think?”
Preston looked thoughtful, as though the obvious question had provoked him to a sudden new idea. “It’s amazing when you think about it,” he began. “Time and again in the past ten, twelve years we’ve seemed very near the brink. Every time we’ve pulled back.” He cut a bite from his slab of beef in quick, deft movements. “I think we will this time, too.”
“Markets will reopen tomorrow, then, none the worse for wear?”
“There’ll be the usual grumblings about better surveillance, tougher controls, and all that,” Preston said. “But I think life will go on just like before.” He sipped the wine. “After all, South Africa’s been on the brink for some time. This thing yesterday just caught the market at a wobbly moment.”
Wobbly, thought Drew to himself. When hasn’t the market been wobbly in recent years? He didn’t push the matter with Preston, who had already demonstrated a longer-term view than Drew had ever heard from him before.
When the bill came and Preston examined it closely, it reassured Drew that the gold trader took the figure so seriously. He sometimes feared that million-dollar deals cut off these market operators from the real world, where real people sweated and suffered for infinitesimal fractions of the amounts these dealers transacted.
Back at the office, Drew talked to Meg Hanrahan, the Geneva correspondent who had gone up to Basel to cover the central bankers’ meeting there. He could picture the pressroom in the futuristic headquarters of the Bank for International Settlements, which looked like a nuclear power plant and was known locally as the Tower of Basel. It was something of a glorified men’s club for the central bankers. The BIS, in fact, maintained a full-fledged sports club outside of Basel.
As usual, Meg recounted, the Europeans were balking at the Americans’ presumption that everything depended on stabilizing the dollar. The world had operated on a de facto dollar monetary system since World War II. Following the war, the United States accounted for more than half of all production in the non-Communist world. There didn’t seem to be any alternative to the dollar. But in the eighties, the U.S. share of the world economy shrank to less than a quarter, while Washington seemed increasingly irresponsible in the management of its financial affairs. Monetary conferences had developed a routine of plaintive, sometimes whining Europeans, with Americans cast in the role of the heavies.
Washington would get its way again, of course. Whatever the Europeans might think, four fifths of all world trade and finance was transacted in dollars, and nothing could work without a stable U.S. currency.
“How much are they putting in the kitty?” Drew asked his reporter.
“The Europeans are putting up the whole reserves of the EMF,” Meg said—the European Monetary Fund, with a good $50 billion in reserves. “The Fed will match it, and the Japanese will pitch in with twenty billion.” Would that be enough? “The understanding seems to be that the Fed will double its amount if necessary,” Meg continued, not waiting to be asked.
Quite a war chest. But they would need it if the market started to stampede again and the central banks intervened to smooth out trading.
“Will it be finished this evening?” Drew asked.
“Has to be. They want everything to open on time tomorrow,” replied the young woman. Her voice had the energy of controlled excitement; she was clearly enjoying herself.
“Give us a three-take backgrounder now—and keep on it,” he added superfluously. Meg would write her piece on the portable computer she took everywhere with her and transmit it over the phone into the agency’s main computer. Then the slotman could flash it around the world.
David Sangrat called. “I need to see you. My driver will pick you up at five,” he said, hanging up before Drew could respond.
Sangrat was one of those ubiquitous middlemen who populated
Preston looked thoughtful, as though the obvious question had provoked him to a sudden new idea. “It’s amazing when you think about it,” he began. “Time and again in the past ten, twelve years we’ve seemed very near the brink. Every time we’ve pulled back.” He cut a bite from his slab of beef in quick, deft movements. “I think we will this time, too.”
“Markets will reopen tomorrow, then, none the worse for wear?”
“There’ll be the usual grumblings about better surveillance, tougher controls, and all that,” Preston said. “But I think life will go on just like before.” He sipped the wine. “After all, South Africa’s been on the brink for some time. This thing yesterday just caught the market at a wobbly moment.”
Wobbly, thought Drew to himself. When hasn’t the market been wobbly in recent years? He didn’t push the matter with Preston, who had already demonstrated a longer-term view than Drew had ever heard from him before.
When the bill came and Preston examined it closely, it reassured Drew that the gold trader took the figure so seriously. He sometimes feared that million-dollar deals cut off these market operators from the real world, where real people sweated and suffered for infinitesimal fractions of the amounts these dealers transacted.
Back at the office, Drew talked to Meg Hanrahan, the Geneva correspondent who had gone up to Basel to cover the central bankers’ meeting there. He could picture the pressroom in the futuristic headquarters of the Bank for International Settlements, which looked like a nuclear power plant and was known locally as the Tower of Basel. It was something of a glorified men’s club for the central bankers. The BIS, in fact, maintained a full-fledged sports club outside of Basel.
As usual, Meg recounted, the Europeans were balking at the Americans’ presumption that everything depended on stabilizing the dollar. The world had operated on a de facto dollar monetary system since World War II. Following the war, the United States accounted for more than half of all production in the non-Communist world. There didn’t seem to be any alternative to the dollar. But in the eighties, the U.S. share of the world economy shrank to less than a quarter, while Washington seemed increasingly irresponsible in the management of its financial affairs. Monetary conferences had developed a routine of plaintive, sometimes whining Europeans, with Americans cast in the role of the heavies.
Washington would get its way again, of course. Whatever the Europeans might think, four fifths of all world trade and finance was transacted in dollars, and nothing could work without a stable U.S. currency.
“How much are they putting in the kitty?” Drew asked his reporter.
“The Europeans are putting up the whole reserves of the EMF,” Meg said—the European Monetary Fund, with a good $50 billion in reserves. “The Fed will match it, and the Japanese will pitch in with twenty billion.” Would that be enough? “The understanding seems to be that the Fed will double its amount if necessary,” Meg continued, not waiting to be asked.
Quite a war chest. But they would need it if the market started to stampede again and the central banks intervened to smooth out trading.
“Will it be finished this evening?” Drew asked.
“Has to be. They want everything to open on time tomorrow,” replied the young woman. Her voice had the energy of controlled excitement; she was clearly enjoying herself.
“Give us a three-take backgrounder now—and keep on it,” he added superfluously. Meg would write her piece on the portable computer she took everywhere with her and transmit it over the phone into the agency’s main computer. Then the slotman could flash it around the world.
David Sangrat called. “I need to see you. My driver will pick you up at five,” he said, hanging up before Drew could respond.
Sangrat was one of those ubiquitous middlemen who populated
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