thus in the midst of the current nationwide drought, the 74 golf courses around Palm Springs, Calif., have plenty of cheap federal water to keep their sprinklers hissing, while Arizona farmers can afford to grow water- intensive crops like alfalfa...
...farmers could freely sell or lease their water rights, profit motives would provide a powerful incentive for conservation. In Arizona, where such "water ranching" is widespread, farmers are drawing top dollar and, in the words of former Governor Bruce Babbitt, "retiring to beachfront condos in La Jolla ((Calif.)) to raise martinis instead of alfalfa." If water rights were widely traded, proponents say, cities and factories could assure their needs for posterity. Agriculture would still receive four-fifths of the West's water and would thrive, despite the increased costs...
...bailing out thrifts over the next three years, an amount it deems adequate for the task provided there is no economic downturn. Yet some experts, including Bert Ely, a Virginia-based financial consultant, believe the cost could exceed $50 billion. They fear that the FSLIC will need a multibillion-dollar infusion from taxpayers to restore the thrift industry to health...
...address in recent years. In particular, there will be a continuing need for the U.S. to finance its unacceptably large trade deficit by borrowing money from investors in other countries. If those investors balk at any time, the result could be another sharp decline in the value of the dollar, accompanied by a steep rise in U.S. inflation and interest rates. That could lead to a worldwide recession and a renewal of the Third World debt crisis. Such economic turmoil would cause severe disruptions in financial markets, which have yet to recover fully from last October's debacle...