Heady Days for the Dollar

The payoff and the perils of a strong currency

The economic turn-around promised by Ronald Reagan is still dim and distant, but at least one stunning shift in U.S. financial fortunes has already unfolded: the rebound of the dollar. Since January, the American currency has risen by 14% against the Japanese yen, 27% against the West German mark and 33% against the Italian lira.

The spectacular surge in the value of American money is an abrupt reversal of a decade-long, disorderly slide that began in August 1971, when President Nixon severed the dollar's traditional link to gold. In the years that followed, relentless...

Want the full story?

Subscribe Now


Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on TIME.com

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!