Letters to the Editor: Not Out of the Woods Yet
In the editorial-page pieces "Nixon's Worst Weekend" (Aug. 15) and "My Price-Control Days With Nixon" (Aug. 16), Robert L. Bartley and Herbert Stein, respectively, paint a fascinating picture of the fateful economic decisions 20 years ago that led to the closing of the gold window and the collapse of the Bretton Woods agreement. For better or worse, this chain of events greatly influenced the world economies of the past two decades.</br></br>The largest lesson, correctly identified by Mr. Stein, is that the free marketplace found means to cope with these enormous economic changes. The first innovation -- the International Monetary Market in currency futures at the Chicago Mercantile Exchange -- will celebrate its 20th anniversary next spring.</br></br>Come to Chicago today and you will see a major growth industry in financial risk management. With 130,000 related jobs and influence in financial capitals around the world, the futures and options business here has filled a dire need for managing risk-inflation, volatile interest rates, fluctuating exchange rates. "Nixon's Worst Weekend" was only the opening scene in a changed, shrinking and information technology-driven world that created not only risk, but also opportunity. The sequel is that, since 1982, global financial centers such as London, Paris, Tokyo, Osaka, Singapore, Hong Kong and Frankfurt have established futures and options exchanges modeled on the example of the Chicago exchanges.</br></br>With the luxury of hindsight, history inevitably judges policy decisions. As for the financial risks endemic to these decisions, they can be hedged with futures and options.</br></br>John F. Sandner