Word: greenback
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Dates: during 1970-1979
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Five years have now passed since the world's major industrial nations abandoned fixed exchange rates for the dollar, and the warnings of Cassandras that the end result could be global currency chaos seem uncomfortably close to coming true. Scarcely a week goes by without the once mighty greenback reeling from a fresh thrashing on the money markets; and when it does steady, as it did in Europe last week (see ECONOMY & BUSINESS), no one can trust the stability to last. Though the effects of this beating remain of only peripheral concern to most Americans-unless they travel abroad...
...breathing space between dollar crises used to be measured in years, but now it has been cut back to weeks. If last December's tumultuous plunge of the greenback was the worst since the currency upheavals of 1973, its place in the recordbooks was short-lived indeed. Last week the dollar bears were again on the prowl, clawing the bleeding buck to new and worrisome lows against the Japanese yen and nearly all the major trading currencies of Europe...
...contradictions appear to mirror an equally mixed-up management of the economy by the Carter Administration. Policy zigged from talking up a tough tax reform to abandoning most of it, zagged from professing unconcern about the dollar's slide to intervening actively in currency markets to prop up the greenback. Noting Carter's propensity for listening first to one economic adviser, then to another, Washington wits began quoting, accurately or not, a scathing description of Franklin Roosevelt supposedly offered by Economist John Maynard Keynes: "The President is like a big, fluffy pillow. He bears the imprint of the last person...
...Government's decision two weeks ago to intervene in foreign currency markets to keep the value of the dollar from sinking too fast has halted the rapid decline of the greenback, at least temporarily. But some foreign moneymen think that the U.S. is being too timid in buying up unwanted dollars. Meanwhile, the effort to bolster the buck is having unfortunate side effects. In order to make U.S. currency more attractive to foreign investors, the Federal Reserve Board has raised American interest rates another notch.* It boosted the discount rate, the charge imposed on Federal Reserve loans to member...
...Operations of multinational companies. They get some benefit from a weaker greenback because profits earned in, say, West German marks or Swiss francs are worth more dollars to be sent back to the parent company in dividends, though this can be offset by the greater dollar operating costs abroad. Also, American-owned multinationals have been slowing down investment abroad. One reason is the sluggishness of European and Japanese economies. The drop of the dollar has added another reason, by increasing the amount of dollars that multinationals must spend to build, buy or expand foreign factories. Weakened American investment abroad prolongs...