Tug of War: Today's Global Currency Crisis

In financial pundit Erdman's analysis, the global currency instability of 1995 began with the barely noticed devaluation of the Mexican peso, ricocheted throughout Latin America and mushroomed when Japanese investors suffered heavy losses in U.S. stocks, bonds, loans and real estate. This concise, lucid primer, interwoven with charts, graphs and diagrams, will transform the financially illiterate person into an armchair expert on such topics as currency markets, derivatives and international trade. Challenging the dire predictions of doomsayers such as Paul Kennedy, Lester Thurow and Michael Crichton, who envisaged the eclipse of the U.S. as a superpower, Erdman foresees steady U.S. economic growth through the 1990s, with low unemployment. But he also sets forth a worst-case scenario of global monetary collapse triggered by a free fall of the dollar, by escalating Japanese-U.S. confrontation or by external systemic shocks. Finally, he predicts that the European Monetary Union, an eight-nation currency bloc scheduled to begin in 1999, will be a formidable new player in the global arena, with Germany as its guiding force. (Sept.)