Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
2Activity
0 of .
Results for:
No results containing your search query
P. 1
1981 Who Profits From Inflation

1981 Who Profits From Inflation

Ratings: (0)|Views: 13|Likes:
Published by Hal Shurtleff

More info:

Published by: Hal Shurtleff on Apr 28, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

04/27/2013

pdf

text

original

 
Who
Profits
From
INFLATION
Alan
Stang
isauthorof
It's
VerySimple;
The
Actor;
and,
The
HighestVirtue.
Hisradiocommentary,The
Alan
StangReport,isheardon100stations.Mr.StangholdsaMaster'sDegreefromColumbiaUniversity.
As
YOUR
correspondentsetsthisdown,twomajorbankshaveloweredtheirprimerateshalfapoint,to
twentypercent,
but
bond
pricesplungedagainanyway,asymptomof
I
theworstcollapseinthehistoryofthebondmarkets.SamuelThorne,seniorvicepresidentforinvestments
at
Scudder,Stevens
&
Clark,saysinvestorsarein"shellshock."Nor-
NOVEMBER,
1981
man
Robertson,aseniorvicepresi
dent
ofMellonBank,inPittsburgh,saysinvestorsare
"stunned,"andthat,
"If
it
isn't
paranoia,it'shys
teria."
AlanC.Lerner,anotherseniorvicepresident,withBankers
Trust,
says
the
moodofthecreditmarketsis
"just
horrible."Even
the
Treasuryhastoofferunprecedentedratestomoveitspaper.
1
 
After-taxcorporateprofitsfell11.3percentinthesecondquarterof1981,andbankruptcyfilingshaveincreasedmorethan20percentfromthefirsthalfoflastyear.AstheBudgetdeficitcontinuestoescalate,industryisbucklingunderthestrainofhighinterestrates,inflation,andthehugeburdenofregulation.
I
Among
the
reasonsthiswashappeningwas
the
latest
government
"mistake."
Governmentexperts
had
just
revealed
that
the
1982deficitwouldbe
sixty
billiondollars,
not
$42.5billion.IrvingAuerback,avicepresident
and
economist
at
AubreyG.Lanston
&
Company,saidheexpected
the
1982deficittobe
sixty-
five
billion.
This
ofcourseismoney
the
governmentdoesn'thave,
and
itwouldbeverycloseto
the
biggestofficialdeficitinhistory:sixty-sixbillion
under
GeraldFord.
The
Commerce
Department
recentlyannounced
that
after-tax
corporate
I
profitsfell11.3percentin
the
secondquarter.Indeed,
the
GrossNa-
I
tional
Product
alsofell,
at
aseasonallyadjusted2.4percent
annualrate
after
allowingfor
inflation's
effects.CommerceSecretaryMalcolmBaldrigeblames
the
profits
bust
onhighinterestrates.
Many
companieswill
not
betheretokickaround
much
longer.
The
I
bankruptcy
divisionof
the
federalcourtssays
that
bankruptcy
filingsofalltypeshaveincreasedmore
than
twent
ypercentfrom
the
first
half
of
last
yeartothefirst
half
ofthis.
Perhap
sthebiggestreason,certainly abigone,is
that
theycan
't
getcashtooperate.Alongtheselines,
the
Savings
&
Loansarestillon
the
ropesas
I
peoplewi
thdraw
theirdepositsfor
2
reinvestment
at
much
higher
interest
rateselsewhere.
In
July,saverswithdrew$5.6billionmorefromS.
&
L.s
than
theydeposited.
This
was
the
fifth
consecutive
month
of
such
lossesfor
the
industry,
andbroughtthetotal
for
the
firstseven
months
of1981to$16.7billion.Meanwhile,
the
S.
&
L.sare
stuck
withcollecting
payments
onlong-term,low-interesthomeloans.By
the
end
of
the
year
theindustry
couldloseas
much
asfivebilliondollars.Ashockingproofofapproachingdisasteris
that
the
factshaveeven
penetrated
Newsweek
magazine:"About
eightypercentof
thenation
's4,700savings
and
loanassociationsarerunningin
the
red.
Perhaps
a
third
of
them
areindangeroffailing,
andlast
week
the
FederalReservebegantogive
them
unprecedentedemergencyloans.
With
seventeen.percentmortgageratesbecom ingcommon,real-e
state
valuesareeroding,
and
inareaswhereproperty
speculation
has
been
heavy,
the
dangerofacollapseisreal...."Thesearejustafewexamples.
The
originofallthis,
and
more,is onceagain
the
factth
at
,for
man
yyears,
the
governmen
thas
been
spendingmoneyitdoesn
't
have,
and
that
we
don't
"oweittoourselve
s."The
reasonweshouldtake
another
O
look
at
the
processis
tha
t
the
collapse
~
AMERI
CAN
OP
INION

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->