Word: money
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Dates: during 1960-1969
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Rives' toughest negotiations have not been with Sihanouk, however, but with the State Department. Foggy Bottom had completed its 1969 budget before the decision was made to resume relations with Cambodia. As a result, said an aide, "we're having a tough time breaking loose the money. We're on rock bottom." Well, not exactly. Answering the mission's call for supplies with characteristic bureaucratic efficiency, State recently dispatched a C-130 with a batch of supplies that included 30 mattresses but no bedsteads...
...leave? The three who are definitely getting out are frank about it: their three-year contracts will soon be up, and they think their pay is lousy ($750 to $1,500 per week). As Judy Carne puts it, "They're very mean at Laugh-In with their money. You can't go into a toy store that doesn't have Laugh-In dolls-even Laugh-In bubble gum. Somebody is cleaning up on us. Now they have Laugh-In restaurants, Fickle-Finger-of-Fate sandwiches." The dropouts are no slouches in the cleaning-up department, of course...
Right or wrong, that statement is a classic example of the thinking now creating turmoil in U.S. financial markets. Attention has focused on its impact on the stock market, where traders are increasingly depressed by the fear that inflation, and with it tight money, will continue indefinitely. In the past three weeks the Dow-Jones industrial average has dropped almost 50 points, to last week's close of 812, barely above the year's low. Trouble is much worse in the bond and mortgage markets, the nation's primary channels for funneling savings into the construction...
...crisis has been long building. In a current book, The Price of Money, Sidney Homer and Richard Johannesen date the bear market in bonds from 1946, when high-quality corporate debentures sold at interest rates of 2.45%. But the rise in rates and the concurrent drop in bond prices have speeded up enormously since the current inflation began in 1965-and especially this year. Last week, for example, the New Jersey Turnpike Authority sold $137 million worth of bonds at a tax-free interest yield of 7%, compared with a 5⅞ yield on bonds that it had sold four...
...expect continued inflation. That in itself could explosively aggravate the nation's inflationary psychology, which is the basic problem. In the long run, the U.S. simply cannot have healthy long-term capital markets in the midst of inflation. The need to ensure a continued flow of long-term money into houses, schools and other public facilities is thus one of the most important reasons why curbing inflation is the No. 1 U.S. economic priority...