Word: dropped
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Dates: during 1940-1949
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...rise, but the demand for many another item was already going down. Example: the dollar value of all retail sales was $109 billion, up 13% over 1946. But the unit volume, i.e., the number of items sold, went down an estimated 10% during 1947. Part of the drop was due to the increase in production, which tended to satisfy demand, and part to the rise in prices. In a free economy, prices can also be a cure for inflation-if a harsh one. As London's Economist put it: "Rising prices and inflation are . . . associated together, like scarlet fever...
...cash to keep the boom going. The U.S. hoped that with the European Recovery Program other nations would get on their feet again, and by their own production close the gap in foreign trade. Result: those in the U.S. who had patiently held off their buying, waiting for the drop in exports to ease the pressure on prices, had to jump back into the market...
...summer's end, businessmen began to build up their inventories. The drop in prices, such as it was, had not lasted long or gone far. Domestic demand began to creep up again. Most significant example: the housing boom, which had been almost busted by high construction prices in the spring, turned into a boom again. By year's end, the U.S. had started an estimated 860,000 housing units (up 28% above 1946) and was building in the last quarter at the rate of well over 870,000 starts a year...
Said a Wall Streeter: "Investors have had a bad psychological shock." The shock was a sudden drop in the price of long-term Government bonds. Last week's drop, over two points in some issues, was the biggest in more than a decade, and it touched off a wave of selling which quickly spread to corporate and municipal bonds. The New York stockmarket, which had been showing signs of a year-end rally, was stopped in its tracks. Cause of all this: a surprise move by the Federal Reserve System which curbed credit...
...letting U.S. bond prices drop, Federal Reserve raised the yield on them slightly. Since Government bonds are the biggest factor in setting interest rates on all forms of business loans, Federal Reserve's action will tend to force up all interest rates. This was a gesture to those who have complained that its failure to use all its powers to curb credit is letting the boom get out of hand. Credit would not be tightened much by the move, but it was a starter...