European Stars And Stripes (Newspaper) - November 24, 1985, Darmstadt, Hesse Sunday november 24, 1985 the stars and stripes Page 19 business news changes currency rates can be costly Washington a american couple who planned a dream trip to Japan a few months Back with carefully budgeted savings May gel unpleasant Surprise when the credit card Bill arrives. Instead of the $3,000 they expected o spend they might find a Bill for something like $3,600. And it would t be due to a sushi splurge just a change the Yon Dollar Exchange rate. american who hoped to make a $50,000 profit by manufacturing is million Worth of widgets May face a loss instead because he can t make widgets without gadgets from West Germany. And what we projected As $400,000 Worth of gadgets will now Cost the businessman about $440,000 because the Mark has risen against the Dollar. If the american manufacturer can save profits by getting a higher Price for his widgets the american widget user will pay the Price of shifting Exchange rates. These Are made up cases but they demonstrate the kinds of effects those currency rate changes can have Over less than two months. The rates work two directions at the same time. Japanese tourists and West Ger Man manufacturers Are finding bargains this country because the Price of the Dollar has fallen terms of their respective currencies. But big companies International Trade get Little fun out of bargain Hunting. A Cou investor s guide by William Doyle have approximately $9,000 checking account about 7 percent inter est. At he same Bank i have nearly $40,000 three certificates of Deposit. Two of the cd paying 14.5 percent mature february 1986. The other pay ing 10.75 percent matures january 1987. Newspapers report that the Bank has problems with bad Loans has been losing Money and has been called the carpet by the Federal Deposit insurance corp., a Nice insures us deposits. I have been tempted to close the Check ing account and redeem the cd then put the Money different Bank. If i Cash he cd Bow much would 1 lose because of the penalty and should i be worrying a. You have absolutely no reason to worry. Odic insures each depositor up to $100,000. Your Money is Rock solid Safe. It would be a serious mistake to Cash your cd Early and get socked with costly penalties. Also because interest rates have come Way Down you would gel lower Terest new cd. I can t Tell you what the Early withdrawal Penally would be for redeeming those cd before their maturity. Each Bank and savings and loan association sets its own maximum penalty. Federal regulations do set minimum penalties that must be levied Early redemption of federally insured cd. For cd issued since oct. 1, 1983, those minimum penalties Are the loss of one month s simple incr Cost cd Wilhma purity of a year or less and the loss of three months simple interest cd Wilh maturities of More than one year. For cd issued Between july i 1980, and sept. 30, 1983, with maturities of More than one year Many of which Are still around the federally mandated mini mum Early withdrawal Penally is the loss of six months interest. And for cd issued before july 1, 1980, which have not yet matured that minimum penalty is the loss of three months interest Wilh interest rate Lor the cd s term reduced to the savings account rate. It must be stressed that these Are mini mum penalties. Banks and a is Are free to Lay higher penalties. Many do. It s Pic of wrong guesses inc currency markets can Cost millions and maybe the Job of the currency manager. Pressure is building for a More stable system. Sir Robert Muldoon former prime min ister of new zealand says Exchange rates remind him of a Tennis Ball at a Wimbledon final. People have begun to talk about the Yoyo the Price of currencies is set by Sellers and buyers world markets like the Price of Copper or Coffee. Governments often Lake a Hind buying or Selling to influence prices. The Reagan administration dislikes the idea of such government interference but sept. 22 it agreed with the governments of Japan West Germany Britain and France thai they had to do More concerted trading to drive the Dollar Down. The Accord seems to have worked Al though some think the Dollar was its Way Down anyway. At a conference of experts last week Deputy Treasury Secretary Richard a. Darman indicated that the administration is ready to go further. He spoke of moving toward the european idea of target zones that is official estimates of what Price Anges ought to be. For example it could be agreed that a Dollar should be Worth Between seven and eight French francs and Between 180 and 210 yen. When a currency s Price drifted Wise to Check out the penalty before put Ting Money a cd. am widow 63, living social Security of $650 month and interest from my savings. I have $10,000 a Money Market Deposit account and two $25,000 certificates of Deposit one for six months end Ibe other for one year. I renew each cd As it comes due and trans Fer the interest to my checking account to pay some of the expenses. Is there a Way i could invest some of this Money to get a monthly amount to add to my income a. There Are Many places you could Vest and gel monthly income. But to slay with the safely you obviously need i d advise against putting your Money any place other than federally insured de posits such As you now have. You can gel monthly Ernst payments from cd. Talk to your banker about hav ing thai interest transferred to your Money Market Deposit account or your checking account monthly. You might not be Able to arrange thai until your present cd mature. Let s Hope your checking account pays interest. If it does to switch to one thai docs. Also appears that you re keeping too much your Money Market Deposit account. You should keep enough there for emergencies and put most of that $10,000 another cd where you la get higher interest. have about $30,000 silting a Bank Money Market Deposit account pay ing Only 6.5 percent interest. 1 can join a credit Union that pays 11 percent interest account renewable every three months. Would Money be As Safe there As at a Bank a. It will be providing the cd is a member of the National credit Union share insurance fund. That Federal Agency insures each cd member up to $100,000. Term deposits for specific periods of time at Cus Are called share certify they Are similar to certificates of deposits at Banks and savings and ?.n associations. Kuna feature column ill Doh Wal court written null of. But he can Proy de newer y rough column. You can virile to him or of the Slart and sir Loti. Apo Mil . Force outside the zone the government would snarl buying and Selling to bring Back. That could get costly. If that happened the governments might agree new zones new estimates of what Price is right. Critics of this approach say it could Lead to undue interference countries Domestic policies by International Money markets. For example when traders see . Terest rates go up they sell other currencies and buy lots of dollars so they can invest this country and Tarn More Money thus driving up the Dollar s Price. When they see inflation going up Italy they May want to Pul their Money elsewhere thus driving Down the Price of the lira. However. Inc . Government May want interest rates High because it s trying to hold Down inflation and refuse to change ils policy when other countries complain that their capital is being drained away. The italian government May think it needs some inflation to stimulate jobs and Busi Ness and might not want foreigners inter Fering. So far the main mechanism for control Ling currency rates has been the economic Summit. Darman said the function of such sum mits seems to be principally to reproduce the previous year s communique with the dates .japanese relations get boost from Hitachi new York not with a $20 million endowment and prominent Ameri cans As trustees Hitachi Ltd. Of Tokyo is establishing a foundation the United states to promote amicable .-japanese relations and cultural understanding. The Hitachi foundation based Washington is the latest of a number of philanthropies set up America by japanese business leaders the last few years. Many Are focusing Grants for american Educa Tion or cultural activities. At a time when Trade Competition has caused strains Between the United states and Japan the japanese benefactors seem motivated at least partly by a wish to demonstrate Good will according to a number of foundation leaders. But the motivations Are broader than generating Good will said Richard w. Pc True president of the United states Japan foundation another philanthropy that was set up As a gift from the japanese ship building Industry. Many people of the japanese establish ment believe two things Japan must More actively carry out its responsibilities As important world Power and they Are conscious of american efforts Over generations to assist and encourage others the Field of education he said. Also Many japanese feel american people need education International Hitachi one of the giants the japanese electronics Field has made substantial roads into the american Market. The new foundation intends to use its Grants which will amount to about $1 Mil lion the first year for a Broad philanthropic program that includes spreading its benefits around 22 american communities where Hitachi has manufacturing plants or major sales facilities. Hitachi enterprises employ almost 4,000 people the United Stales and the number is growing. The largest division Hitachi America Ltd., has its Headquarters tarrytown.y. Stock pulse Ltd fms Mon Monal Friday be Sembor Annyse come Tom Moil Actton by Slock Day to qom earm be old Banor to . S,1 u i 0.22 64.0 27 Texaco 2.247.100 34 4 1.47 230 m Wal the 2.201,100 44h 3.31 140 2.6 str Cdr 2.026,300 39 2.4 160 30 nine 1.92s.600 47h us 15.0 2.7 a Marc 46 2.2s 200 3.9 Elk old 1,607400 3. If 150 45 Atit 1,417,900 73% 17.0 s.2 Schlumb 1.439,100 35v, 3.50 100 3.4 Mac uii.400 60 4 3.71 16.0 19 nose cent him Lantt pm can Slock cd m cd g. Earn be old Camps Soh 4h s 3.06 170 Nii Gypin 44 4v. 5.24 1.0 Pennzoil 2 3h 3.63 17.0 3.5 Mareo ii 3vi 2.10 9.0 Sli Flor 39 Jav. 242 160 3.0 son lbs 3 i 3.20 120 3.1 sioiioi1 s5 3v, 90 is so trog u 2363 16.0 2.9 syn Len 76 2h 46s 160 32 rom 39h 2h 204 19.0 2.1 the new foundation s Board is headed by Elliot l. Richardson the former attorney general who has held four Cabinet level posts and was ambassador to Brilain. Other trustees Are being chosen from the business and academic Fields inc United states. It s always interesting to have a role gelling new projects under Way said Rich Ardson. He said educational and cultural activities would be of High interest to the foundation. A number of innovative ideas arc being proposed to the trustees. One plan Calls for a language program that would use satellite links to enable students Japan and the United Stales to communicate and share cultural insights. For example inc japanese might recreate a Tea ceremony allowing the americans to interrupt Wilh questions. The americans might then Pul a thanksgiving play and then answer questions from the japanese. Another idea being discussed is to con so Ruck aul Hentic traditional japanese farmhouse or Minka the United states. The project would have educational and architectural value and the facility might also Croc As a meeting place. The trustees will also consider ways of supporting education programs the Southeastern United states a Region with High illiteracy Rales. Hitachi has a number of manufacturing plants or sales offices Georgia and is reported to be considering further operations the Region. The foundation is considering other re search projects and conferences concerns that the United Stales and Japan share about International Trade. One suggestion Calls for japanese and american scholars to undertake a joint study of the Impact of new technology both countries. 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