Word: franc
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WELL, he did it again. Everyone, including his Finance Minister, thought Charles DeGaulle would finally be forced to devalue the franc. It was sheer economic idiocy to assume that France could possibly maintain the parity of the franc. So of course Le Grand Charles refused to devalue...
...crisis of the franc, like most currency crises, was a thing of the mind. The economy of France is basically healthy: its balance of payments is sound; its unemployment rate is fairly low; productivity has been rising at a reasonable rate. The franc was in peril because enough of those holding it as currency were afraid it would...
...fact, the franc's plight was perhaps more a result of the strength of the Deutsche Mark than any weakness of its own. West Germany has been running large balance of payments surpluses regularly and has been regularly forced to sell marks to maintain the parity of four marks to the dollar. The mark is certainly under-valued, out the Kiesinger government is understandably reluctant to revalue upwards. To do so would make German goods more expensive on the world market and undercut the prosperity West Germans have been enjoying for the past two years--and it would...
...single out some nation, or group of individuals, as responsible for the situation would be absurd. It is true that the lack of confidence in the franc can be traced directly to the May upheaval. It brought about a major outflow of gold, and the large pay increases demanded--and received--were the immediate cause of a cost increase bound to weaken France's international trade position. That line of reasoning can easily conclude in an indictment of French students and workers...
THEN THERE are the Germans. The franc was not the only currency being attacked by speculation; the currencies of many other nations--particularly of the pound--were placed under strain by the desire to convert into marks. That pressure could have been relieved by a prompt revaluation of the mark, but the Germans played coy with the money markets, issuing occasional pronouncements to the general effect that everyone should ignore the speculation and it would finally go away. They knew it was costing the French $800 million in gold per day to maintain the parity of the franc--and they...