Source stringclasses 1
value | Date int64 1.98k 2.01k | Text stringlengths 2 27.1k | Token_count int64 1 5.57k |
|---|---|---|---|
fomc | 1,977 | Three, Mr. Chairman. | 6 |
fomc | 1,977 | Those who prefer a money market directive would kindly raise their hands. | 13 |
fomc | 1,977 | Eight. | 2 |
fomc | 1,977 | Well, I think we are ready for a vote on this--members of the Committee who would like to raise some questions or make some supplementary comment? | 30 |
fomc | 1,977 | I'd really like an aggregates directive on the upside and a money market directive on the downside. Can't have that? | 22 |
fomc | 1,977 | I'd join Paul. | 4 |
fomc | 1,977 | Well, I think we are ready for a vote, Mr. Secretary. | 15 |
fomc | 1,977 | Chairman Burns Yes Vice Chairman Volcker Yes Governor Coldwell Yes Governor Gardner Yes President Guffey Yes Governor Jackson Yes Governor Lilly Yes President Mayo Yes President Morris Yes Governor Partee Yes President Roos No Governor Wallich Yes Eleven to one, Mr. Chairman. | 53 |
fomc | 1,977 | Well, gentlemen-- | 4 |
fomc | 1,977 | I hate to interrupt, but would you care to comment just briefly on the legality problem in the discount rate area? | 23 |
fomc | 1,977 | Legality problem--I don't know. | 8 |
fomc | 1,977 | Let's do it at lunch. | 6 |
fomc | 1,977 | I can tell you what that is about. That's when they're putting the directors of the banks under 208, making them criminally liable-- | 28 |
fomc | 1,977 | Well, I'm not acquainted with that issue. I can't comment on that. Is Tom O'Connell here? Let's talk about that at lunch, or is this something you could answer fairly promptly, Mr. O'Connell? | 45 |
fomc | 1,977 | I believe so, if I may. | 8 |
fomc | 1,977 | Why don't you do that, Mr. O'Connell. Let's have your answer now. | 18 |
fomc | 1,977 | With respect to the discount rate action itself, that is the issue of--I'm not concerned, Mr. Chairman, that there would be any problem of legality of action taken with respect to the rate itself. I have no trouble Mr. Chairman, firmly. But my judgment would be that there is no problem with respect to the action itself... | 95 |
fomc | 1,977 | Well, maybe this is something Mr. Winn is concerned about. I don't know the problem. Now I understand the section of the new bill that is perhaps troublesome. But that is perhaps something that, Tom, you might want to discuss with Mr. Winn, and possibly you might want to discuss it with the attorneys of the several Ban... | 68 |
fomc | 1,977 | If I may say, Mr. Chairman, I think not the discount rate itself but the approval of loans; but the whole thing is going to be very troublesome. | 33 |
fomc | 1,977 | Approval of loans. | 4 |
fomc | 1,977 | We had a long discussion at our board meeting last week, and I think there are a great many problems here that are going to need some discussion. | 30 |
fomc | 1,977 | There are, but my response, Mr. Chairman, was with particular reference to the discount rate. There are other problems-- | 25 |
fomc | 1,977 | But to the extent that our directors are disturbed, we ought to get working on these problems. | 19 |
fomc | 1,977 | We are. | 3 |
fomc | 1,977 | All right, now, Tom, will you be in charge of that? | 15 |
fomc | 1,977 | I will. | 3 |
fomc | 1,977 | Mr. Chairman, I think there's something very important for the Presidents to know--to the extent that there is a problem, it's not an FOMC problem. The Board of Governors--it is my understanding of the law--has the right to specifically excuse the potential conflict of interest which any of our directors may have and t... | 164 |
fomc | 1,977 | It has to be corrected, that's all. | 9 |
fomc | 1,977 | To the extent that is necessary, I think we have the capacity to do. That's-- | 18 |
fomc | 1,977 | I think this has to be clarified. | 8 |
fomc | 1,977 | Oh, I agree. But that's one reason we don't need to do it this afternoon. | 18 |
fomc | 1,977 | I will be-- | 4 |
fomc | 1,977 | Mr. Chairman, just one more quick question for Tom, If I may. I'm not quite sure how we came out yesterday, as to whether today's directive will or might have to be published immediately if we lose the Supreme Court appeal. | 47 |
fomc | 1,977 | My judgment is that, under the present extension on which we are operating to the Court of Appeals, this directive and the Committee's action are not subject to an immediate publication mandate for the court. We are under a pause effected by the request for extension of time. And so this month's directive, I think, ope... | 76 |
fomc | 1,977 | Okay, thank you. | 5 |
fomc | 1,977 | A very Merry Christmas and a Happy New Year to all of you. | 14 |
fomc | 1,978 | Well, we've had Mr. Truman's report. Are there any questions or comments? Mr. Wallich, please. | 24 |
fomc | 1,978 | The judgment that you expressed, Ted, does that imply that there will be a cessation of or substantial reduction of official intervention from the $36 billion you mentioned and, if so, that the financing of the current account deficit would have to be partly or wholly by private capital? | 55 |
fomc | 1,978 | Well, that of course is one of the uncertainties. So far, we've seen an increase in official financing in the last three quarters or so. Certainly, one of the questions is if such official financing does cease--or ceases to be on the same scale--will private financing be available at an unchanged or a rising or falling... | 107 |
fomc | 1,978 | I don't understand that statement. If official financing ceases, it will have to be private financing. The only question is at what exchange rate. | 29 |
fomc | 1,978 | Right. I tried to insert that-- | 8 |
fomc | 1,978 | Yes, but the question is: At what exchange rate? | 12 |
fomc | 1,978 | Right, I agree. | 5 |
fomc | 1,978 | And what opinion are you expressing, if any? | 10 |
fomc | 1,978 | Agnosticism. | 5 |
fomc | 1,978 | Well, I'm not an agnostic. I think that if official financing ceased in the absence of some highly significant new actions on the part of this government, private financing would be available at a significantly lower dollar exchange rate. Mr. Partee. | 49 |
fomc | 1,978 | Ted, you reflected on this 7-1/2 to 10 percent, I think you said, decline in the inflation-weighted price of the dollar as perhaps indicating that [the dollar] could be undervalued relative to other currencies. But if that were the case, wouldn't you think that that would be showing up in the trade data with a reductio... | 81 |
fomc | 1,978 | Well, most of that improvement has come since the end of September, and that's a little too [recent]. | 22 |
fomc | 1,978 | What kind of lags do you have on that response? | 12 |
fomc | 1,978 | Well, the standard results that the Board staff uses suggest that in general you get a small response to the depreciation on the trade balance four quarters out. That would suggest that you'd have to wait until close to the end of this year before you would get a positive response, and you have an initial negative resp... | 106 |
fomc | 1,978 | Tends to turn adverse. | 6 |
fomc | 1,978 | Right. | 2 |
fomc | 1,978 | Yes, I understand. But, as I recall, you don't have an improvement for the year in that current account balance. | 25 |
fomc | 1,978 | No, one of the reasons why, compared with last month, the staff projection shows a flattening out of the trade deficit--but only one of the reasons--is the depreciation of the dollar that we have had over the last three or four months. But, on balance, that might subtract $1 or $2 billion from the trade deficit at the ... | 101 |
fomc | 1,978 | Do you consider, Ted, that the new Japanese agreement will contribute anything toward an improvement? | 18 |
fomc | 1,978 | The trade aspects of the agreement itself--leaving aside the aggregate demand aspects, which could be substantial if they're successful, though one has some skepticism [about that]--shouldn't be too significant directly in an aggregate sense. For example, [the Japanese] promised to reduce tariffs by 10 percent on $2 bi... | 146 |
fomc | 1,978 | Ted, have you seen any evidence of a shift in leads and lags of commercial payments aggravating this pressure on the dollar? | 26 |
fomc | 1,978 | The data that we have on that are first of all not very good to begin with whenever we do get them, and second they're in part delayed. The evidence that we have--a little bit from the third quarter and for the first two months of the fourth quarter--suggests that in the areas where we don't have data, essentially trad... | 383 |
fomc | 1,978 | Mr. Volcker, please. | 7 |
fomc | 1,978 | Well, just a couple of observations, Mr. Chairman. I think all the evidence we have suggests that this trade balance is going to be hard to turn around in any short period of time. And all the evidence we've had since 1971 on the exchange rate changes doesn't suggest that changes come very quickly. The aggregate demand... | 269 |
fomc | 1,978 | Exactly. Well, if I have the staff's estimates accurately in mind--and you can correct me, Mr. Truman--for 1977 we had a trade deficit of approximately $30 billion and a current account deficit of approximately $18 billion. Additions to the reserves of foreign central banks held here, excluding OPEC because OPEC operat... | 224 |
fomc | 1,978 | One often used to hear, Mr. Chairman, about leads and lags in connection with other countries--I don't seem to have heard the term used with regard to the United States. [I think you said] that the leads and lags have gone against us over this past year. | 58 |
fomc | 1,978 | Yes, that's what I said. | 7 |
fomc | 1,978 | And there's [unintelligible] of rate change that could occur that could amount to $10 or $15 billion or in that area. | 29 |
fomc | 1,978 | You know, just for the sake of one or two individuals like myself who do not understand technical terms like leads or lags, Mr. Truman, would you explain what it is that we're talking about? | 41 |
fomc | 1,978 | Well, the simplest way to explain it, I think, Mr. Chairman, is this. If you have an importer, for example, who has to make payment in foreign currency for something he has imported and he thinks that the dollar is going to decline further, he accelerates that payment. He makes it today--borrowing dollars here maybe--r... | 83 |
fomc | 1,978 | That's a lead. | 4 |
fomc | 1,978 | There is another aspect, though, and that is with respect to [relative] interest rates. Now, you may not put that under leads and lags, but essentially as interest rates rise in the United States relative to elsewhere, people will try to finance their foreign trade in the low interest rate countries. And that again set... | 90 |
fomc | 1,978 | I had in mind the whole financing effect--the very short-run financing and payment effect, which I think can snap. It's sort of like an inventory change. It can algebraically amount to an awful lot from one quarter to another. I suppose it has been against us and it could go for us. So the sort of more permanent financ... | 84 |
fomc | 1,978 | Well, if the figures I have in front of me are correct, we had a positive errors and omissions of almost $10 billion in '76, and a minus, which includes some guessing, of $3-1/2 billion in '77. That is a swing of $12 billion or so. Most of the year, of course, had been exceptionally high positives in '76, so I don't kn... | 90 |
fomc | 1,978 | Mr. Roos, please. | 7 |
fomc | 1,978 | Can I ask two questions? Perhaps they are naive and reflect my lack of knowledge in this field. First of all, if there were a further substantial decline in the exchange value of the dollar under circumstances such as you described, what are the practical problems associated with that? And the second question, if I may... | 171 |
fomc | 1,978 | Well, I think that an increase in interest rates would be helpful in making private citizens and business firms around the world more willing to hold dollars or dollar assets. I don't think there's any doubt about that. But in my judgment it would be only the beginnings of an answer. I think the main answer is to be fo... | 330 |
fomc | 1,978 | If intervention in support of the dollar were to discontinue and there was a further substantial drop in the value of the dollar, does that have all kinds of frightening-- | 32 |
fomc | 1,978 | Well, in my judgment it has. The conventional theory, which is still heard in Washington now and then, here and there, is that when the dollar depreciates, the depreciation will cause exports to expand, imports to shrink, the trade balance to narrow, employment to rise, unemployment to decline, and that is, therefore, ... | 454 |
fomc | 1,978 | Well, my difficulty is--and it's the reason I asked Ted that earlier question--that I don't know what a proper exchange rate is for the dollar. I look at that chart across the way from me and it shows that the dollar is still well above the trade-weighted average value it reached in 1973 and in the first half of 1975. ... | 302 |
fomc | 1,978 | We've gotten into a discussion of a stable rate; I think Paul used the term-- | 17 |
fomc | 1,978 | Well, the Chairman was talking about a decline. | 10 |
fomc | 1,978 | That's contingent. It wasn't, I think, your thought that we ought to arrive at stable rates. I don't think either the discount rate action or intervention tends to stabilize a rate that for market reasons wants to move in another direction. | 46 |
fomc | 1,978 | I was responding to the Chairman's comment. | 9 |
fomc | 1,978 | I don't think you have responded to my comment. I interpreted your comment--not your language but the substance of your comment--as being directed mainly to intervention. As far as that goes, I think I have as little faith in intervention as you do. I have not been in favor of massive intervention. I have tried to hold... | 197 |
fomc | 1,978 | Mr. Chairman, do you see some indication on the part of government of a willingness to move to what you characterize as permanent corrective actions? Or does the problem have to get worse before [that will happen]? | 42 |
fomc | 1,978 | I think there's some indication, yes, of a willingness to move. Is there sufficient indication? No. Is there a sufficient sense of urgency? Not according to my reading. But I am an impatient man in this field. | 45 |
fomc | 1,978 | Suppose that none of these actions occurred. Suppose that there is no anti-inflationary program, that there is no energy program worthy of the name, and that the tax cut in the end turns out to be hardly at all for business and almost entirely for consumers. | 55 |
fomc | 1,978 | Well now, why don't you complete the list? | 10 |
fomc | 1,978 | All right. And that Germany and Japan-- | 9 |
fomc | 1,978 | No, and that there are no bridging actions of the kind that I suggested previously. Then go on. | 21 |
fomc | 1,978 | Well, I thought your fourth point was expansion abroad. I wasn't going to throw that in because I don't know what would happen. | 26 |
fomc | 1,978 | Well, expansion abroad can help enormously. | 8 |
fomc | 1,978 | It reminds me of our discussions of extending credit to New York City. That is, you're talking about bridging actions, but you don't have anything that you're bridging to if in fact those three things don't occur. In that case the dollar, I presume, if it is not competitive today, would have to decline further and we s... | 74 |
fomc | 1,978 | Well, I don't think I would call it competitive. I would say that the dollar would decline further and that would be a prelude probably to an international recession and, therefore, we should definitely resist it. [As for] the assumptions of inaction that you make, we should do what we can to make those assumptions not... | 69 |
fomc | 1,978 | I reckon. | 3 |
fomc | 1,978 | You two are talking about a time problem. [There's] a short-run problem and a longer-range problem. I can't see just standing by while the dollar depreciates at a rapid pace. But neither can I see a long-range intervention policy. | 49 |
fomc | 1,978 | Well, on a long-range intervention policy, I'm with you and Chuck. I see little point in it. I would say that, yes, intervention is desirable largely to show the rest of the world that we do care. What do we achieve by it? Very little. As a matter of fact, the rest of the world has talked a great deal about interventio... | 357 |
fomc | 1,978 | You suggested the selling of U.S. bonds in European money markets. I gather you're talking about mark-denominated bonds. Or are you talking about-- | 30 |
fomc | 1,978 | Oh, I think these are technical problems I would not [want to spend time discussing]. We have a little committee working on that and I hope that committee has concluded its work. I hope that committee is not going through bureaucratic exercises. By Jove, there will be thunder inside of this shop if it is. | 64 |
fomc | 1,978 | Before the thunder, could I ask another question? | 10 |
fomc | 1,978 | Yes, but we're not finished with-- | 8 |
fomc | 1,978 | What is the impact going to be on those money markets of a massive sale of bonds by the United States? Isn't that going to raise hell with their rates? | 32 |
fomc | 1,978 | Well, this is something that we would do only with the closest collaboration of the central banks and governments of other countries and I am assured that that collaboration will be forthcoming promptly. The device that you mentioned, selling Treasury bonds denominated in foreign currencies, is merely one way of accomp... | 65 |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.