CITY AND SUBURBAN
Onwards and upwards to my goal the $2 martini
CHRISTOPHER FILDES
New York I live in hope of the $2 martini. As the exchange rate inches up towards the mea- gre figure of $2 = £1, I yearn to fly west- wards towards some reliable source of mar- tinis (the Ritz-Carlton, Boston, offers a choice of 16) and mop them up while the illusion lasts. Now, with the pound nine- tenths of the way there, the terms of the trade are well in my favour and it seems foolish to wait. I am of course the benefi- ciary of two central banks, one here and one in Germany. The Bundesbank, from which we choose to take our tune, is sitting on its policy of dear money. The United States Federal Reserve has no such inhibi- tions. It has had a sick banking system to nurse, the money supply has been looking decidedly pinched, and cheap money is the prescribed treatment for both. Low interest rates have driven investors away from the money market and sent them back into stocks — though not yet into property. The Dow-Jones index has been defying gravity, and Nicholas Brady, the President's ami- able millionaire friend who is Secretary of the Treasury, contrives to look cheerful, except when he sees the polls. At intervals he presses the Japanese to make their cur- rency more expensive — and martinis, in yen terms, even cheaper. I have from time to time wondered what would have hap- pened if we had linked the pound's exchange rate not to the mark, as we have, but to the dollar, as we always used to. Three plain consequences stand out: our money rates would be much lower, we should be further out of recession, and I should be left sucking the gin out of the olive.
Previous page
