European Stars And Stripes (Newspaper) - February 9, 1978, Darmstadt, Hesse                                Doily Magazine Dollar game by Henry Scott Stokes new York Winston Churchill once remarked hat democracy is the worst form of govern except All those that have been tried from time to one might say the same of floating currency they May be troublesome Tai they work better than what went monumental Exchange with govern pouring out billions to defend fixed rates before to overwhelming Market h bit been five years since the sudden devaluation of k Dollar in february 1973 and the arrival of the floating change rate the International monetary mum is functioning in its usually imperfect random with currency rates Bobbing about in largely in wifi table manner and with Bankers and governments r fido reset by the the sagging Dollar by j sharply undervalued while the japanese West Gen pan Mark and British Pound Are nay be a certain amount of anarchy in the for Eta Exchange which have now taken Over As of Exchange rates from Central Bank and gov and this attracts some Robert of Brown Harriman and has sacked the trapshooting mentality of the h there is in theological or practical alternative to flatting and certainly a return to the old fixed rate in which Gold played a is at him agreed standards of intervention and managed lilting May be not was Huttt most thu Oalif float the Dollar was Ike  m raid a Zurich banker of us Pligge he yen and swim of a Trade weighted basis that taking account the amount of Trade the United states does i the Dollar fell Only Psi percent last r because the nation largest Trad had an even weaker i Dollar is unlikely to be As weak against the Strong nmn Ria in Wlas it was in when it fell by More Mafi percent against the yen and the Swiss franc and am than 11 percent against the in part because in an important policy decided to buy dollars in the Market instead of ignoring oter the next few months the United states policy of of the Dollar will surely succeed they can nip it said Otto president of data Karo i but the experts Are generally Uncertain f me Long Range the move to floating Exchange govern decided to let rates determined largely by demand in the foreign Exchange markets with intervention to maintain Tamuty or a target Yuwen Anent authorities lost a measure of control but the International crises that occurred when a rates were pegged to Gold and the Dollar the investment and Reserve currency in the then when currencies came wider  or a formal revaluation or devalue Jie lord Exchange markets la the new float however have sometime been heat Nilal rate shifts have as4 Whei Itomi Nanti try to slow then Down Miordan Hamki of last year when they taught Worth o dollars became Lihty was too Tow and their they smally eurocurrency which consists of currents mostly held and traded in London or on the the Dollar was the Jown Hijii Champion of a Zurich banker go Jar plunge against the yen and Swiss continent by multinational companies and Banks outside any governments control is estimated at i3so big Central Banks have sums at their disposal that Are minus Cule by companies and motivated by a fear of losing Money or by a search for switch their currency holdings about in unpredictable the markets Are in an irrational said Paul president of the new York Federal Reserve for when the Dollar was at a Low Point last the problems of the Dollar Are based on rational said Alan economic consultant and former chairman of the Council of economic advis ers under president Gerald few analysts or Bankers expect the Dollar to be wry Strong after Early Lelund executive vice president of the Bank of the Nallus largest uld after Ike announcement by the admust Alloa m 4 that the move is Welcome but it Doest address the he referring the hatted Stales Trade deficit projected at billion for and the Federal budget projected at billion again in fiscal among other actors Eckstein said that after three to six months the fundamentals will reassert themselves unless other major Japan and an eventuality he does not Greenspan responded that the Only Way to create in the minds of people abroad who hold dollars the perception that the Dollar is stable is that the Federal budget deficit should be seen to be falling and monetary policy should be seen id be allowing for Small stable increases neither of these conditions ii Likely to be and the selection of William Miller As chairman of the fed eral Reserve system to succeed Arthur Burns Miller is closer to the administration than bums will not Lead to tighter monetary most experts of Xii As for Likely currency rate changes in David an economist at data made the Fol lowing predictions German Mark relatively unchanged this year at to to the compared with after the announcement of the fed it Rose percent against the Dollar in Swiss franc up percent against the Dollar last it should remain at a Premium Over the German tending toward Swiss francs to the Dollar in against slightly More than two francs to the Dollar at the Mark and Swiss franc should bold their spectacular 1977 gains because of the Low inflation rates in Germany and Switzerland and because the West German government is unwilling to Spur the Economy hard above a current growth rate of 2 to 3 percent a Mcclain faster economic growth in West Germany would put in reduce its Large Strong Trade surplus and weaken the French franc it could fall this year to about 5 francs to the having moved up unexpectedly in 1977 by percent against the Dollar Tolyl Ancs per Dollar if left Wing parties do Well in the March general elections the francs fall could be has italian lira it could also weak fun in having been stable against the Dollar in from 870 to the Dollar at the lira could Pierce the 100 Given political and uneconomic British Pound Strong in 1977 in rising by percent against the Dollar As Oil and Gas revenues from the North sea strengthened the British balance of the Pound is Likely to drop from just Over at present Given the risk of inflation and Britain Lack of Export japanese Ven potentially its the strongest cur Rency in 1971 data resources predicts an Exchange rate of z20 yen to the Dollar by some japanese experts Uaiwa a leading forecasts 250 yen to the Dollar at year compared with to at the big question on the which gained percent against the Dollar last b whether the japanese government will sharply relate the pushing the growth rate past the expected t Canadian Dollar Downside risk still exists despite an unexpected percent decline against the Dollar in 1st to just above 90 largely be cause of anxiety Over Quebec the Cana Dian Dollar cannot get much stronger in Gold analysts expect Gold to gain in value after rising last year by 3s an ounce to the consensus is that Ziztis not february 1978 the stars and stripes Page 13