A Letter From The Publisher: Jan. 10, 1983

When journalists and bankers consider a financial crisis, they face the same dilemma: talking about the bad news may make matters worse. The prophecy becomes self-fulfilling. As a result, says Correspondent Lawrence Malkin, who reported from Europe for this week's cover story on international debt: "Monetary officials speak in guarded code words, and commercial bankers in doubletalk." Like many other economic analysts, Malkin suspected for some time that a serious global debt problem was at hand but felt cautious about his suspicions. Not until a banker in Basel dropped his defenses over a beer and unambiguously warned him of the frailty of the Eurodollar market did Malkin decide to push ahead on the story.

Financial tremors seem to be Malkin's lot. While in London in 1967, he covered the devaluation of the British pound. In 1981 he spent his Christmas holiday reporting the implications of martial law on Poland's unpayable debt. In deed, as a journalist moving around the world for two decades, he has been forced to maintain bank accounts in half a dozen countries and to watch helplessly as currencies fluctuated.

Senior Correspondent Frederick Ungeheuer, who has covered financial news for TIME for 20 years, found the bankers he talked to unusually forthcoming. So did Washington Correspondent Gisela Bolte. "Normally, bankers give us only tidbits," she says. "But this time around, most of them seemed eager to bring some perspective to the situation. They were surprisingly voluble." Staff Writer Jay Palmer, who wrote the cover story, enjoyed a close look at the world of finance as a London stockbroker, then joined London's Financial Times, going to its New York bureau just before the 1973 OPEC crisis.

At TIME he spent three years writing in the Economy & Business section, and since then has written stories on financial affairs for the International editions. Reporter-Researcher Naushad Mehta, who worked with Palmer on recent stories about Swiss banks, the Turkish economy and aid to Third World countries, knows the troubles of struggling economies firsthand. When the Indian rupee was devalued by 36.5% in 1966, Mehta, then a Bombay schoolgirl, saw the value of her pocket money dwindle abruptly. "It was," she recalls vividly, "quite a shock. The kind of thing you remember."