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Lethbridge Herald Newspaper Archives

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Lethbridge Herald, The (Newspaper) - September 11, 1974, Lethbridge, Alberta U.S. dollar loses slitter on world money markets European banks crash Currency values change swiftly And now petro-dollars are adding to the com- plications as surplus dollars are moved with lighting speed to capture the latest profits in European markets filled with new anxieties By KEVIN DOYLE LONDON (CP) In the heady, comfortable days of the late 1950s and early 1960s, one of the world's most potent symbols of strength and stability was the simple, green-backed United States dollar bill More people were earning more of them than ever before and enough of them would buy you a second car for your wife, a tractor factory in Belgium, a distillery in Scotland or a healthy share in a Swiss bank They were esteemed for their intrinsic, unchanging value and sought after by kings and lords, oilmen and sheiks, Communists and Fascists Everyone, it seemed, was chasing dollars, next to gold and most inde- structible guarantee of wealth the world had to offer This coupled with a relentless overseas invest- ment drive by American businessmen and vast govern- ment spending on a major war in Asia made it not only likely but inevitable that the dollar would trickle, then flood, abroad By 1970, spurred on by new credit restrictions in the United States, a tidal wave of billion was pouring into banks outside the U S mainly in Western Europe, and the term Euro-dollars had entered popular vocabularies Since then, the dollar has lost some of its glitter and other currencies have grown stronger, following the green- back's path into foreign ac- counts and creating what is known as the Euro-currency market, the largest, most-rap- idly growing money market in the world The market, the size of which is conservatively es- timated at about billion, is virtually free of regulation, since the funds in which it deals have been removed from their national jurisdic- tions Its basic function is to attract deposits by offering slightly higher interest rates than pie vail elsewhere and to lend to firms, governments and other large institutions in need of cash which they are unable or unwilling to raise in more conventional ways But now, almost overnight it has become one of the greatest headaches and causes of concern among the world s central bankers Nowhere are the worries more numerous than in Lon- don The reasons for their fears are somewhat complex and form an intricate web of inter- bank dealings which are ex- tremely difficult to unspm But at the heart of the prob- lem is the fact that the Euro- currency market is operated by foreign branches of banks with head offices in the United States, Britain, the large West European countries and, to a lesser extent, Canada The absence of regulations, among other things, allows them great flexibility in deal- ing heavily in the forward ex- change market of the world's floating is, contracting to buy currencies at specified rates in anything from a month to a year's time in the hope of making easy profits from a change m their values Just how serious any abuse of this freedom can be has been amply demonstrated in numerous cases this year In February, Westdeutsche Landesbank in West Germany was clobbered by wildcat for- eign-exchange losses Union Banque Suisse suffered a ma- jor bruising in April, Franklin National had to be given billion by the US Federal Reserve Bank in June to help cover foreign exchange losses and later that month the West German government had to order Bankhaus Herstatt to close after a series of set- backs There have been numerous other cases recently, not all a result of speculation by foreign branches of banks but this, say the experts, still remained the greatest cause Several European govern- ments are indicating they in- tend to crack down on the ac- tivities of foreign bafhks in their countries but high level financial sources say nothing short of an international code of banking will solve the problem This, say the central bankers, now is their top priority but they show little sign of making any substantial progress Their other major worry about the Euro-currency mar- ket springs from the sudden, vast inflow of Arab oil money, known in economic jargon as petro-dollars In one case, the massive swelling in the flow of funds in the market is a direct tempta- tion to exchange dealers to step up tlreir speculative ac- tivity But a more troublesome as- pect is the fact that most oil deposits are for extremely short periods of tune, in some cases a week or less, while most loans are of a medium- term nature, sometimes for as long as 10 years But central bankers are alarmed by what they see as an unpredictable flow of Arab money Basically, they fear that banks in the Euro- currency market may serious- ly over-extend themselves and be "caught out' if Arab funds are suddenly withdrawn Wednesday, September LETHBRIDGE Skyscraper end predicted CALGARY (CP) A University of Calgary professor has predicted the end of the era of the skyscraper R D Gilmour. director of the architecture program for the faculty of environmental design, said here that technical, economical cultural and social factfs have created doomsdaj for the architectural dinosaur He told a seminar of the Canadian Telecom- munications Carrier Associa- tion that the energy shortage was the crippling blow for giantism in building "we no longer will possess the luxury of the prof gate use of energy New Ac- tion must be more finely to variable climatic demand; using every kind of mgenu.U and design skill to work with environmental imperatives rather than against them Configuration of tomorrow's building wou'd stress design suitable to its site environment, instead of the misdirection now inherent in applying the design criteria of a California building for example, to frigid climate zone Major changes will be im- plemented in hearing, cooling and lighting oi tomorrow's building in the future will be so irnpo.'-T that the operating costs j. cuilding then may be treasured in energy units person instead of the now customary dollars, he said New hearing OTTAWA. (CP) The Na- tional Ene'gj Board has de- cided to hold a separate hear- ing on transportation charges levied P'peLine Ltd The bco-o said iransporta- tion charge had been includ- ed in a hearing set for Sept 24 on the prices TransCanada will charge for gas Date of the hearing will be announced later TransCanada is seeking an increase in prices to compen- sate for higher well-head gas prices for V. extern gas The charges go into effect this fall Youngster with feeling The blue of the sky. the white of the clouds and the Queen Anee's lace before her are to Maria Fiqueroa, 3V4, of Lorame, Ohio she is blind But she can feel the wind as it olows the flowers and her hair and she says she enjoys feeling the wind. CARPET SPECTACULAR Large factory purchase at special price, gives you exceptional value on rugged Nylon Shag Carpet. STOCK ONLY COLORS: GOLD BRONZE GREEN RUM GOLD 6 DAYS ONLY Completely installed wall to wall, rubber underlay, labor. Ntti: Milt tad ttapt mill ixtra chirgr Reg. 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