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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Joseph G. who wrote (33531)	10/7/1998 9:41:00 PM
From: JF Quinnelly	Read Replies (1) \| Respond to of 132070

Joe, I have read that one of the precipitating factors for the '87 crash was our policy of driving the dollar down. The '85 Plaza Accords, wasn't it? We intended to drop the dollar 40% over a number of years. Anyway, the Japanese were starting to get squeezed by the currency play so they dumped a ton of US assets all at once. Now today we had the biggest one-day drop in the dollar ever, if news reports are correct. If the Fed intends to lower our interest rates this should further weaken the dollar, which may cause foreign investors to repatriate their capital. We may well have a plan to drive capital back to Japan to prevent their banking system from collapsing. Any thoughts?