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<text id=92TT1934>
<title>
Aug. 31, 1992: Greenback Blues
</title>
<history>
TIME--The Weekly Newsmagazine--1992
Aug. 31, 1992 Woody Allen: Cries and Whispers
</history>
<article>
<source>Time Magazine</source>
<hdr>
THE WEEK, Page 19
BUSINESS
Greenback Blues
</hdr><body>
<p>The dollar dives to its lowest level since World War II
</p>
<p> Maybe they didn't like George Bush's speech, or maybe they
were worried about European integration. Or maybe they just felt
dyspeptic. Whatever the reason, currency traders dumped dollars
by the billion late last week. A huge sell-off drove the
greenback down as low as 1.4250 to the German mark, its lowest
level since the deutsche mark was created in 1948.
</p>
<p> The fall came despite nearly heroic efforts to stop it. No
fewer than 17 central banks, including the German Bundesbank,
the Swiss National Bank and America's own Federal Reserve,
began buying hundreds of millions of dollars as the rate slipped
below the 1.45 level that has triggered past rescue attempts.
This time it hardly helped. By the close of trading in New York
Friday, the dollar had recovered only to 1.4290. That, in turn,
helped knock more than 50 points off the Dow Jones industrial
average at Friday's close.
</p>
<p> But if the dollar was stumbling, the Japanese stock market
was practically falling on its face. The Nikkei Index dropped
to 14,309, its lowest level since 1986, forcing the government
to take action. The Finance Ministry announced new rules to
discourage banks from dumping shares, which brought at least a
temporary recovery. But critics said long-promised government
spending programs are needed to make the recovery permanent.
</p>
</body></article>
</text>