Kissinger, announced that “peace is the hand.” But the promised settlement resembling the 1954 Geneva accords, collapsed after the elections, and on December 18, Nixon ordered the most relentless bombing of North Vietnam of the war. Peace negotiations were resumed in Paris on Jan. 8, 1973. On January 27 a cease-fire agreement was reached. However, bombing continued in Cambodia until August.
In 1972 Nixon made diplomatic history with visits to Peking and Moscow. In China, Nixon began paving the way for an exchange of unofficial delegations a year later. In Moscow, he entered into a series of trade agreements, a treaty limiting antiballistic missile sites, and an agreement limiting offensive missiles. Soviet Communist Party chief Leonid Brezhnev traveled to Washington in June 1973 and still new accords were reached. A severe test of detente came in the following October as war broke put once more between Israel and Arab nations. Nixon ordered U.S. strategic and tactical forces around the globe onto alert after receiving reports of possible major Soviet intervention in the war.
At home, Nixon inherited at the start of his presidency an overheated boom economy that had resulted in severe inflation. Nixon instituted restrictive budget and monetary policies. By early1970 the rate of inflation had slowed, but the economy over-cooled and the nation slipped into recession. Nixon relaxed monetary policies and plotted a large budget deficit to revive the economy, but again inflation spiraled. Finally in August ’71 Nixon overcame his abhorrence of direct government intervention in the economy and instituted wage and price controls, beginning with a 90-days freeze. At the same time, to improve the international position of the U.S. economy, he took steps to force a realignment of exchange rates and devalue the dollar. Inflation slowed somewhat but spiraled again in 1973, mainly because of rise on food prices caused by massive grain sales to the Soviet Union the previous summer and a second devaluation of the dollar in February 1973.
In his handling of foreign affairs and economy, Nixon had begun an unprecedented centralization of executive power. Although Congress went along with him, many of its members began to chafe at their own seeming relinquishment of power. The initial friction was as much due to the Nixon style as to substance. Nixon dealt with Congress at arm’s length trough a protective screen of White House aides. With complaint from Congress that he had become the most isolated president in history, Nixon began bypassing Congress to achieve his ends. When Congress appropriated more for a program than he wanted, Nixon resorted to presidential veto.