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i Babson's Forecast - - - -- 1968: Year of Decisions The coming year threatens to be one of varied and re curring crises. Virtually no area of human activity will be spared . . . social, econo mic, political, or internation al. After years of progress and prosperity, the Ameri* can people will be faced in 1983 with many decisions that will prove difficult to make and evert tougher to carry out. Don’t expect the final solu tion to 1968’s many problems to be worked out during the year ahead. But the manner in which our nation tackles its predicament will deter mine whether the U. S. will be able to strengthen its poSi-’ tion as -world leader ... or be toppled during succeeding years and reduced to an in ferior standing. To be without hope is to sin. And we do have hope that our citizens and their govern ment will rise to defeat the many antagonists — infla tion, social corruption, greed, crime, fear, and despair — that are pressing upon us as the new year begins. It is said that the Oriental concept of crisis is opportunity. In that sense, we predict with out reservation that 1968 will hold opportunities unlimited for our country. THE CHRONICLE, Clinton, S. C., Dec. 28, 1967—3 01 NT OF 4 VIEW- ECONOMY , 1. Now that the pound has been devalued, perhaps our greatest opportunity fdr the year ahead is to prepare a strong defehse for the dbllar. We forecast that after some early fumbling both the Congress and the Federal Re serve will move with deter mination to protect our dol lar. 2. The effects of the battle to save the dollar promise to be unpleasant. After an early- year surge to new highs for dollar values and'Production, business will find the going rougher as the months un fold. Scarcer and more costly money will take its toll of growth. 3. Major stimulation to the economy in the early part of 1968 will come from a scram ble by auto and allied lines to make up for production lost in 1967, combined with a stockpiling of steel and al- GORDON'S “Shoes for the Entire Fahuly*’ 107 E. MainVSt. PhoAe 833-0667 FALL and WINTER CLEARANCE Starts Today!,. Many Styles To Select From • LIFE STRIDE • CALIFORNIA COBBLERS • RED CROSS uminum in anticipation of strikes later next year in these activities. 4. Some additional escala tion of the Viet war will oc cur next year. But we have already experienced the ma jor impact on business of the massive buildup in arms out lays; whatever additional procurement comes will not be a determining factor on the course of 1968’s business. VIETNAM 5. President Johnson is torn between a desire to “pour it on’’ in Vietnam and bring home victory before voting time next autumn and his sincere wish to go down in history as a peacemaker. If recent and prospective tight ening of the military vise on North Vietnam fails to bring results by late spring . . . look for spectacular moves toward negotiations. Under these circumstances we feel the chances are 60-40 that 1968 will mark the phase-out of our military operations in Vietnam. 6. But the most decisive conflict next year will not be fought on the battlefields of Southeast Asia. It will be here at home against the one en emy that has the power to destroy the U. S. ... IN FLATION. 7. Contrary to the bid adage that Congressmen won’t com mit political suicide by vot ing a tax hike in an election year, we do expect a revenue act in 1968. It may include excise imposts as well as in come levies. 8. The Administration will be forced to reduce total ex penditures for the coming year by $6-to-$10 billion. While the war continues, most of this will have to he lopped off nomdefense areas. 9. Congress will remove the 25'J gold backing for Federal Reserve notes early in the year. 10. The amount of goods ^ | perhaps sharply — in the first half of 1968 . . . taper off la- . ter. 23. Business capital expen ditures should start the year on a strong note, but as the year advances, prospects for further gains will become dimmer. LABOR tourists will be permitted to 2 4. With wage guidelines bring into the country duty- nuw ( i e finitely junked, there free will be reduced to zero in will be a stampede by labor 1966 generally to bring contract 11. Further restrictions will gains in line with the huge be put on foreign investments advances made by the United by U. S. corporations in the'Auto Workers; the annual coming year; our govern- salary concept for production ment will encourage Ameri- workers will gain further ac- can companies to increase di- ceptance in 1968 by a number vidend payments by foreign of American indutsries. subsidiaries. 25. A labor feature for the 12. Rationing of credit by!coming ye«jr will be wide- the Administration and the spread stoppages by state, city, and loejal public employ- Federal Reserve is a distinct possibility in the months ces; the ahead. 13. U. ». outlays lor foreign aid will be slashed in 1988. 14. Our money managers will slow down the current high rate of money-supply increase as soon as Congress takes action to curb inflation. 15. But the tremendous out pouring of money during the whole of 1967 will continue, for some months, to exert, „ .. . upward pressures on interest con ° rates and the general price level. It will also have an energizing effect on bus iness. Hence, as money flow is cut back next year, there ^ depressing battle on this front will surely He long and bit ter. 26. With elections coming in the autumn, Corigress will not vote any restrictive labor legiplation in 1968. Although we anticipate that credit con trols may possibly be invoked in the Administratioh’s strug gle with inflation, there is rto chance that any serious at tempts will be made to im- will be a delayed effect on interest rates, pric es, and business . . . probably after midyear. raids on the dollar; but it will not be devalued in 1968. 17. There will, however, be many discussions between fi nancial experts here and abroad to develop a long- range plan for revaluing in terms of gold—on a more re alistic basis—the currencies of all of the Free World. 18. The early—1968 uptilt in business volume will give a lift to corporate profits; the fanning out of wage boosts, however, along with rising costs and taxes will later have a squeezing effect on profits. 19. Short-term interest rat es will rise faster than long term in the months ahead. 20. This will have a res trictive impact on the avail ability and cost of mortgage funds. 21. In turn, the recovery now under way in home buildihg will be restrained and perhaps reversed as 1968 moves along ... but apart ment construction should re main in an uptrend. 22. Inventories will rise — 27. Upward pressures on the cost of livihg will be inten sified during the first half of the new year, with advances as autumn ap proaches. Over-all, we look for another increase in living expenses of over 3%. . . and it would not surprise us if the 16 There will be reoeated should rise to the r nere ^win. be repeated ^vei The .. ba d boys’’ will continue to be soaring serv ice costs — especially medi cal — and upspirals in trans portation and finished—goods tags. Food may inch up a lit tle more as processing costs mount further; but prospect ive plentiful supplies will act as a controlling factor. 28. Total cash receipts from farm rhafketings should ad- Vandb modefateljr 6V*r fig-1 ulres fob 1067; however, the Felehtless up-pUsh of costs j will take it toll, and far mers’ het income will do well to improve-even slightly . . . notwithstanding some re lief firom higher government; payouts. Large marketings promise to restrain cattle quotes and hold this source of farm income in its recent low profitability groove. Meat prices, however, propped by bulgihg expenses, will be well maintained to firmer for the year, the consumer with storage facilities may benefit from time to time by watch ing carefully for sales and taking advantage of any buy ing opportunities provided by occasional runs of cattle fed to extra-heavy weights. Ap parent determination by growers to cut babk oh poul try output thretens to edprive the housewife of one of her most prolific sources fef rea- sohably priced meat. 29. Real estate will be a many-sided market in 1968. Prices for single - family homes will continue to ad vance as construction fails to satisfy risitig demands and as all building costs move higher. . . particularly during the first half. Demand for rentals in the middle and lower brackets will gain steadily:' however, ability to satisfy these needs will be severely hamstrung by even more costly and scarcer mortgage money. Speculative purchases and the salability of vacant property—especial ly that irt less desirable areas — will suffer from the dry ing-up of fuhds to carry such parcels. Broadly, the better ment that set in during the final six months of 1967 will probably not be maintained long in 1968. (Continued On Page 8) Consult ALVIN W. HUEBLE About this question: 4< Fire insurance can never replace the treasured and unique personal belongings lost in a fire—such as photographs, k e e p- B kes, family jewelry, irlooms and collec tor's items. 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