Word: volckerism
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...analysts, however, had sensed that an explosion lay ahead. In August the sparks started flying. On the 13th, with inflation down sharply, Federal Reserve Chairman Paul Volcker unexpectedly announced still another reduction in the discount rate, from 11% to 10.5%; two cuts had already been made. That credibly signaled easier money after almost three years of an anti-inflationary clampdown. On the 15th, Ronald Reagan gave a speech asking for $99 billion in new taxes to reduce the federal deficit. On the 17th, Salomon Brothers' influential economist, Henry Kaufman, predicted that interest rates on long-term Government bonds would...
...transactions. Although he had been predicting a drop in the dollar's value, Regan became alarmed while monitoring the U.S. currency's surge on a desktop computer in his office. He gave the order to intervene quietly on July 29 after talking with Federal Reserve Chairman Paul Volcker and other officials. The U.S. acted with West Germany for one trading day before the other nations joined in last week...
Just to judge from the opposing lineups, it looked like a fierce but unequal contest. On one side stood President Reagan, Federal Reserve Chairman Paul Volcker and many of the mightiest bankers in the U.S. and abroad. On the other side was an unusual left-right coalition that included religious and environmental groups as well as Consumer Advocate Ralph Nader and conservative Congressmen like Jack Kemp. At issue was a plan, already passed by the Senate, for the U.S. to pump an additional $8.1 billion into the International Monetary Fund to help the organization bail out indebted developing countries...
Those favoring the increase insist that the IMF needs the funds to continue propping up shaky nations. The agency is committed to lending more than $10 billion to Brazil, Mexico and other countries this year to keep them from defaulting on their enormous foreign debts. Warned Volcker: "The IMF is at the very center of efforts involving hundreds of banks and dozens of countries to achieve the adjustment necessary to control the international debt situation." Reagan, who has called the boost "important legislation for international economic stability," has been huddling with Congressmen to push the measure...
...interest rates continue to rise, Volcker will probably be blamed, even though the cause may be fiscal rather than monetary policy. Senator Proxmire told the Federal Reserve chairman last week that in his new term he would face "condemnation, denunciation, criticism." Said Proxmire: "You start off with the warm approval of almost everyone, and with the blind high hopes from everyone that somehow you can keep interest rates down." But Proxmire added that this was impossible in view of federal budget deficits. Even superstars cannot do the impossible. Said Proxmire: "You just...