European Stars And Stripes Newspaper Archives Feb 23 1961, Page 11

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European Stars And Stripes (Newspaper) - February 23, 1961, Darmstadt, HesseUncle Sam s gilded Strai if j paid Little attention to Gold abruptly apparent that it a major role in world affairs cot meet a staff writer $2 billion of Amer gom has passed into for is in the past six months like this Ever happened of the Kennedy admin armed with a Batch of doing something about it the Bullion Haemorrhage Lowed in the months ahead. Or they can t be sure event the Odds seem to favor their first half of 1960, for the Treasury was jubilant. The Gold Drain amounted$144 million. Then came the ". Gold Supply currently Isle s17 billion the lowest. 1939. President Kennedy his state of the Union that foreigners wonder whether our Gold reserves will sufficient to meet our Obi however. In a special Mes i Congress on the Gold prob added the situation is one i concern but not panic is the Rote of Gold in they and How did Uncle Sam if tied up in a gilded Jet recently most americans be attention to Gold because they could t own any. Be weren t sure Gold was Irant 1945 46 47 48 49 50 51 52 h 53 54 55 fs6 57 5s 59 ?60 current g Jan. Feb. Jan. Abruptly it became a that Gold still plays a major t world-affairs.,. Countries still fix the value Ribeir currency in relation to states for example is Worth .888761 Grams of that figures out to $35 an in individual you can t sex i your dollars for Gold. How governments and their Banks can do just that be Gold traditionally recon is a storehouse of enduring is used in the settlement of is Between one country i system has led directly tit . Gold Drain because spend invest and give More Money than they there is in Short a chronic in the uj3. Balance of inter payments which is Settle through transfers of Gold foreigners collect More Dollar spend they can invest dollars in the United state them for Gold. They shown a preference for was t the Case in the earlier february 23, 1961 postwar years. Other nations the were Short of both Gold and dollars. However they preferred dollars be cause they could spend them on re construction or invest them andean interest. The Dollar seemed fully As Good As Gold and More useful so Uncle Sam sat with his huge Gold stockpile a record $24.6 Bil lion in 1949 compared with $10.5 billion in All the rest of the , during the next eight years other countries bought Only $1.7billion of american Gold an aver age of just Over $200 million a 1958, however a fundamental change began developing. Western Europe showed its first uneasiness about the continuing . Payment deficits. Almost imperceptibly there arose a suspicion that the Dollar might not always be As Strong As it was then. Finance ministers an Central Bankers decided it would be prudent to build up their reserves of of these factors plus some special circumstances growing out of the Suez crisis and the us. Recession foreign nations for the first time began making massive purchases of american Gold. In 1958they bought a record $2.3 billion officials welcomed this development As proof that the efforts to revive War wrecked Europe had succeeded. They said it was Good that the europeans could once More afford . Enthusiasm was tempered in 1959 As Gold continued to flow abroad though in a lesser amount and the payments deficit approached $4 billion. The Eisen Hower administration took a few tentative Steps to attack the deficit. It tied certain foreign Ai funds so they d be spent Here and promoted Early last year these moves seemed to be paying off. Export boomed the payments deficit Nar rowed and the flow of Gold slowed to 3. Trickle then yith the Start of the cur rent recession the Federal Reserve Board lowered Short term interest rates in an Effort to stimulate Busi Ness. Simultaneously interest rates in Europe were increased to discourage inflationary borrowing during the Boom there. The result was a big shift of Cap ital from the United states to Europe capital seeking a higher rate of return. The payments deficit spurted As dollars moved abroad and the europeans stepped up their Gold development raised a new Hobgoblin. It became apparent that with the major european currencies now readily convertible into dollars and vice versa funds would continue to Cross International bound Aries in search of High yields. This could Only complicate the . Bal Ance of payments problem. So worries mounted and As the did Gold buying kept Pace. Real fear entered the picture As some be Gan to wonder if the . Gold sup ply might not run Kennedy mapping new moves to meet the problem an with european interest rates trend ing downward the alarm soon maybe quieted. The payments deficit May shrink not the proud that the Dollar is As Good As Gold May in a few years sound woefully hollow. Should that Day come the. Whole free world would suffer / the stars and stripes

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