Tape 199 - Gold-IMF auction; potato futures; visit to the White House and the economy; recession 1978?

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-	Hello, this is David Francis,	0:02
	Financial Editor of the Christian Science Monitor.	0:03
	I'd like to welcome you once again,	0:06
	on behalf of Instructional Dynamics Incorporated	0:09
	to a visit with MIT's Nobel prize winning economist	0:12
	Paul Samuelson.	0:15
	We are recording this chat in early June,	0:17
	just after the International Monetary Fund	0:21
	auctioned 780,000 ounces of its gold.	0:24
	The average price of the winning bids	0:28
	was $126.98.	0:30
	Dr. Samuelson, do you see any significance	0:35
	for the world in this transaction?	0:38
-	Well, David I think this has been a case	0:41
	of not very much ado about not very much.	0:43
	The price of gold at the beginning of May,	0:49
	when this first of what is promised	0:52
	to be a series of auctions by the IMF was announced	0:55
	was exactly where it is this morning.	0:59
	It, in anticipation of the series of auctions	1:03
	had fallen to its low since the end of 1974,	1:08
	and was quoted somewhere between a $1.26,	1:14
	$126 and ounce and $127 an ounce,	1:19
	and that's exactly where it is after the auction.	1:22
	The auction I think was a success,	1:26
	but how could it have been otherwise?	1:30
	The amount is really minuscule.	1:32
	It's about one and a half week's gold production	1:38
	for South Africa.	1:41
	So, you can be very sure	1:44
	that although the central banks	1:46
	will not be allowed for a year or so	1:49
	themselves directly to participate in these auctions,	1:52
	you can be sure that countries like France,	1:56
	with a keen interest in gold,	1:59
	and with a very good friend	2:01
	at the Bank for International Settlements,	2:03
	would have had some way of putting in a supporting bid	2:04
	just in case the Dutch auction had tended to move the price	2:09
	of gold let's say down to $100 an ounce.	2:13
	This would have meant a book loss	2:16
	of the gold held by the major central banks	2:19
	of considerable magnitude,	2:23
	and although we're getting gold out of our system,	2:25
	we haven't yet quite succeeded in doing so,	2:27
	and therefore, they have, the central banks do,	2:31
	a watching brief on the price of gold.	2:34
	So the price was about as low	2:36
	as it could decently have been,	2:40
	and the price did hold there.	2:42
	But remember, we're going to have,	2:44
	in another six weeks, 16 times a year,	2:47
	the same amount being brought on to the market.	2:51
	It's just as if some new, very lush gold mine	2:53
	had been discovered in Russia or in South Africa,	2:57
	and this will put some downward pressure	3:01
	on the price of gold compared to what it otherwise	3:04
	would have been.	3:07
	Now, I can't tell you whether this is a good or bad time	3:08
	to buy gold.	3:14
	The trouble with gold as a holding	3:16
	is that unless you're a gypsy,	3:19
	or unless you're a footloose refugee	3:22
	about to make your break for some new country,	3:25
	the price of gold has to rise considerably	3:31
	just for you to break even.	3:33
	The carrying charges, the foregone interest rates,	3:34
	and so forth mean that ordinary, honest,	3:38
	taxpaying citizens have to have an increase	3:41
	in the price of gold probably on the order of magnitude	3:46
	of 10, 12% every year just in order to break even	3:49
	in comparison with their other holdings.	3:54
	And so, the time will come when the price of gold	3:55
	will be depressed because of the demonetization of gold,	4:01
	and then because of the normal demand of industry,	4:07
	of dentistry, of jewelry, of display,	4:11
	and there is a normal hoarding demand for gold	4:15
	on part of people in parts of the world	4:18
	where it's customary to hoard gold,	4:20
	and also, people who have a beef against government,	4:24
	and maybe have a little problem with their tax collector	4:30
	who don't want the lack of anonymity	4:33
	that comes with holding ordinary assets.	4:36
	So that time will come, no doubt,	4:38
	when, as the general price level rises,	4:41
	gold will rise more or less the way copper	4:45
	and OPEC oil rise with the general price level.	4:49
	But whether that time has yet come or not,	4:54
	I'm not wise enough to know,	4:58
	and I don't think that anybody else is.	5:00
-	Seems to be the problem with gold	5:04
	is that it's subject to government manipulation,	5:05
	and if Russia decides to sell some of its gold	5:07
	to pay for its wheat,	5:10
	this would depress the price of gold.	5:12
-	That's true, on the other hand,	5:14
	that's also true of platinum.	5:15
	Russia's a great supplier of that.	5:18
	And we might ask ourselves, what crop,	5:20
	is it not the case that government manipulation	5:24
	is a relevant factor for a speculator	5:29
	to take into account?	5:32
	I have reference to the meeting	5:34
	which just broke up in Nairobi	5:36
	which is asking that all of the third countries,	5:38
	and all the staple producers around the world,	5:43
	be given some kind of protection in the way of buffer crops,	5:45
	which would be at the behest of bureaucrats and parliaments,	5:49
	and that's one of the risks,	5:56
	as a commodity speculator, or as a commodity processor,	5:59
	or I dare say as a consumer, that we all have to bare.	6:04
	As President Harry Truman said,	6:09
	if you can't stand the heat, get out of the kitchen,	6:12
	and commodity speculation may not be the place for you.	6:15
	Dave, we might just make a passing reference	6:19
	to the Great Potato Scandal,	6:23
	not very far from where we're sitting,	6:25
	in Maine, of course, the Maine potato crop	6:27
	went off the board rather ingloriously	6:33
	with an actual default to the tune	6:36
	of several millions of dollars.	6:40
	Well, the whole story is not yet told.	6:44
	I'm often asked whether there was manipulation	6:47
	on the part of the short sellers,	6:50
	and my answer is, probably,	6:52
	but there also probably, in this case,	6:55
	was some manipulation in the closing days,	6:58
	the end game days of buying up	7:01
	train cars and all of the things	7:07
	which were bottlenecks for the delivery of Maine potatoes.	7:08
	Of course, the exchange itself will make good,	7:12
	but it will make good at an adjudicated price.	7:16
	The late President Hadley of Yale used to say	7:21
	that God almighty doesn't know the marginal cost	7:25
	of moving freight from New York to Chicago.	7:28
	Well, I'm afraid that this is the case	7:31
	where the Devil himself doesn't know	7:33
	what the fair price would be to settle those contracts.	7:37
	I'm sure there were some people in good faith,	7:41
	I'm now talking about small people,	7:43
	not the very large people,	7:45
	who good faith has no meaning	7:46
	when there is a tacit meeting of minds to affect prices,	7:49
	but I'm sure there were people in good faith	7:53
	who in the closing days of that market	7:56
	innocently walked into it thinking that the shorts	7:59
	were gonna be squeezed very hard,	8:02
	and bought at a very high price,	8:04
	thinking the price would go still high.	8:07
	And, I doubt, if adjudication goes the way	8:08
	it usually does, which is to look	8:13
	for some kind of a golden mean between the claimants,	8:15
	I doubt that those people who got in at the last moment	8:18
	are going to have their,	8:23
	what they thought were legitimate expectations, fulfilled.	8:24
	I guess it's a lesson to us all	8:28
	that as adults, we better be sure	8:30
	what game it is we're sitting down	8:34
	to play a round of cards in.	8:37
-	Do you think this potato futures	8:41
	play a useful social role in the case of potatoes?	8:42
-	Yes I do, I don't think that there's any reason	8:46
	why the Maine potato is so different from the Idaho potato.	8:50
	That there can't be a contract found	8:54
	which will allow,	8:57
	with adjustments for grade and place settlements.	9:00
	But I think that the potato market	9:04
	does provide a useful function.	9:09
	I say this, because Holbrook Working,	9:12
	who was at the Food Research Institute	9:16
	at Stanford University for many years, who's still alive,	9:18
	but spent a lifetime studying these things,	9:21
	studied markets like the onion market,	9:23
	which at one time was unorganized.	9:25
	There was no organized futures market in onions.	9:28
	Then there was a futures market in onions.	9:30
	And then because of some incidents,	9:33
	a little bit like these potato incidents,	9:36
	it was wiped out, and is still wiped out.	9:38
	And what Holbrook Working did was to study	9:40
	the behavior of prices in each of those three regimes	9:42
	to see which one behaved the best from the social viewpoint,	9:46
	not from the viewpoint of the speculator,	9:50
	and his finding which seemed reasonable to me	9:51
	in terms of the data he gave and the arguments he gave	9:57
	was that the onion market,	10:00
	when it was organized, did serve a useful purpose.	10:02
	I may say, David, that part of the political pressure	10:06
	to wipe out these markets	10:11
	comes from the ordinary person in the street	10:13
	who thinks of this as no more than gambling.	10:16
	It's just a numbers game,	10:19
	and it's a numbers game which absolutely played	10:21
	by richer people, and puritanically,	10:24
	they want to wipe it out.	10:28
	But, I believe, in the background,	10:31
	there are also interests who use this,	10:34
	what you might call ordinary, vulgar prejudice	10:38
	against all speculation, for their own purposes.	10:41
	And these are the monopsonists, the processors,	10:45
	the big buyers.	10:48
	And what they find is that when there's an organized market	10:50
	there's more information, the farmers really get	10:54
	a better break in the buying.	10:57
	And so, it's like the case of the lobbyists	10:59
	in say the state of Illinois,	11:05
	or in Albany, in New York, or here in Massachusetts	11:08
	who are against	11:11
	removing interest rate ceilings on small loans.	11:16
	And you would say these lobbyists are consumers.	11:20
	Well, many of them are.	11:23
	You'd say they're philanthropists,	11:24
	they're interested in the poor person	11:25
	who has to pay high rates.	11:26
	Well, many of them are.	11:27
	But I have to tell you also	11:28
	that many of them are loan sharks.	11:30
	Because they know that what creates	11:32
	the best business for them,	11:35
	this was documented years ago	11:37
	by the Russell Sage Foundation,	11:38
	what creates the best business for them	11:39
	is unrealistically low interest rates,	11:41
	at which poor people can't get the money,	11:45
	in which case they're driven right down the corral	11:47
	into the welcoming arms of the loan sharks.	11:50
	So you always have to be suspicious	11:54
	about what's behind the Robin Hood slogan.	11:56
	Sometimes it's Robin Hood,	12:00
	but sometimes it's a Sheriff Nottingham	12:01
	who's playing both sides of the street.	12:04
-	Oh yes, going back to the gold picture,	12:05
	I find it interesting that in this situation,	12:08
	the best-developed countries are allied	12:11
	in interest with South Africa,	12:15
	in having a high price for gold,	12:18
	because the less-developed countries	12:20
	are the beneficiaries of the IMF sales.	12:22
-	Yes, that's true, because,	12:25
	the provision is that one-sixth of the IMF gold	12:28
	is to be used for the benefit of the third world.	12:33
	However, I think that this is fairly small potatoes.	12:38
	By the way, let's just keep things in focus.	12:41
	I don't say that every Assistant Professor	12:46
	could have been in this gold market,	12:48
	but all you needed was a $50,000 ante	12:50
	to have made a bid this last time,	12:57
	and you could have borrowed, no doubt, part of that,	12:59
	pledging the gold that you get against it,	13:02
	putting it in escrow.	13:05
	And we're only talking about $250,000 worth of gold,	13:06
	which was the minimum amount that anybody could buy.	13:10
	And I dare say that those people who did buy,	13:13
	I'm now talking about the little fellas,	13:15
	not the big fellas who may have been supporting the price,	13:17
	maybe shaved off some commission charges	13:21
	and got themselves not a bad deal.	13:23
	Of course, now you have the problem	13:26
	of what do you want to do with $250,000 worth of gold,	13:27
	bought on borrowed money,	13:31
	which, by the way, is the usual way	13:32
	that anybody collateralizes, holds gold.	13:34
	That's why it's misleading to think	13:38
	that when the price of gold dropped as it did,	13:39
	in 1975, from just about $200 an ounce	13:42
	to $130 an ounce, you need to say,	13:46
	well, which one of us has not had a common stock	13:48
	which dropped by that amount?	13:51
	That is not the story.	13:53
	The story is that you're in there on margin,	13:55
	and you're pyramided.	13:57
	And when the price of gold dropped	13:59
	as little as from $195 down to $175	14:01
	you got a call from your friendly banker,	14:04
	saying, sorry old chap.	14:07
	However, I really don't want to pose here	14:08
	as an enemy of gold, or any form of innocent merriment.	14:11
	All I would say to people is,	14:16
	that if you're going to sit down to this card game,	14:18
	you might as well know the odds.	14:21
	And I think that the worst odds by far	14:23
	are buying of these commemorative coins	14:27
	that people are buying.	14:29
	They think that they've got an asset,	14:31
	and of course, what they've got is a dust collector.	14:33
-	Yeah, I regard those as a ripoff,	14:36
	'cause usually the price of the gold content	14:37
	is much less than their actual price.	14:41
-	Yes, I'm sorry to say,	14:42
	that a lot of the official bodies	14:44
	are part of this ripoff, including the United States.	14:46
	The friendly U.S. government in our bicentennial year	14:49
	you know, is producing one ounce bicentennial coins.	14:52
	Now, we know what ounce of gold is worth, roughly.	14:57
	$127.	15:01
	A little fine printing on it,	15:03
	which would make it $127 and a half?	15:05
	(interviewer laughs)	15:07
	Alright, but what do you think
	your friendly Uncle Sam is selling these for?	15:09
	$400.	15:12
-	$400, oh wow.
-	So, if you have to buy gold coins,	15:14
	and there's something to be said for a person	15:15
	with a yen for gold that just can't be satisfied	15:17
	without having a gold holding,	15:19
	is they should buy gold coins,	15:21
	but at least buy the wholesale kind, the Krugers.	15:22
	Krugerrands from South Africa.	15:27
	You buy very low premium,	15:30
	and they're convenient and they're assayable.	15:32
	The trouble with buying a bar of gold	15:35
	is the moment you buy it,	15:37
	it's, so to speak, lost its good name,	15:38
	and when you want to sell it,	15:42
	it has to be assayed all over again,	15:43
	which is a very expensive process.	15:44
	So I wouldn't put the gold in my wine cellar,	15:48
	protected by your Pinckert and Rowland system,	15:53
	unless you're gonna hold it a long time.	15:56
	That's a pretty expensive way of doing it.	15:58
	Also, as every chemist knows, it's pretty heavy stuff,	16:00
	you want to be sure that your house foundation can stand.	16:04
	(they laugh)	16:07
-	I heard the other day
	of somebody who has what might be expected,	16:10
	they put some lead in the middle	16:14
	of some of these gold bars.	16:15
-	Oh, yes, you see,
	W.C. Fields said it so well,	16:18
	"You can't cheat an honest man."	16:19
	And the people who've been skirting the law,	16:22
	I don't want to point my finger in any particular scandal,	16:27
	but you know, right here in our Berkshire Mountains	16:30
	there was a big operation	16:33
	which is now under investigation by the SEC,	16:36
	and in Switzerland, involving,	16:39
	literally hundreds of millions of dollars,	16:42
	and they're now trying to see	16:44
	whether there even was an accounting for this.	16:45
	Now, I dare say they're gonna find	16:49
	every ounce of gold there.	16:50
	But it was certainly jumping the gun.	16:52
	It wasn't until December 31st, 1974	16:55
	that you or I or any God-fearing, honest,	16:57
	law-abiding American citizen	17:01
	could have an outright position in gold.	17:02
	We could have gold mine shares, of course,	17:04
	but we couldn't have an outright position in gold.	17:07
	Well, there were quite a number of elderly gentlemen,	17:09
	and gentleladies, who were putting their money	17:12
	through the Berkshires into Switzerland	17:18
	in various forms of gold,	17:21
	warehouse receipts and so forth.	17:23
	Questionable legality.	17:25
	Well, W.C. Fields would understand that.	17:29
-	Well, let's turn to the domestic economy.	17:31
	You were down in Washington recently	17:34
	discussing the picture with high government officials.	17:36
	What did you find out as to the economy?	17:39
-	Well, I was actually at a White House meeting.	17:42
	I was invited for lunch with the President.	17:46
	First question I asked, of course,	17:49
	was, is this a bipartisan lunch?	17:51
	We're right in the middle of primaries,	17:53
	and I was assured that yes,	17:56
	that other characters equally as dangerous as myself	17:58
	would be there.	18:04
	People like Walter Heller, and Arthur Okun,	18:04
	and Charles Schultz, and so I felt it was okay to go.	18:09
	On the other hand, when they brought in the cameraman,	18:14
	I was a little bit nonplussed,	18:17
	and since I happened to be sitting	18:18
	right on the President's left,	18:19
	I think the left was perhaps	18:20
	the proper position for me to have been sitting,	18:22
	and since it wasn't a wide-zoom camera,	18:25
	I began to receive inquiries from the rest of my friends	18:28
	as to whether I had changed my political allegiance,	18:32
	and I assured them that I was just as unsound as ever.	18:37
	(they laugh)	18:40
	That was not the case.
	Well, that was the kind of meeting	18:42
	where the only thing one can legitimately discuss	18:45
	is what one said oneself.	18:48
	But it was the day when the news came out	18:54
	that the first quarter strength,	18:56
	which we knew to be very strong,	18:58
	seven and a half percent real growth	18:59
	of the GNP after correcting for inflation.	19:01
	And the good news about the inflation,	19:05
	which was that it had gone below 4% in the first quarter.	19:07
	Well, along came the revisions,	19:12
	and instead of being revisions in the direction	19:14
	that unbelievers had expected,	19:18
	namely, writing down the real numbers,	19:21
	and writing up the rate of inflation,	19:24
	the revisions were even more pleasant to contemplate	19:26
	than the original numbers.	19:30
	If your notion of pleasantness	19:33
	is the stronger the economy's growing, the better,	19:35
	and if your notion of inflation is,	19:38
	that if in the short run, inflation is behaving very well,	19:42
	that's the best possible sign	19:46
	that in the longer run we may also have some luck.	19:48
	I may say that that last line of argument	19:51
	seems to me to carry some conviction.	19:53
	It's good news that the first quarter	19:58
	rate of inflation was low,	20:00
	because that gives us better hope	20:01
	that although we expect the fourth quarter of the year	20:04
	to show a higher rate of inflation than the first quarter,	20:07
	it may not show quite as high as we earlier feared.	20:10
	Particularly since the planting of the food crop	20:15
	has been very good.	20:20
	You know, it got in early, the crop,	20:22
	there's more planted now than at the usual time,	20:25
	and although there's always some place	20:28
	in the country which lacks rain,	20:29
	Minnesota is an example right now,	20:31
	by-and-large, the outlook could be,	20:34
	for a reasonably large corn crop.	20:38
	The soybean crop won't be quite as large,	20:41
	because so much of it is going into corn.	20:44
	They're competitive there.	20:46
	Well, it was right at the day of that meeting	20:48
	at the White House that the preliminary announcement	20:52
	came out, a little earlier perhaps than I would have learned	20:54
	if I stayed in Cambridge, Massachusetts,	20:58
	maybe 20 hours earlier,	21:00
	that the figures had been revised	21:02
	upward to eight and a half percent.	21:04
	And people differ in the way they accept that news.	21:06
	For myself, I thought that,	21:11
	the aphorism applicable to modern architecture	21:15
	perhaps applies here:	21:19
	Beyond a certain point, more is less.	21:21
	That is, I think eight and a half percent	21:25
	is getting to be a bit too much of a good thing.	21:28
	Now I realize that there authorities whom I respect	21:32
	who point out how early we are in the business cycle,	21:36
	and how far we are from capacity,	21:38
	and bottlenecks, in the labor market,	21:42
	or in almost all of our industries.	21:45
	And therefore, the faster we're now growing,	21:48
	the sooner we'll get the unemployed back to jobs.	21:51
	The sooner we'll be on our way	21:55
	toward reaching the goal of at least below 6%	21:58
	overall unemployment rate.	22:03
	But, for myself, I would like to have this	22:07
	be a long expansion, sustained,	22:12
	going through '77, into '78,	22:16
	and for that matter, since I'm getting my targets,	22:20
	I'd like to have the rest of this decade	22:23
	show makeup for the woeful behavior	22:25
	of the American economy in the first part of the decade.	22:30
-	Yes, Chase Econometrics says, predicts, in fact,	22:33
	that the economy will turn down in 1978.	22:37
	Do you think this sort of prediction is actually possible?	22:40
-	Well, Dr. Michael Evans of Chase Econometrics	22:45
	was perhaps of all the consensus forecasters,	22:50
	I call him a consensus forecaster,	22:53
	although he has his own idiosyncrasies,	22:56
	and his own strengths and perhaps weaknesses,	23:00
	he was the one who was nearest to the mark	23:04
	on the first quarter numbers.	23:05
	Seven and a half percent was his forecast.	23:08
	So, let us sing the praise of famous men	23:11
	while such praise is in season.	23:14
	And therefore, we read with greater interest his views.	23:17
	Now, of course what I think is of interest	23:20
	is not any flat-footed prediction	23:23
	by Dr. Michael Evans or anybody else	23:26
	that inflation's going to be worse than we think,	23:29
	or that we're going to move into recession	23:32
	last part of 1977, and by 1978 be well into it.	23:34
	What's interesting is the story he tells.	23:38
	What is the line of analysis	23:41
	by which he buttresses that argument?	23:44
	And I think that Chase Econometrics	23:47
	does have an interesting story to tell,	23:51
	and if I believed in it 100%,	23:53
	I would be a bit more apprehensive	23:59
	than I actually am now about the likelihood	24:03
	of the scenario that he's outlined being realized.	24:07
	I have before me, the sound cannot reproduce,	24:12
	but I will describe the chart that I have before me,	24:17
	which happens actually to be taken	24:20
	from the most recent Chase Econometrics forecast.	24:22
	This is a forecasting service,	24:28
	which very many corporations and banks,	24:30
	and I daresay, a few universities, also are subscribed to.	24:34
	And I find it very informative to read,	24:40
	along with that of some of the other consensus forecasters.	24:45
	Well this particular chart tries to estimate	24:48
	what the potential real Gross National Product	24:51
	for the nation is as we move into '77.	24:54
	And he gives what the Council of Economic Advisors,	24:59
	or the Congressional Budget Office,	25:04
	have estimated for the real GNP,	25:06
	and according to that potential	25:09
	we've got a lot of room to grow.	25:12
	We're still a baby in this recovery.	25:15
	We can grow, grow, at the pace we've been going,	25:19
	for several years before we run into the ceiling	25:24
	of our potential bottleneck.	25:28
	And he marks that A, and it's the sort of thing	25:30
	that most economists have used.	25:33
	It is a tool which was questioned very severely	25:36
	by Dr. Arthur Burns in 1962,	25:41
	in a famous speech of his criticizing	25:45
	the Camelot/Kennedy Council of Economic Advisors.	25:48
	But since then, the Federal Reserve has come around	25:53
	to using the tool of potential national product.	25:57
	That's par, then you see how far you are below par,	25:59
	and if you're very far below par,	26:03
	then that's both the potential for growth,	26:06
	but it's also a rather good sign for inflation	26:09
	because that gap between the actual GNP	26:12
	and the potential, producable GNP at full employment,	26:14
	properly defined, is a measure	26:19
	of the resistance to price advance.	26:22
	Well, he plots that, but then he gives	26:26
	an intermediate estimate, which is a good deal lower,	26:31
	but then he gives his own best estimate,	26:34
	and that is a great deal lower,	26:36
	so that he actually has the economy	26:38
	hitting the ceiling in '77.	26:42
-	Oh, yes.
-	And, of course, if everybody could agree with that,	26:47
	then there's much less room above us,	26:51
	and this recovery is a good deal older	26:54
	than we think.	26:58
	Now, his best estimate is, and we'll go along,	27:01
	not as strong as the first quarter,	27:04
	and in this, other forecasters agree with him,	27:06
	but that we will, by the end of '77,	27:10
	be growing less than the trend rate of the economy,	27:14
	and therefore, unemployment will be on the rise again.	27:19
	Indeed, there's not much reduction in the unemployment rate	27:21
	according to his most pessimistic forecast.	27:26
	Well, I always like to look at the different forecast,	27:31
	the optimistic and the pessimistic,	27:36
	and if you really want your blood to run,	27:38
	you just look at his second alternative forecast,	27:42
	which involves no investment boom,	27:46
	that's no boom in plant equipment expenditures	27:49
	in 1966 and 1967.	27:51
	And the bad news there is, we're already,	27:53
	I would have to say, on his numbers,	27:56
	are moving into a growth recession.	27:59
	Well, my best judgment is that that is too pessimistic.	28:01
	That, by the way, is also Evan's best judgment,	28:06
	'cause this is an alternative forecast.	28:09
	I would think it more realistic at this time	28:11
	to go along with the view of Albert Summers,	28:14
	the conference board whom I've quoted many times here.	28:19
	He gives, I'll just give the numbers,	28:24
	'cause our time is very scarce,	28:25
	he gives real growth eight and a half percent annual rate	28:27
	in the first quarter, dropping to just below 7%,	28:30
	but then going up in the third quarter	28:33
	to seven and a half percent,	28:35
	and 6% the last part of the year.	28:37
	Well, as far as he's concerned,	28:40
	up through the middle of '77, we have a healthy advance,	28:42
	but even he begins to show a growth recession after that.	28:46
	I must say, this is all very iffy,	28:49
	and we'll have to have more time to go into	28:52
	how one weighs the probabilities	28:55
	looking two years ahead, three years ahead,	28:58
	five years ahead.	29:01
-	Thank you very much.	29:03
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