Word: outflows
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Dates: during 1960-1969
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Next day the President sent ripples of concern spreading around the world with a sweeping presidential directive designed to slow the U.S.'s gold outflow by curbing U.S. spending overseas. "A definite improvement in our balance-of-payments situation is mandatory," said Ike, "not only to insure our economic well-being and military security here at home, but also to insure that the U.S. can continue as a strong partner in the future economic growth and military strength of the free world...
...balance-of-payments and gold-outflow problem, the U.S. last week got some help from abroad. Responding to heavy pressure from the Eisenhower Administration, West Germany lowered its discount rate from 5% to 4%, and its bank rates for loans from 6% to 5%, thus weakening a magnet that has been drawing gold from the U.S. Kennedy seems sure to insist strongly, as did Ike, that West Germany and other U.S. allies help more in defending the free world against Communism, thus relieving the U.S. of some of its heavy foreign spending...
...credit easing was a routine seasonal matter, but bankers and economists viewed it as a measure clearly designed to aid the static economy. One reason for FRB's caution is that it wants to avoid any sharp change in interest rates lest it step up the U.S. outflow of gold to nations with higher interest rates (see The Solid Gold Problem). Even more important, FRB is moving slowly because, like everyone else, it is unsure about where the economy is going - and whether it needs a nudge or a big push of easier credit...
There is no such easy solution to the major, long-term gold problem that still faces the U.S. It is caused by the steady outflow of U.S. gold, resulting from a huge deficit in the U.S. balance of payments. (The U.S. lost $108 million in gold last week, bringing the total this year to $983 million.) The latest figures indicate that the U.S. payments deficit rose to more than $1 billion in the third quarter...
...Central banks could have prevented the sharp gold rise by selling enough gold to fatten the thin market, since transactions in London amounted to only $25 million daily. But that would have meant purchasing gold from the U.S. Treasury to cover the sales, and thus worsening the U.S. gold outflow -a step the U.S. did not encourage. Some Swiss bankers criticized the U.S. Treasury for lacking the courage to stop the price rise, felt that Treasury could have saved the situation quickly by the dramatic gesture of sending U.S.-held gold to Europe to loosen the tight market. But Treasury...