Courtesy Reuters

All Americans are alarmed at the shrinking value of the dollar in their neighborhood supermarkets - by close to one-half in the last ten years. With the President's announcement in early November ordering a series of dramatic actions to shore up the value of the dollar abroad, more and more Americans have also become conscious of the dollar's declining value in terms of major foreign currencies over the same period - by more than one-half against the West German mark and the Japanese yen, and by nearly two-thirds vis-à-vis the Swiss franc. But I suspect that no more than one American out of 10,000 realizes that these - and other - developments are rapidly undermining what President de Gaulle used to call our "exorbitant privilege" of being able to settle with our own dollar IOUs the growing excess of our expenditures abroad over our receipts from abroad (on capital as

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  • Robert Triffin is Frederick William Beinecke Professor of Economics at Yale University and invited professor at Louvain-la-Neuve. He is best known as a long-time advocate of world monetary reform and regional monetary integration, and as one of the main architects of the European Payments Union and of central bank reforms in several Latin American countries. He has served as consultant to various U.S. and U.N. agencies, and to the European Economic Community.
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