The ultimate consequence of unchecked currency weakness is something that may be incomparably more disastrous in its effects than family bankruptcy. This is devaluation, and devaluation of a key world currency like the pound is the recurrent nightmare of all central bankers, whether in London, New York, Frankfurt, Zurich, or Tokyo. If at any time the drain on Britain’s reserves became so great that the Bank of England was unable, or unwilling, to fulfill its obligation to maintain the pound at $2.78, the necessary result would be devaluation. That is, the $2.78-to-$2.82 limitation would be
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