South Bend, December 14, 1971
The Dollar Devaluation
After meeting with French President George Pompidou in the Azores, President Nixon announced that the dollar will be devaluated. This news made no stir in the United States because the dollar had been exposed to an unofficial devaluation months ago. Thus, the unthinkable believed to upset the entire international monetary system has come about in an undramatic fashion and has been officially confirmed without much ado.
December 18, 1971
At their meeting in Washington, the finance ministers of the ten wealthiest democratic industrial countries agreed to devalue the U.S. dollar by 7.89 or about 8%. In conjunction with it, the revaluation of the DM (German Mark) is expected to be about 14%. This means that the exchange rate of the dollar to the DM would be 1: 3.22.
The U.S. government expects that the devaluation of the dollar will make American products more competitive in Europe, and that it would create half a million new jobs. At the same time, the U.S. foreign trade deficit should be reduced by 10 billion dollars. While here in this country the dollar devaluation is hardly taken notice of, it has a severe effect on Americans living abroad. On the other hand, the standard of living in Europe is being brought closer to that in America.
South Bend, December 29, 1971
U.S. Presence in Europe Upheld
The summit meeting between President Nixon and German Chancellor Willy Brandt under the palm trees of Key Biscayne in Florida was marked by a cordial atmosphere. Brandt may have received Nixon’s approval for his Ostpolitik as well as a firm pledge that the presence of American troops in Europe will be upheld. The strength of the 300,000 American troops stationed in Europe will not be reduced. To affirm the American will of engagement in Europe, the former Secretary of the Treasury David M. Kennedy was sent as ambassador to NATO. Although structural changes in the Western Alliance have been made, the core of the European defense under the nuclear umbrella of the United States has remained unchanged.