Bernstein believes that the country can hardly suffer more acutely under devaluation then under the advanced inflation which prevailed a year ago. He maintains that if the time, effort, funds, and personnel heretofore involved in a controlled economy can be freed and diverted toward an intensive program of development, Israel will emerge eventually with a more reassuring standard of living. Meanwhile, Israel is slowly being strangled by the Arab blockade, the denial of trade with her neighbors and the persistent shortages of foreign exchange, raw materials, and skilled labor. Six months ago there was too much money in circulation and the shops were empty. Today there is no money and the shelves are full.
Prices are high and there are no buyers.
The government took what was left in a recall of general currency with an enforced 10 per cent loan in cash and deposits. Thus the economic pendulum has swung with astonishing rapidity and changed the country's habits almost overnight. Devaluation has also brought serious curtailments in production and rising unemployment. Palestine has not known any kind of normalcy for fifteen years, and the Israeli is conditioned by long experience to an existence of extreme frugality and self-denial. Since the formation of the state five years ago, he has existed on a diet of fish, vegetables, hope, and resolution.