THE SOLID GOLD PROBLEM.: U.S. Allies Must Help Solve It

THE gold rush that sent prices spiraling to a six-year high on the London market reflected foreign worry about the soundness of the U.S. dollar. It was a short-term rush; last week gold prices plummeted close to the U.S. price of $35 per oz. The gold balloon was deflated by the U.S. Treasury's firm announcement that it 1) has no intention of devaluing the dollar, and 2) is prepared to sell all the gold needed to stabilize the price on the London market.

There is no such easy solution to the major, long-term...

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