Inflation is the rise in the price of goods and services supplied in an economy.
As a monetary policy action, the federal reserve will increase the federal funds rate in order to reduce the flow of money supply to the economy. In other words, by making it more expensive for entities to borrow money, this will consequently reduce the amount of money that is circulating in the streets. By rule of supply of demand, as there is less money to buy products and services, the prices of goods and services will start to drop.
I come to you this evening to discuss the extremely important and rapidly changing circumstances in Southwest Asia. . . .
. . . Massive Soviet military forces have invaded the small, nonaligned, sovereign nation of Afghanistan, which had hitherto not been an occupied satellite of the Soviet Union.
Fifty thousand heavily armed Soviet troops have crossed the border and are now dispersed throughout Afghanistan, attempting to conquer the fiercely independent Muslim people of that country.
The Soviets claim, falsely, that they were invited into Afghanistan to help protect that country from some unnamed outside threat. But the President, who had been the leader of Afghanistan before the Soviet invasion, was assassinated – along with several members of his family – after the Soviets gained control of the capital city of Kabul. Only several days later was the new puppet leader even brought into Afghanistan by the Soviets.
This invasion is an extremely serious threat to peace because of the threat of further Soviet expansion into neighboring countries in Southwest Asia and also because such an aggressive military policy is unsettling to other peoples throughout the world.
This is a callous violation of international law and the United Nations Charter. It is a deliberate effort of a powerful atheistic government to subjugate an independent Islamic people.
We must recognize the strategic importance of Afghanistan to stability and peace. A Soviet-occupied Afghanistan threatens both Iran and Pakistan and is a steppingstone to possible control over much of the world’s oil supplies.
The United States wants all nations in the region to be free and to be independent. If the Soviets are encouraged in this invasion by eventual success, and if they maintain their dominance over Afghanistan and then extend their control to adjacent countries, the stable, strategic, and peaceful balance of the entire world will be changed. This would threaten the security of all nations including, of course, the United States, our allies, and our friends.
Therefore, the world simply cannot stand by and permit the Soviet Union to commit this act with impunity. Fifty nations have petitioned the United Nations Security Council to condemn the Soviet Union and to demand the immediate withdrawal of all Soviet troops from Afghanistan.
. . . [N]either the United States nor any other nation which is committed to world peace and stability can continue to do business as usual with the Soviet Union.
I have already recalled the United States Ambassador from Moscow back to Washington. He’s working with me and with my other senior advisers in an immediate and comprehensive evaluation of the whole range of our relations with the Soviet Union.
The successful negotiation of the SALT II treaty1 has been a major goal and a major achievement of this administration, and we Americans, the people of the Soviet Union, and indeed the entire world will benefit from the successful control of strategic nuclear weapons through the implementation of this carefully negotiated treaty.
However, because of the Soviet aggression, I have asked the United States Senate to defer further consideration of the SALT II treaty so that the Congress and I can assess Soviet actions and intentions and devote our primary attention to the legislative and other measures required to respond to this crisis. As circumstances change in the future, we will, of course, keep the ratification of SALT II under active review in consultation with the leaders of the Senate.
The Soviets must understand our deep concern. We will delay opening of any new American or Soviet consular facilities, and most of the cultural and economic exchanges currently under consideration will be deferred. Trade with the Soviet Union will be severely restricted. . . .
Along with other countries, we will provide military equipment, food, and other assistance to help Pakistan defend its independence and its national security against the seriously increased threat it now faces from the north. The United States also stands ready to help other nations in the region in similar ways.
Neither our allies nor our potential adversaries should have the slightest doubt about our willingness, our determination, and our capacity to take the measures I have outlined tonight. I have consulted with leaders of the Congress, and I am confident they will support legislation that may be required to carry out these measures.
History teaches, perhaps, very few clear lessons. But surely one such lesson learned by the world at great cost is that aggression, unopposed, becomes a contagious disease. . . .
