European Stars And Stripes (Newspaper) - January 9, 1988, Darmstadt, Hesse                                Page 10 the stars and stripes saturday january 9,1988 Peter finesse key for intervention by Central Banks when the world s Central Banks intervene to move the currency markets they rely on a mis of Wiz Ardry selective secrecy precise Liming special knowl Edge and even mild deception. Trading in dollars in the foreign Exdine Market amounts to a torrent of around $100 billion a Day according to 1984 surveys by the federa Reserve the us. Central Bank Bank of Japan and Bank of eng land. With such huge volume when Market sentiment is running strongly against the Dollar in is nearly impossible for Central Banks to turn Back the tide by the brute Force of their Money reserves however great these maybe. Central Banks do not have enough ammunition to fully counter the negative psychology of private investors toward the Dollar Sayi David Jones senior economist m Aubrey of Lanston and co., a new York based government securities dealer. Finesse is he answer. The Central Banks Are most successful when they wait until the Dollar s decline stems to ran out of Energy then step in with carefully limed Dollar purchases. For example foreign Central Banks were helpless to arrest the Dollar s slide Al the end of december when ii tumbled to record lows Afa Insl the japanese yen West German Mark and other currencies. Rut the Central Bankers have been so achingly successful in rallying the Dollar this week largely be cause they arc going with the tide not against it the fed is Able 10 prop up the Dollar in part be cause traders knew it was oversold said Michael k. Evans president of a Washington based forecasting service. It was Loo Low Lasi week Evans said tuesday but in the longer inn in will Stilt go Down  secrecy gives the Central Banks a critical advantage Over the speculators. When there is an uptick in the Dollar Only Central Banks know exactly How much of in is the result of their buying. While some Central Banks make i hair intervention Public most including the Federal Reserve and Bank of Japan Only announce what they did months after the fact. The . Central Bank for example issues a quarterly report which reveals what it was doing in currency markets about four months previously. In inc dec. 3 report last year new York Federal Reserve vice president Sam y. Cross disclosed that the fed had intervened in both directions at various limes during the August october i7 period. On aug. I he noted reports of a violent riot in Mecca revived in Terest in the Dollar As a tale Haven during times of International turmoil. The Federal Reserve then sold 1631 million to push its value Down. Earty in september 1987 the fed bought jj89 million Worth of yen id prop the Dollar up Tom Wicker during a subsequent sinking spell Cross revealed that the Bank of Japan and the West German Bundesbank and other Central Banks collaborated in the september intervention. Bui he did not make Clear whether their objectives had been attained. Central Banks usually try to preserve an impression of invincibility by keeping secret their Large ranges for inc Dollar. If the la rect ranges were Public say a Low Oft 20 yen to the Dollar speculators would test the Central Banks resolve by trying to push the Dollar below thai level. If the speculators succeeded in breaking through the Tower limit and the Central Banks had to retrench to a lower Dollar level their credibility would be seriously damaged. As it is now the Central Banks can pretend they Are still in control even if the Dollar Falls sharply below their secret target ranges. When the Federal Reserve wants to buy dollars in checks around for Price quotes then makes a Deal Over the phone. It makes the Purchase by spending foreign currencies from its reserves typically yen or Marks. If the fed a Nils id soft pedal its intervention say to give the impression that an uptick in the Dollar is caused by natural forces it will swear its partner in the Deal to secrecy. Lately though traders say the fed has been Trum Peting its intervention hoping to create the impression thai it and other Central Banks Are buying dollars on a massive and irresistible scale. Although Central Banks Purchase rarely amount to More than a few billion Dollar a Day they can have an oui sized Impact because of he Central Banks willingness to stand firm White the Market vacillate. Up to so percent of the roughly $100 billion in daily Dollar trading is churning by big institutions dial dislike ask and quickly follow any trend that a More determined player such As a Central Bank establishes said Lais Pedersen chief International economist for Mcmull Lynch and co. At the Bottom intervention by Central Banks to sup port the Dollar i simply a form of official lending to the United states by foreign governments Pedfrsen Solcs. The United slates ran a s150 billion deficit last year on its current account the broadest measure of foreign Trade. Of that total foreign governments financed two thirds through their purchases of about s100 billion in the foreign Exchange markets in 1987, Pedersen Esti mates. So far in seems 198 is shaping up the same Way. Editn Hoik Prtrt Corli to Utomi Mytr in m Aux Iid hut War Powers Resolution just an empty weapon during Ronald Reagan s presidency us. Military forces have been engaged without a declaration of War but sometimes with heavy loss of life in Lebanon Grenada. Libya and the persian Gulf. Congress has not used inc so called War Powers Resolution to prevent or terminate any of these exercises in presidential muscle Al citing or in the 1970s. President fold s use of the military in retaking the Mayaguez. Or president Carter s in the iranian hostage Rescue Efi tort. The Basic reason the Resolution has proved to be an empty weapon against a president s Power 10 commit and keep. . Troops just about anywhere he warns i termed in in a recent column is not hard to find Congress does t Nave the will or courage to Challenge a president so directly in Hii Moji powerful role As commander in chief of the armed forces. The War Powers Resolution was passed by Only four votes Over president Niton s veto in the darkest Days of watergate and at a time when executive congressional relations had been poisoned by the War in Vietnam ii requires a president to report to Congress within 48 hours when . Forces Are sent into hostilities or situations where imminent involvement in hostilities is Dearty indicated  standards obviously met by naval forces now operating in the persian Gulf. After Days if he president certifies unavoidable necessity he Burden is placed on Congress to approve the deployment or the troop must be with drawn. Congress has never caused troops to be with draws and probably never will for several Strong reasons to do so would be a direct Challenge to the presi Dent s Powers As commander in chief. Congress often chafes at the exercise of those Powers but is reluctant to interfere lest in limit or inhibit some later president s ability to act quickly and strongly in a real emergency. Such congressional interference also would be a Cial primarily empowered to conduct foreign policy. To would appear to be urging my to Back Down or Bug out from a Flohl the consequences of which few politicians would want to risk. Then Are other reason inc War Powers Resolution has proved toothless. Harold h. Kobo the Yale Law school ipe Aung at Hofstra University s recent conference on the Nixon administration pointed out that the act was drifted primarily to prevent or Slop Helm War a deepen ing continuing Wir like the one in Vietnam by la very design be noted the resection can Nave no effect on Quick strikes like Reagan against Libya and Grenada or Carter s desert  nor can it apply to a Covert War not officially admitted or to i secondhand War like that organized and financed by the Reagan administration with coat Tessiana complicity in Nicaragua in fact the Resolution Couri amount 10 a Blank Check for a president to conduct a War for 60 to 90 Days without congressional consent in the nuclear Era that could Lead to catastrophe. In cases in which the Resolution does Kern relevant As now in the Gulf in would be politically difficult Ai outlined above for Congress to act for withdrawal even if in wanted to if it does so act the concurrent Resolution specified in the Law would hive it Legal Force. Even a Resolute Congress thus could instruct or influence but not actually direct a president to i lid raw. If the president resisted. Congress could take the Issue id the courts by precedents suggest that judges probably would refuse to Bear a congressional Chal Lenge to the executive Branch on what Ibey would con Sider a political  a presidents since the War Powers Resolution was passed in 1973 have regarded Ilas unconstitutional and All Are Well acquainted with these political Reali ties. Reagan never even i made the required official report to Congress about naval operations in the per Sian Gulf though inc Pentagon has awarded Hazar Dous duly pay to personnel deployed there thus the War Powers Resolution is a Law of the land thai in t being obeyed by Ute president and can t be enforced by Congress. That makes it bad Law for which repeal May be the Best alternative since Noih Uii in the record suggests jul Congress is Lindy to