European Stars And Stripes (Newspaper) - May 15, 1988, Darmstadt, Hesse                                Page 18 the stars and stripes business news Dollar inactive pending Trade deficit figures \ predicted jump in the Greenback failed to materialize in tie past week As currency traders fearful of a Rise in the . Inflation Rale decided to steer Clear of the Dollar unlit the monthly release of figures on the american Trade deficit. Mostly ignored the Buck traded in extremely narrow ranges All week. Traders in both London and Frankfurt had been predicting a break out for the Dollar to Levels As High As 1.73 West German Marks Fol lowing a positive report on employment in the United states released May 6. However a Sec Ond opinion that the improved employment figures also heralded higher risk of inflation proved to be the Mure popular keeping traders from taking Dollar positions. The Dollar in fact dipped slightly before re covering on the strength of statements by for Der tical Reserve system governor Wayn Angell that the fed would no seek to lower . Interest rates. The to 9 percent on wednesday. If anything distinguishes american monetary policy in an election year it s the obvious Lack of action a weal German trader Laid. Unlit vice president George Bush moves into the while House no body at the fed can be expected to do any  inflation and interest Rales aside most trader agree that the Trade figures de out tuesday Are the Best indication of Bow the . Economy is faring. Most said they expect the deficit to dip below he $13.8 billion level set in february meaning the Dollar should move upward. Exact predictions on the deficit ranged from s 1 2 Bil lion lot 13.2 billion with the Dollar dead in its tracks the Pound continued to attract the most interest from Trad ers. Sterling climbed Back above the s 1 .89 Mark late in the week although buyers Only slightly outnumbered Sellers. However the hottest currency news in the past week remained the release of a Book by japanese journalist Yoichi Funabashi detailing the group of five s monetary cooperation informing Down the Dollar. The Book managing the Dollar from the Plaza to the  details the meetings of finance ministers of the United slates France West Germany the United kingdom and Japan Between 1985 and 1987 that led to the More than 50 percent decline in the Dollar s value. The group has since been expanded to include Italy and Canada. One of the Book s biggest revelations was news that a i set he Agenda Tor the Plaza agreement a week before the sept 22, 1985 meeting took place at the Plaza hotel in new York. The Book also details the coordination plan secretly agreed to As part of the Plaza agreement itself. Having agreed that the Dollar had climbed too High Ami would have to be lowered the coun tries tended to use concerted Central Bank intervention to push the Dollar Down 1 0 to 1 2 percent in the six weeks following the Accord. The United states and Japan each agreed to pay for to percent of the intervention while West Germany agreed to 25 percent France to 1 0 percent and the . To 5percent, according to the Book. The Book also reveals that the nations Man need to reach their goal of driving Down the Dollar with Only half of the 1 1 s billion they committed to in the Plaza agreement. It leaves us looking Tike we Lack a bit of re solve one German trader said dryly. Although there was no official comment on the Book from any of the countries involved in the intervention the Book gained credence during the Post week when Richard Daman a former Deputy . Treasury Secretary who is much quoted in the Book described As a first Rale piece of  a top business brass foresee even better Days for 88 hot Springs a. A the nation s lop Busi Ness leaders Are offering an upbeat assessment of the Economy predicting balanced moderate growth for the my of this year. In Many respects the economic forecast by the Busi Ness Council composed of 61 executives from the nation s largest corporations was even Rosier than the one offered Al the group s last meeting just before the october Stock Market crash. Our consultants Are feeling rather Good about the Economy. They feel better than they did six months ago said John s. Reed chairman of Citicorp. The Council s economic report reflects a consensus of View held by the chief economists of member corporations. They predicted that the Economy As measured by the Gross National product would grow Al an annual ale of 2.4 percent this year and 2.1 percent in 1989. When the executives last gathered for their Semian Nual meeting at this Mountain resort they were expect ing a somewhat better Gnu growth of 3 percent this year. However the latest forecast shows More Moder ate inflation and lower unemployment. Consumer prices arc seen rising 3.9 percent in 1988 and 4.6 percent the next year compared with 4.2 per cent in 1987, the executives said unemployment which was 5.4 percent in april would remain under 6 percent through 1989. Reed said the mix of economic growth expected this year is healthier than the 3.8 percent growth m 1937, the Economy in 1988 will rely less on consumer buying and a buildup in inventories and More on improved exports and higher spending by businesses on new equipment he said. Although Reed stopped Short of saying the Slock crash was Good for the Economy he said there were certainly Good aspects to  it relieved a buildup of tension in financial markets and gave the world s Central Bankers room to lower interest Rales he said. The Economy and our businesses Are doing quite Welt in Spile of that problem ism chairman John f. Akers said referring to he crush. No one i talking about that anymore. But some executives said there was a feeling that the economic Outlook was almost too Good to be True. Edmund t. Pratt jr., chairman of Pfizer inc., said the Federal budget deficit and the Trade deficit remain serious concerns. The executives said the Trade deficit should drop below 1150 billion this year Down from a record $171.2 billion last year. The budget deficit was expected to remain disturbingly High at si54 billion in l9ss, up from j 150.2 billion in 1987. Many of us continue to feet we must be living on borrowed Lime to be having such Good business conditions when the underlying fundamentals Are so questionable Pratt said. Robert d. Kilpatrick chairman of Ciona corp. Said the budget deficit will be the most significant economic problem faced by the next president. Clearly nothing will be done about it in an election year he said. . I Fary paying More for less in goods services specialist says by Deedee arr1ncton Doke Salt writer  americans Are paying More for fewer goods and services in most segments of the . Economy including the army a Vii corps manage ment analyst said. Jim Jeter one of several speakers who addressed military productivity Al a recent conference in Stutt Gart said the United slates has experienced � Sharp drop in productivity since the end of world War ii. The decline i due in part to such varying factors As the organization of labor Energy conservation and the institution of an All Volunteer army. Declining productivity Means an increase in dollars spent for Ine same amount of goods or services received. While Jeter did not Cilc any statistics or percentages he said . Productivity has declined dramatically in the past four decades. In the army where draftees had been paid $78per month the creation of an nil Volunteer Force meant higher salaries to entice new recruits Jeter said. The government then pays More to get roughly Hesam Clevil of work. He emphasized however that he did not advocate lower pay or fewer benefits for military personnel not ing that some still Are living in facilities known. As Hitler s revenge " additionally Jeter Laid military productivity in peacetime is affected by Mission requirements that continue to grow the Dollar Are going Down and the threat s not going  the military whose productivity is tied to that of the United states Overall is charged with learning very creative and innovative ways to use the dollars we re investing into missions he said. Al the end of world War 11, Jeter said economically devastated countries such u Germany and Japan were Breed to rebuild their economies and Industrial facilities. The disadvantage ultimately turned into a advantage for the nations by creating a need for new technology. The United states on the other hand has seen the decline of i to Industrial base As it tacks sufficient new facilities and technology to keep up with competitors. Since the War ended Jeter noted the . Economy has leaned toward a More service oriented base. In the meantime . Workers wages and benefits have increased at a Rale thai outpaces the amount of work produced even though the country s Standard of living cannot be maintained by paying people $4.10 an hour Jeter said. A Benefit such As Early retirement is very Good for the person. He s earned it. He deserves it. But it s negative Impact on productivity. Now we be lost that Guy for 10 to is years of additional work life we used o have him for he said. Other causes of declining . Productivity cited by Jeter included Energy conservation which has Cut Back on hours of operation. Environmental issues. We re cleaning up our air and water but in Many cases there s been More legis lation and More controls which Cost us More on the output Side Jeter said. Foreign conflicts including the korean and Viet Nam wars rang up heavy expenses while producing no product. Decline of the . Industrial base. Organization of labor where unions and collective bargaining steadily have driven up salaries and benefits paid Tor roughly the same amount of , Jeter said he did not oppose unions 01 higher salaries or benefits. Increasing the level of work for Money spent jete said will depend on tighter controls on fraud and waste offering incentives for improvements and met ing out punishment for poor productivity and commitment from managers and employees alike. We have to Stop considering productivity As a program with a beginning and an end. Productivity improvement has to be institutionalized Jeter said. The conference was sponsored by Vii corps and the greater Stuttgart chapter of the association of Mili L�ry comptrollers. Pennsylvania firm tops holding company Survey new York up Cor states financial corp.,a Philadelphia Bank holding company topped the an Nual Survey of Bank holding company performance conducted by Salomon Brothers inc., the Wall Street firm said Friday the Survey ranks Bank holding companies on profitability credit Quality capital productivity an tidily. Id Liq