Amerikai Magyar Szó, 1981. január-június (35. évfolyam, 1-26. szám)
1981-06-04 / 23. szám
AMERIKAI MAGYAR SZÓ Thursday, June 4. 1981. 2. THE FEDERAL RESERVE BANK IN THE NEWS by Joseph Budish Of late we find ourselves being treated to an increase in professorial pronouncements by the media on economic subjects, on which there is understandably considerable uneasiness among the listening public. On May 11 the 7 PM news on Channel 7 gave us a lengthy account in scholarly tones of the heavily promoted myth of Federal Reserve control of interest rates by changing the “money supply”, thus increasing or decreasing the volume of loan money available at banks and other lenders. When the Fed wants to raise interest rates, so the story goes, it sells government bonds. The buyers draw dollars out of their accounts to pay for them. That reduces the dollars left in the banks that they can lend, and interest rates go up because demand for loan money is greater than the supply. The reverse is accomplished by the Fed buying government bonds from the market, thus increasing the available loan dollars. There is only one thing wrong with this fairy tale. The Federal Reserve is the bond selling agent for the Treasury. The Treasury gives the Fed between S 15 and $ 20 billion A MONTH in bills, notes and bonds which the Fed MUST sell, not to regulate the interest rates or inflation but to raise money to pay off the old bonds falling due (an ever increasing amount) and new money needed by the government To help unload that mountain of securities they often will TEMPORARILY buy up some bonds from dealers on a VERY short term basis on “repurchase agreements" that require the dealer to buy the bonds back very quickly (never longer than two weeks,usually a couple of days). These repurchase agreements are the only basis for the myth that the Fed regulates the financial market by buying and selling Treasurys. There is much more to be said about the Fed, but in general it must be understood that it is a Service agency for financial capital, not its master and not an economic planner or regulator of the economy. WALL ST. JOURNAL CONFIRMS MAGYAR SZO A WSJ story on May 20 had the headline “Reagan Economic Plan Isn’t Expected to Raise Capital Outlays in 1981”. In the story we read, “Businessmen would be more eager to take advantage of such savings (accelerated depreciation, lower capital gains taxes and investment income taxes -J.B.) if business were stronger. But most companies’ sales just are not brisk enough to stimulate expansion. Even though the first quarter was much stronger than most economists had forecast, plants are still operating only at about 80 % of capacity.” In the March 26 column titled ‘The Supply Side Economics Fairy Tale” I said “U.S. industry is now operating at about 80 % of capacity because there is no market for the product of the idle 20 %, and further, “There is plenty of capital here for business expansion, but that only happens if there is a market for the goods to be produced.” No comment needed, except that one might wonder if WSJ staff reporters read the Hungarian Word. To the Gellert Testimonial Committee Members of the Los Angeles Hungarian Workers Home Society greet Hugo Gellert, our respected compatriot. We humbly thank him for the many hours of pleasure his beautiful art bestowed on us and for the message we perceived in his work’, the assurance of a better world to come through wor- kingclass strength, through peace and friendship among all peoples of the world. His humanity and art is forever an indestructible part of human history. We wish Hugo and his lifelong companion, Livia, many more vears of happiness and fruitful work. Rose Weinstock, Chairperson Let us learn Hungarian TRAVELING UTAZAS TO THE EDITOR Does bus number five stop on this side of the street or across the read ? Where is the next bus [tram] stop? Let's cross the road, the bus stop is on the other side. blurry up, I’m afraid we shan’t catch the bus. What bus is this? Is this the right bus for... ? It doesn’t go our way. This is the bus we take. Let’s get on [off]. 'There is no room. How often dc the buses run along this line? Az ötös busz ezen az oldalon áll meg vagy a másikon? Hol van a legközelebbi busz- [villamos-] megálló? Menjünk (mennyünk) át, a buszmegálló a túloldalon van ! Siessünk, félek, hogy nem érjük el a buszt I Milyen busz ez? Jó ez a busz a(z)... feli-? Ez nem jó nekünk. Ez a mi autóbuszunk. Szálljunk fel [lel! Nem férünk fői. (Nincs hely.) Milyen gyakran járnak a buszok ezen a vonalon? ALLENTOWN, Pa. I am writing this letter for my mother, Mrs. Mary Horvath. She is very old so will you please write to me in English so I know and understand what the letters are about. I write all her letters. I do like all the English parts of the paper and read it all. So I hope you understand why I want you to write letters to my mother in English, since I take care of her mail, etc. I am not too good in the Hungarian language. Leslie Horvath AMERIKAI • MAGYAR SZO USPS 023-980 ISSN 9194-7990 Published weekly, exc. last week in July and 1st 2 weeks in August by Hungarian Word Inc. Inc. 130 E 16 St. New York. N Y. 10003. Ent. as 2nd Class Matter, Dec. 31. 1952 under • the Act of March. 21.1879, at the P.0, of New York, N.Y. Szerkeszti a Szerkesztő Bizottság Előfizetési árak New Yorkban, az Egyesült Államokban egy évre $ 18.-- félévre $ 10.- Kanadaban es minden más külföldi országban egy évre $ 20.- felevre $ 1.2.- Postnjastert Send address changes to Hungarian Word, Inc. 130 E 16 St. New York, N.Y. 10003. TUNGSRAM ABROAD WITH JOINT CAPITAL INTEREST Parts tor integrated circuits are mede in the plant of Tungsram’s Budapest Press and Tool Factory In the East Brunswick factory district of New Jersey, the American-Hungarian factory Action- Tungsram opened in November 1978 as a joint capital venture. The enterprise also handles trade representation of the Hungarian company, within a radius of competence extending to the South American countries and to Canada. In 1980 the joint board of directors already took a decision on the development of the producing plant. Tungsrams’ second joint capital enterprise is in Pakistan, a factory located in the vicinity of Karachi. Late 1980, trial production at the plant started on a lamp manufacturing line. The whole venture should turn out an annual total of 7 to 8 million standard lamps. In addition a glass factory is also under construction at Karachi,which, besides meeting the lamp fatory’s requirements will be able to supply glass parts for lamp factories throughout the region. Tungsram supplied a 1.8 million dollars’ worth of machinery, manufacturing lines for the joint enterprise and, similarly, to its factory locations hitherto, it undertakes also in this case the work of installation and the training of personnel and technical management. The Hungarian firms’ newest joint capital company was created in November 1980, in Ireland. This is a partnership venture in which the current Irish and British agents of Tungsram will participate. The Tungsram factory in Ireland will be located at Cork, 200 kilometres from Dublin. In the new plant three lamp manufacturing lines will be in operation - two for standard lamps and one for decorative products, and the lines will be installed by Hungarian specialists, with Hungarian-made equipment worth some 4 million dollars. The Cork lamp factory should start production in late 1981, and turn out an annual 20 million lamps. By the products of the new company Tungsram wants to get closer to its west European and overseas markets, and complete the range of products on offer. Within the next four years, Hungary’s hotel network will increase significantly in size. Bv the end of 1983, 20 hotels will be built or enlarged. The large-scale construction work is made possible, among other things, by a 300 million dollar austrian credit. Of the 8.500 hotel accomodations, 7.000 will be made within the framework of the Austrian— Hungarian economic cooperation.
