Gold: Crisis Again?

Is the Western world stumbling toward another gold and monetary upheaval? An increasing number of bankers and economists fear that it is. "The international monetary situation is still unstable," says President Karl Blessing of the West German Bundesbank. South African Finance Minister Nicolaas Diederichs has repeatedly predicted that an international flareup will come in the second quarter of this year. Princeton Professor Fritz Machlup, a top expert on global finance, expects a new currency crisis "in the foreseeable future."

Such worries have been reinforced by signs of strain in the world's monetary system. Eight hours after Treasury Secretary David Kennedy...

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