National Geographic : 1993 Jan
above the fireplace, meet the seven members of the Board of Gover nors of the Federal Reserve System. At the head of the great board table sits Chairman Alan Greenspan. Having studied reports of economic conditions across the country, they'll now discuss and vote on what actions the Fed should take. And what has the Fed done lately? It lowered the discount rate step by step, from 7 to 3 percent, in order to encourage recovery from the severe recession that began in 1990. At the same time, the increase in the money supply has been kept modest: between 2.5 and 6.5 per cent annually, in the hope that inflation can be brought down below 2 percent a year. s ARAB OIL WEALTH was the money phenomenon of the 1970s, so in the '80s was the Japanese money machine. I learned about it in Tokyo. True, the Japanese had been selling lots of cars and elec tronic stuff around the world and saved lots of yen and put them into the banks-but that wasn't the half of it. As is the Japanese way, manufac turing companies and finan cial institutions paid only minuscule dividends and kept the bulk of their profits as reserves. With those profits as col lateral they borrowed cheap ly to buy real estate, which rose to ever higher paper val ues. With real estate as col lateral, they borrowed to buy shares on the Tokyo Stock Exchange, which rose im pressively as well, providing h A kind of money called food stamps helps some 25 million Americans stock theirpantries. In Kansas City, Missouri, Angela Freeman works on herfood budget as her daughter Martha looks on. Freeman had received $318 in stamps on the first of the month. Two weeks later she was down to $63. "By the middle of the month, most people have spent them all," says Linda Kincaid of the Don Bosco Centers, a social services agency where Freeman attended work shops on budgeting. Illegal trading is not uncommon. Typically, a recipient sells stamps for, say, 50 cents on the dollar to a grocery-store em ployee who then redeems them for full value. Investigator Robert Hillman of the U. S. Department ofAgricul ture sits in a confiscated car laden with guns and illicit drugs, all bought by food-stamp scams.