High Point Enterprise Newspaper Archives Dec 23 1973, Page 7

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High Point Enterprise (Newspaper) - December 23, 1973, High Point, North Carolina When you need help in establishing and attaining your financial goals. De Lyon jr., High Point address 406 Lindsay Street Telephone 882-1816 shortages will continue to plague Economy nation facing inflation recession High Point Enterprise sunday. December 23,1973 7a by Bill Neikirk associated press writer Washington a after a year of booming inflation and shortages of Many key commodities the . Economy Heads into 1974 facing More of the same a and the real threat of a recession As Well. Even the Nixon administration. Not known for pessimism in economic matters says the Economy could dip dangerously close to recession in the first half of 1974 with unemployment possibly rising to around 6 per cent. Some private economists and businessmen have issued far gloomier forecasts. Just How bad 1974�?Ts economic woes will be however depended on How Long the Oil producing Arab nations continue their cutoff of Oil exports to the United states another major uncertainty was whether the government could handle the fuel shortage Well enough to keep Industry running without major disruptions while ending wasteful consumption of gasoline and other fuels. There appeared to be no end to the shortages plaguing the Economy from fuel to food to Basic materials. Prices were poised to go in Only one direction a up. Despite the 1974 prospects it appeared americans were looking at their economic situation More realistically than they had in years it was in 1973 that they Learned the nation no longer had things in abundance. The meaning of the word a a shortage a finally came Home. It was just under a year ago that president Nixon in his annual economic message to Congress saw potentially great things for the Economy in 1973 if Federal spending was held under control. It was and inflation. Still went through the roof. His Council of economic advisers writing in the same report said a by the end of 1972, the american anti inflation policy had become the Marvel of the rest of the then in 1973 consumer prices rocketed upward at an annual rate of 8 per cent during the year with food prices soaring by 20 per cent. No one had foreseen the worst inflation since the korean War. It All started with phase 3. Early in january the administration decided to abandoned its mandatory system of wage Price controls or phase 2, for a largely voluntary system in which businesses and unions were expected to keep their wages and prices in line with government guidelines. The decision sent the Stock Market in a tailspin. Prices and wages soon began to explode. Speculators began a run on the Dollar overseas. The . Currency withstand the pressure and was formally devalued feb. To. The Cost of living Council the Agency enforcing wage Price controls blamed the surge in inflation on Short food supplies and on booming world commodity prices. By March the . Economic situation had deteriorated so much that even. The newly devalued Dollar could t stand up under pressure. Finally the United states and leading Industrial nations gave up on trying to maintain fixed Exchange rates for the world s major currencies. After that the Dollar Sank lower in value making Many . Goods a bargain. Foreign nations began purchasing agricultural products in greater volume increasing the . Shortages and pushing up Domestic prices. The russian wheat Deal contributed in Large part to the great 1973 Price surge. The soviet Union purchased much More Grain than . Officials thought it would creating wide spread shortages of Grain for bread and for feeding animals. Treasury Secretary George p. Shultz said frankly the Nixon administration got burned in the wheat Deal and promised it happen again. Steeped in worries Over watergate. President Nixon moved in mid june to try to Stop the rocketing inflation freezing prices for 60 Days. He did no to apply the freeze to wages explaining that wage increases had been moderate. They had remaining just a Little Over the 5.5 per cent government Standard. It was the second time Nixon has resorted to a freeze to to to buy time to put a More effective anti inflation policy in to effect but the second freeze did no to enjoy the same Public support As the first. Because the retail prices of All agricultural products were Frozen producers found that it was not profitable to put beef and poultry on the Market. Some drowned baby Chicks. Beef was withheld from the Market. Nixon released the food and health industries from the Price freeze in mid july but kept the lid on beef prices and across the rest of the Economy until mid August. He replaced the freeze with a Tough anti inflation policy in some cases squeezing the profits of Industry by refusing to allow them to pass along on their costs. Still phase 4 As it was called failed to restrain inflation As world prices of Many commodities went up sharply. A despite an official disenchantment with wage Price controls the administration held on to them tightly fearing that letting them go would Lead to an explosion in prices far beyond what the nation had been experiencing. The Federal Reserve Board tried to give the anti inflation policy a boost holding on to a tight Money policy that pushed up interest rates to record Levels throughout the nation. The Impact of this policy was Felt immediately in the housing Industry which had expected a Good year. And instead faced a severe downturn. Despite All its troubles the Economy rolled along at a High rate of growth and in fact came dangerously close to overheating. Had not the shortages of Many Basic materials struck in 1973. The Economy might have expanded at a greater rate and pushed up prices even higher. It was meanwhile a bad year for economic forecasting. The Council of economic advisers predicted in january that the rate of inflation would drop to 2,5 per cent by the end of the year by july that forecast was abandoned but the Council headed by Herbert Stein was not alone in that forecast. Many private economists made similar optimistic predictions although with not As Low a rate of inflation As the government predicted. Season Best to you this a Christmas Day. We appreciate the patronage shown to us. Fletcher insurance Agency 3216 s. Main St. Re. 431-4514 May the spirit of this joyous season fill your Home with the blessings of love. Hill electronics 3 Miles East of Archdale i his holy season is a filled with Many spiritual gifts. May you reap All of them. Mccuiston. . Timothy r. Yates int egoism 115 s. Hamilton St. Telephone 883-0424 times May have changed but one thing is still the same a sending Holiday greetings to friends old and new. It s a pleasure to wish you Happy holidays. Central hearing Aid inc. 329 v main St. High Point. Pc. Christmas cd acc to All men of Pood will. To All our Good friends we Send greetings for a Happy Holiday. We appreciate your Loyal patronage. 11223 the freshness of new fallen Snow awakens deep reflections of Holiday sentiments. We express the Hope that Good will and brotherhood prevail to bring lasting peace among us. The Best of the season to you and sincere thanks for your loyalty. Granville moving amp storage Fred p. Newby pres. 801 s. Hamilton St. Phone 882-0151 e12 23 j income amp capital associates inc. A capital creation accumulation i management a consulting companies col Poi Ole Bonoit planning company physician planning Sot vie corporation provident lift 4 Accident insurance company not equity services corporation Loomis Sayles and campany

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