THE PRESIDENT'S DAILY BRIEF 15 DECEMBER 1973

• Document Type: FOIA
• Collection: President's Daily Brief 1969-1977
• Document Number (FOIA) /ESDN (CREST): 0006007623
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 15
• Document Creation Date: August 14, 2016
• Document Release Date: August 24, 2016
• Publication Date: December 15, 1973

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Declassified in Part - Sanitized Copy Approved for Release 2016/07/19 : CIA-RDP79-160936A011900010013-1
The President's Daily Brief
15 December 1973
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Exempt from general
declassification schedule of E.O. 11652
exemption category 513(11.( 2).13)
declassified only on approval of
the Director of Central Intelligence
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THE PRESIDENT'S DAILY BRIEF
December 15,-1973
PRINCIPAL DEVELOPMENTS
Large-scale movements of facing Israeli and Syrian
forces apparently have occurred in the past few
days.
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Libya
Italy
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4)
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The Soviets
Japan\
(Page 6)
Japan's prices rose last month at the fastest rate
since the Korean War. Another boost in the central
bank discount rate seems likely. '(Page 7)
The continuing strengthening of the dollar may push
it above current central bank rates and test the
willingness of the Bundesbank and others to defend
the rates. (Page 6)
Notes on China's development of offshore oil re-
sources
appear on Page 9.
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ARAB STATES - ISRAEL
Large-scale movements of Israeli and Syrian
forces apparently have occurred along the Syrian
front over the past few days.
UN truce observers reported seeing heavy traf-
fic of Israeli tanks and wheeled vehicles near Al
Qunaytirah on Wednesday evening. Additional move-
ments of Israeli tanks and artillery were observed
west of Syrian-held Sasa that same evening. The
next night, the observers reported large-scale move-
ments of Syrian vehicles opposite Al Qunaytirah and
near Sasa on both sides of the Israeli salient into
Syria.
Substantial Israeli and Syrian forces are al-
ready stationed in the areas of the reported move-
ments, and it is not known whether the sightings
represent a redeployment of forces there or an aug-
mentation of them. For the past week,
Syria has been put-
ting its civilian and military forces on a wartime
footing.
signifi-
cant Syrian troop movements have occurred along the
Golan front and that Syrian forces there have been
reinforced. The reported Israeli troop movements
may be in reaction to the Syrian activity.
An assessment by the US defense attache in Tel
Aviv concludes that Israel's military leadership
does not seek renewed warfare and views the Geneva
conference as desirable, despite widespread fears
that Israel will be pressured into giving up the
fruits of victory in two wars.
(continued)
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In fact, an increase in terrorism on the West
Bank since October has caused Israel to impose some
drastic security measures there, while there have
been few terrorist incidents in Israel proper.
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JORDAN
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LIBYA-ITALY
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USSR
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JAPAN
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JAPAN
Inflation accelerated last month, with whole-
sale prices rising 3.2 percent to a level 22 percent
above November 1972. The energy crisis was a major
factor; fuel prices rose about 10 percent from the
previous month. The prices of copper and paper
also rose sharply.
Japan's prices rose faster in November than in
any month since the Korean War, despite the defla-
tionary impact of a record balance-of-payments
deficit during the month. Long-term capital out-
flows doubled from the October level and short-term
outflows increased significantly because of the
weakening of the yen. These outflows more than
offset a trade surplus of $380 million.
Tokyo's response to its inflation problem will
probably be another sharp rise this month in the
central bank discount rate--to at least 8 percent--
and a more austere government budget for the fiscal
year beginning April 1. In the short-term, such
measures are unlikely to slow the advance of prices
to an acceptable rate and they could intensify the
slowdown in economic activity that will result from
the energy crisis.
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INTERNATIONAL MONETARY DEVELOPMENTS
The dollar continued to strengthen this week,
rising to its highest average level relative to
other major currencies since the devaluation last
February. Growing confidence in the long-range
prospects of the dollar may push it above the cur-
rent central bank rates. This in turn will test
the willingness of the Bundesbank and others to
defend these rates.
West German officials have long regarded the
present central rate of 2.67 marks per dollar as
appropriate for maintaining long-range stability.
So far, the dollar has shown little tendency to
rise above this level. If substantial upward
pressures on the dollar occur, however, the Bundes-
bank may find that support for the central rate
would conflict with regional European and West
German priorities. An attempt to maintain the
2.67 rate, when all float currencies are weakening
against the dollar, could strain the European
joint float.
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Shanghai
?
HONG KONG
(U.K.)
TAACAO
NORTH og (Port.)
VIETNAM
Gulf
LAOS Tonokf in
555009 12-73'
06
TAIWAN
0
150 300 PHILIPPINES
Nautical Miles
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NOTES
China: Over the past two months, Chinese of
have been telling Japanese businessmen and
overseas Chinese leaders that Peking may consider
inviting foreign firms to participate in developing
offshore oil in China's Po Hai Gulf. Prospects for
earning foreign exchange and acquiring technology--
as well as for countering Soviet overtures to Japan--
have apparently softened Chinese opposition to earlier
foreign proposals for joint ventures. Crude oil out-
put in China last year reached 30 million tons, com-
pared with 7.5 million in 1965. As transportation
and handling problems are resolved, China could ex-
port 6 to 10 million tons annually by 1976.
France:
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