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Analysts and the Administration official, who declined to be identified, said Mr. Baker's remarks, in a television interview, meant that the Administration and the Federal Reserve Board would not interfere if market pressures start pushing the dollar down somewhat against the mark. They also said a decline of the dollar against the mark could be expected to bring a decline against many other currencies as well.
During an appearance on the Cable News Network program, ''Newsmaker Saturday,'' Mr. [James] Baker discussed major influences that have been playing upon a Dow Jones industrial average that plunged 9.5 percent this week, or 235.48 points, producing the largest weekly loss since World War II. The drop on Friday of 108.36 points alone wiped out $145 billion in the value of investors' stocks.
''I think if you look at the underlying economic fundamentals in this country, they're very, very good,'' he said. But he added that the stock market appeared to be reacting to prospects of tax increases by Congress, the enactment of protectionist legislation to reduce foreign imports, and to fears of rising interest rates and inflation. He also said growth of computer-generated ''program trading'' of securities had contributed to the size of the daily sell-offs."
NY Times, US Said to Allow Decline of Dollar Against the Mark, Sunday, October 18, 1987
"What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?"That may be advice from a 'moral philosopher' worth heeding.