The Last Time This Happened, America Borrowed in Swiss Francs

In 1978, the dollar fell so far that the United States borrowed money in Swiss francs and German marks. Today, the 10-year Treasury is above 5% and the Fed is raising rates again. This is 1970s inflation explained, and why that history matters now. On Halloween night 1978, the dollar hit a record low in Tokyo. In 13 months it had lost 38% of its value against the Swiss franc. The next day, Washington announced a $30 billion rescue, and part of it was something nobody expected: the US Treasury would borrow in someone else's money. The "Carter bonds." In this video: how the dollar slid in 1977–78, the memo that warned America "would probably have to repay more dollars," the Treasury Secretary who called foreign-currency bonds "both ineffective and undesirable" and then sold them anyway, the rescue that gave the Dow its biggest point gain up to that day, and how it all ended with Paul Volcker's Saturday-night press conference, 20% interest rates and 18.63% mortgages. Then we come back to 2026: a second wave of inflation, an energy shock, the Fed's first hike in three years and foreign governments selling US debt. What's the same as 1978, what's different, and what it means for your mortgage and your savings. Do you think the Fed will have to go much higher? Or is this a false alarm? Tell me in the comments. ▶️ Every American crisis that was supposed to be impossible: https://youtu.be/wIyL4r32I-o 📚 SOURCES US Treasury testimony to the Joint Economic Committee, Dec 14, 1978 (FRASER): https://fraser.stlouisfed.org/title/dollar-rescue-operations-domestic-implications-6059/fulltext Foreign Relations of the United States 1977–80, vol. III, doc. 104: https://history.state.gov/historicaldocuments/frus1977-80v03/d104 Federal Reserve, FOMC materials, Dec 19, 1978: https://www.federalreserve.gov/monetarypolicy/files/FOMC19781219material.pdf Federal Reserve History, Volcker's anti-inflation measures: https://www.federalreservehistory.org/essays/anti-inflation-measures US Treasury, Exchange Stabilization Fund history: https://home.treasury.gov/policy-issues/international/exchange-stabilization-fund/exchange-stabilization-fund-history Time, "The Squeeze of '79": https://time.com/archive/6880599/the-squeeze-of-79/ Currency Thoughts, "A Day to Remember" (Nov 1, 1978): https://currencythoughts.com/2023/11/01/a-day-to-remember-2/ Trading Economics, US 10-year Treasury yield: https://tradingeconomics.com/united-states/government-bond-yield Peter G. Peterson Foundation, interest costs on the national debt: https://www.pgpf.org/programs-and-projects/fiscal-policy/monthly-interest-tracker-national-debt/ Wolf Street, foreign holders of US Treasuries (Aug 17, 2026): https://wolfstreet.com/2026/08/17/foreign-central-banks-governments-dumped-treasuries-led-by-china-hong-kong-japan-which-raised-usd-for-yen-invention/ Inflation data: US Bureau of Labor Statistics (CPI-U). 🎞️ ARCHIVE AND CREDITS Archival photos and film: National Archives, Jimmy Carter Library, Library of Congress, Federal Reserve, The White House, CIA, US Coast Guard, IMF (public domain), via Wikimedia Commons. Photo: LBM1948, CC BY-SA 4.0, via Wikimedia Commons (Tokyo, 1978) Photo: Hans Krebs, Comet Photo AG / ETH-Bibliothek Zürich, CC BY-SA 4.0, via Wikimedia Commons (Swiss National Bank gold reserve, 1975) Photo: MeanieHyaena, CC BY 4.0, via Wikimedia Commons (US Treasury) Photo: Rchuon24, CC BY-SA 3.0, via Wikimedia Commons (US Treasury) Photo: AgnosticPreachersKid, CC BY-SA 3.0, via Wikimedia Commons (Eccles Building) Photo: Kakidai, CC BY-SA 4.0, via Wikimedia Commons (Japan Ministry of Finance) Photo: Ank Kumar, CC BY-SA 4.0, via Wikimedia Commons (Swiss National Bank, Paradeplatz) Photo: Dontworry, CC BY-SA 3.0, via Wikimedia Commons (Deutsche Bundesbank) Photo: Arashiyama, CC BY-SA 3.0, via Wikimedia Commons (Helmut Schmidt, 1979) Photo: Epicgenius, CC BY-SA 4.0, via Wikimedia Commons (National Debt Clock) Photo: Downtowngal, CC BY-SA 4.0, via Wikimedia Commons (gas prices) Video: Mitchell Wenkus / Wikimedia Foundation, CC BY-SA 3.0, via Wikimedia Commons (Washington DC) Video: Riccardo and Coral, CC BY 3.0, via Wikimedia Commons (American supermarket) Stock video and photos: Pexels. Music: YouTube Audio Library. This video is for educational purposes only and is not financial advice. #Inflation #FederalReserve #DollarCrisis