THE PRESIDENT'S DAILY BRIEF 12 FEBRUARY 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0005993742
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 12
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: February 12, 1973

Declassified in Part - Sanitized Copy Approved for Release 2016/06/14 : CIA-RDP79T00936A011500010038-8
The President's Daily Brief
12 February 1973
5
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Exempt from general
declassification schedule of E.O. 11652
exemption category 5B(1),(2),(3)
declassified only on approval of
the Director of Central Intelligence
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FOR THE PRESIDENT ONLY
THE PRESIDENT'S DAILY- BRIEF
12 February 1973
PRINCIPAL DEVELOPMENTS
Major money markets are closed while key powers are
'attempting to organize a conference to deal with
the monetary crisis. Any adjustment of exchange
rates will include appreciation of the mark and the
yen relative to the US dollar. (Page 1)
Some of. the 300 North Vietnamese tanks and armored
vehicles that started into the infiltration system
last fall are crossing into South Vietnam and Cam-
bodia. The military situation in South Vietnam is
virtually unchanged. (Page 2)
There is still sharp fighting at a number of loca-
tions in southern Laos. (Page 3)
In the MBFR talks the Soviets appear to be angling
toward discussion of their forces in Hungary in re-
turn for discussion of US forces in Italy, and per-
haps Spain. (Page 4)
Uruguay's President Bordaberry appears on the verge
of resigning. (Page 5)
President Sadat's security' adviser has returned to
Egypt from Moscow. (Page 6)
FOR THE PRESIDENT ONLY
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FOR THE PRESIDENT ONLY
INTERNATIONAL MONETARY DEVELOPMENTS
The major powers are attempting to organize a
high-level international conference to deal with the
monetary crisis. Several discussions have already
been held or are in process. There is still no of-
ficial word on the results of the meeting Friday
night of the British, French, and German finance
ministers in: Paris, but all three nations and Japan
announced yesterday that their currency markets
would not reopen after the weekend. Elsewhere, cen-
tral bankers are meeting in Basel, and a special
Japanese envoy is in-Bonn for urgent talks. West
Germany, which bore the brunt of this round of cur-
rency speculation, was the last major nation to an-.
nounce market closing. '
Its alternatives clearly were unpalatable.
A two-tier foreign exchange system would .
be extremely difficult for Bonn to manage.
West Germany's huge trade surplus would .
create inordinate pressures on the mark
designated for use in commercial trans-
actions. Moreover, the Federal Government
has little experience in handling economic
controls of the complexity needed to as-
sure success of such a system. A unilat-
eral float wouldfly in the face of re-
peated public statements and unacceptably
impair the competitive position of German
industry. Continued large-scale interven-
tions in support of the dollar have already
become prohibitively expensive, both fi-
nancially and politically.
The exchanges presumably will remain closed
until an agreement on adjusting exchange
rates can be worked out. Any adjustments
clearly will include appreciation of the
West German mark and Japanese yen relative
to the US dollar. Japanese officials have
already indicated their willingness to
revalue the yen in the context of an in-
ternational realignment. Solutions for
other trade and monetary issues are likely
to require extensive negotiations, since
there are major differences among not only
the European Community, Japan, and the
United States, but also among the EC mem-
bers themselves.
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SOUTH VIETNAM
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554114 2-73 CIA
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FOR THE PRESIDENT ONLY
VIETNAM
Recent intercepts show that some of the more
than 300 North Vietnamese tanks and armored vehicles
we had noted moving through Laos in October and No-
vember are now crossing into South Vietnam and Cam-
bodia. One message places a tank group in an area
that has been used by the Communists for funneling
supplies to the coastal provinces of central South
Vietnam. Another intercept shows a tank group
headed for the COSVN region.
In North Vietnam itself, fresh armored units
are moving south in the logistic pipeline. Some of
them could reach the border in the next week or so.
North Vietnamese gunners have increased shell-
ing of South Vietnamese Paratroopers trying to elim-
inate a Communist salient southwest of Quang Tri
City. We have intercepted North Vietnamese orders
to infantry units to disrupt an anticipated govern-
ment counterattack in this area.
Similar orders have been issued to North Viet-
namese units in the Que Son Valley. There the Com-
munists have been attacking government positions to
forestall South Vietnamese efforts to move back
onto high ground overlooking the enemy-held district
capital, Hiep Duc. 25X1
25X1
In southern Quang Ngai Province, government
forces have made little progress toward the recap-
ture of Sa Huynh and are stalled about five miles
away. -Pr?dent Thieu has ordered a Ranger. group
to the province to fill a gap left by departing
South Korean units. The Communists appear to be
defending the coastal area around Sa Huynh with at
least three main force regiments.
In the central highlands, the enemy has kept
Route 14 closed both north and south of Pleiku.
However, in the southern half of South Vietnam, all
major roads and waterways are reported open.
2
FOR THE PRESIDENT ONLY
25X1
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LAOS: Bo!ovens Plateau Area
106
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Paksong
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.Government-held location
?Communist-held location
554113 2-73 CIA
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FOR THE PRESIDENT ONLY
LAOS
Sharp fighting continues in the south. On
Saturday North Vietnamese shelling and ground at-
tacks dispersed at least five of the eight dis-
pirited irregular battalions west of Saravane.
Most of these units are now attempting to regroup
in new positions about 15 miles east of Khong ?
Sedone in order to block a possible North Viet-
namese effort to add to Communist holdings in the
Se Done Valley before a cease-fire..
To the south, the Communists areconcentrating
on mopping up the remaining government positions
around Paksong. Government Commanders are taking
advantage of the lull to reassemble some of their
battered forces along Route 23, about five miles
west of the town. Meanwhilet a 1,400-man irregular
force is pushing slowly toward PakSong from:Thateng.
.The.movement-of these irregulars may
forestall efforts by the North Vietnamese
to eliminate the..government's foothold
on the western Bolovens.
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FOR THE PRESIDENT ONLY
MBFR
On Saturday, the Soviet delegation to the pre-
paratory talks on Mutual and Balanced Force Reduc-
tions stated as a "final" position that either Hun-
garyishould be excluded from direct participation
in the negotiations or that Italy and Hungary should
participate together. Chief Soviet delegate Khlestov
noted that the Hungarian problem could have been
avoided if the West had accepted Moscow's earlier
proposal that all delegations have equal status
when the talks begin.
NATO powers originally considered Hungary
a full participant and thought they had
Budapest's consent for this status. Sub-
sequently, however, Soviet delegates an-
nounced that Hungary wished to be an ob-
server. Italy does not wish to be a full
participant.
One effect of the Soviet position could
be to slow the talks. The Soviets are
aware that the Benelux states tend to Zink
their participation with that of Hungary,
and that most NATO powers support Italy's
wish. Moscow appears to be angling toward
a quid pro quo that would include ulti-
mate discussion of its forces in Hungary
'in return for discussion of US forces in
Italy, and perhaps Spain. Whether intended
or not, the question of Hungarian partici-
pation has driven Romania from center stage
and puts the matter of Bucharest's full
participation further in doubt.
A Romanian diplomat has reported that For-
eign Minister Macovescu is saying that
Romania has been duped by the US and that
the superpowers have secretly agreed to
prevent Romania's full participation in
MBFR. The diplomat said these views ap-
peared to be shared by officials at higher
levels in Bucharest. The source added,
however, that if all else fails, Romania
is prepared to accept observer status.
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FOR THE PRESIDENT ONLY
URUGUAY
President Bordaberry, having lost his battle
to keep the military out of politics, now seems
ready to resign. Bordaberry accepted the military's
demand that they be allowed to name the new ministers
of defense and interior. He apparently is having
difficulty stomaching the rebellious generals' de-
mands for policy changes. The most important of
these are for land reform, an end to official cor-
ruption, and measures to stabilize the deteriorating
economy.
If Bordaberry accedes to the policy de-
mands of the dissident army and air force
officers, he would be president in name
only. His only bargaining chip seems to
be that the military are anxious to pre-
serve constitutional forms and for this
purpose they might rather have him retain
his nominal post.
Should Bordaberry resign, the vice-presi-
dent or a civilian member of congress
would be in the constitutional line of
succession. Whoever takes office, how-
ever, would almost certainly be a creature
of the generals, prepared to be responsive
to their demands for change.
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FOR THE PRESIDENT ONLY
NOTE
USSR-Egypt: The talks in Moscow between Pres-
ident Sadat's security adviser Hafiz Ismail and
Soviet leaders from 6-10 February apparently focused
on achieving common understandings prior to any re-
examination of the Middle East issue. Although the
Soviets have offered no new initiatives, they assume
that new efforts will be made toward a settlement in
the next few months and apparently want to reassert
their position as guardian of Arab interests in ad-
vance of such efforts. Both sides appeared to con-
sider the talks as a significant step in working
out a new relationship following the Egyptian ex-
pulsion of Soviet military, advisers last year.
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Top Secret
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