Basic HTML Version
advance
news
•
WORLD EVENTS
the wake of toda
y'
s
1n
•
lnflation Worries Mount
The greatest concern throughout Western Europe
today is the serious problem of inflation. While the U. S.
rate of inflation has shrunk to a rather manageable 3 or
3Y.z%, Europe sees no fast relief in sight for itself.
West Germany, at latest reports, is proceeding ata
6.4% rate, and Switzerland has passed 7%. Other
countries range between a 5% to 6% rate - except for
Britain which, until the recent wage and price freeze ,
was running almost double this figure.
Of course, the United States has been blamed for
the inflationary spiral for quite sorne time. Nobody
30
INFLATION IN EUROPE
ltaly
Spain
Britain
lreland
Greece
Nether.
Switz.
France
W. Ger.
Austria
Belgium
U.S.A .
compared with United States
annual rotes in the final quarter of 1972
doubts that the United States has contributed to world–
wide monetary instability due to the enormously costly
Vietnam War, endless balance-of-payments deficits,
and heavy overseas business investments.
While it's popular for politicians to continue to lay
blame on the United States, privately Europe's leading
bankers concede that Europe's galloping inflation is
now largely intemally generated.
Switzerland is a beautiful case in point. The tiny
nation has a super-overheated economy. Every third
worker in the country is a foreigner. There are around
600,000
Fremdarbeiter
or foreign workers (largely Ital–
ian) in the nation, along with perhaps 200,000 of their
dependents. And there are only 6 million Swiss to begin
with. Only 56 people in the whole country are listed as
being unemployed. In West Germany, with a much big–
ger economy, there are over 2
1
.1..
million foreign workers.
This crusb of foreign labor is placing great de–
mands on strained social services - housing, trans–
portation, utilities. Of course, government spending has
to increase, and with it comes inflation.
European money-men are generally encouraged by
the official U. S. determination to hold the lid on in–
flation. But one thing still bothers them. That's the con–
tinua! bad showing of America's balance-of-payments
picture- which has now been joined by a deficit in bal–
ance-of-trade as well (imports over exports).
lt is going to be extremely difficult for the United
States to make the reversa! reaUy needed in its trade
posture. First of aU, efforts to increase exports from the
U. S. often come into conftict with production plans of
U. S.-owned subsidiaries abroad.
Also, the tremendous U. S. need for
oil
and natural
gas imports for the rest of this decade alone will wipe
out any trade advantage gained through more normal
cbannels. Secretary of Interior Rogers Morton recentiy
wamed that future reliance on foreign energy sources
would result in a negative balance-of-payments "of tre–
mendous proportions."
While there may be a momentary luH in inter–
national monetary matters, the seeds of far-worse dollar
blowups in the future have already been planted.
- Gene H. Hogberg
PLAIN TRUTH February 1973