(10 of 10)
But the pressures for devaluation are seldom as technically correct as they are psychologically inspired. That is why De Gaulle's gamble is essentially a psychological gamble. He does not need to reform the French economy so much as he needs to re-create confidence in the idea of the franc. Once the speculators fix on a vulnerable currency, it is difficult to persuade them to give up the pursuit. If, for example, the French unions refuse to accept De Gaulle's austerity measures and strike for a new round of wage increases, he is almost certain to lose his bet that he can save the franc without devaluing it.
If he does lose, for that or any other reason—or no reason at all except that the speculators refuse to quit selling francs—the most extreme consequence imaginable would be a world financial debacle, bringing down the present monetary system in ruins. But long before that should happen, the governments of the West would likely convene a world monetary conference to overhaul completely the present system. Even in that eventuality, the General in a sense would emerge as a winner by having forced the reform of the system he has so long excoriated. Whatever the outcome of De Gaulle's latest exercise in in dependence, he has demonstrated once again his unique ability to confound the conventions of an increasingly interdependent world.
*The Commerce Department last week reported a payments surplus of $35 million at seasonally adjusted rates during 1968's third quarter, the first such surplus in more than three years.