The dollar was already falling, and with the start of the third wave of selling, all in a period of less than ninety minutes, the drop grew steeper still. In Europe, traders on their way home heard their cellular phones start beeping to call them back. Something unexpected was afoot. Analysts wondered if it had anything to do with the developing sex scandal within the American government. Europeans always wondered at the American fixation with the sexual dalliances of politicians. It was foolish, puritanical, and irrational, but it was also real to the American political scene, and that made it a relevant factor in how they handled American securities. The value of three-month U.S. Treasury notes was already down 19/32 of a point-bond values were expressed in such fractions—and as a result of that the dollar had fallen four cents against the British pound, even more against the Deutschmark, and more still again against the yen.

"What the hell is going on?" one of the Fed's board members asked. The whole board, technically known as the Open Market Committee, was grouped around a single computer screen, watching the trend in a collective mood of disbelief. There was no reason for this chaos that any of them could identify. Okay, sure, there was the flap over Vice President Kealty, but he was the Vice President. The stock market had been wavering up and down for some time due to the lingering confusion over the effects of the Trade Reform Act. But what kind of evil synergy was this? The problem, they knew without discussing, was that they might never really know what was happening. Sometimes there was no real explanation. Sometimes things just happened, like a herd of cattle deciding to stampede for no reason that the drovers ever understood. When the dollar was down a full hundred basis points-meaning one percent of value-they all walked into the sanctity of their boardroom and sat down. The discussion was rapid and decisive. There was a run on the dollar. They had to stop it. Instead of the half-point rise in the Discount Rate they had planned to announce at the end of the working day, they would go to a full point. A strong minority actually proposed more than that, but agreed to the compromise. The announcement would be made immediately. The head of the Fed's public-relations department drafted a statement for the Chairman to read for whatever news cameras would answer the summons, and the statement would go out simultaneously on every wire service.