European Stars And Stripes (Newspaper) - September 11, 1988, Darmstadt, Hesse                                Page 18 the stars and stripes business news Dollar unable to make its Way out of doldrums i  continued to slip a air instr Cunt in or. Ins a a with Little help Tor inc u Cage cred i � from slightly higher than Cap Ted . In la ii. Hij j i is released Friday. I ii in Outlook for the Greenback it s Lin Ding steady until so tie rarity shattering i a t nines out a Frankfurt Udac Raj � to . Producer Price Index or August a Mua Iurco of the Cost of goods Al various let Els of product i in. Onui cd anything but world Sha ing news. Woj Fralc prices were up 0.6 Perot i in August from id previous month on the strength if  units. That rate of increase projected Over 12 merits yields an estimated inflation at of 6.9 per u fur 1988 compared with 2.2 Permint in i9b7, an increase in inflation Vrh Lxi Vum signal a a Kunj up of the . Economy woudi1 a or an increase in interest Rale and correspond Paul Cozby ing i a crease in the Dollar s value the trader said. Hill the Market already had anticipated n 0.5 per cent increase in producer prices and Friday s figure should have Little effect the trader said. The military Exchange rate through monday was 1.82 West German Marks Down one pfennig from Friday s fix and Down three pfennings from a week at traders now Are looking to a Cdr Day s release of . Trade deficit figures to give sonic direction to the it duct less Market. The problem for he Dollar which has lost almost 10 pfennig again so the Mark since Early August continues 10 be that no Clear picture on the strength of the . Economy has emerged through the summer. While speculators had been watching Trade Fig Resas an indication of . Exporting strength the locus shifted to interest raid in the past two weeks. The Federal Reserve raised . Interest Rales in Early August sending the Buck soaring until several euro Pean countries followed suit including France Brit Ain West Germany and Switzerland. Then . Unemployment figures released two weeks ago were worse than the Market had hoped sending Hie Dollar Down farther. A Good showing in the number of . Jobs created could have signalled another round of til for Tal interest rate increases allowing speculators to Cash in on the Dollar in the Short  Dollar has become so hemmed in by the marketplace malaise that its trading Range late last week was Between l.84and 1,85  London one published report said the Market in England continued to reflect confusion concern ing the direction of the . Economy and the Dollar. The Dollar rallied tale in the week against the Pound but no Sipi Vicant movement is expected. As in Ger Many the Altitude in London according to on american banker is we wait and see until the .  Federal Reserve report released wednesday revealed the strength of . Intervention in the cur Rency markets tins summer. The Dollar rallied sharply in june july and August soaring to 1.92  fed sold $2.93 billion Al the end of june and in july. And according to the report the Federal Reserve and the . Treasury sold dollars for Markson 16 of the 24 trading Days from june 27 id the end of july. The report did not contain information on Central Bank intervention from other countries but it i widely known thai West Germany s Bundesbank has intervened steady at times heavily to keep the Mark from sliding against the Buck. In the last three weeks the Mark has been strengthened on news that Germany posted a record Trade surplus in july and that the country s Economy is growing at an annual Gratcof 3.9 percent. Bad Check writers costing cafes bigger net losses Charlie Bowden Munich Bureau Munich West Germany the number of checks written Al Aimy and air Force exchanges in Europe continued to climb last year and while the number that bounced dropped for the first time Oss caused by rubber checks were up. Customers wrote More than 20 million checks Worth just More than is billion at european exchanges in fiscal year 1987 which ended Jan. 25, 1988. That Wasan increase in checks and value of about 14 percent compared to fiscal 1986. The number of bad checks dropped about i percent to 159.000 last year a major turnaround from pre Vious years. In 1986, the number of bad checks jumped nearly 1 g percent from the previous year. While the number of checks returned apparently is leveling off after four years of dramatic increases the value of a. Returned checks is on the Rise said cafes Europe comptroller Loyd Lee. For example the number of returned checks for the first Quarter of 1987 and 1988 were virtually the same but the value of the checks increased 13 percent. Peo ple Are writing bigger checks not necessarily More checks Lee said. The average value of the returned Check in 1987 was $51, and has increased to 157 this year. He attributes that increase to the fact that cafes raised the Check cashing limit from 11 of to j150 in october 19s6. The average number of returned checks was about ,600a month in 1985. It jumped to 13,400 in 1936 and dropped slightly last year. So far in 1988, Lee said the monthly average for returned checks is running about 12,400. The number peaked at 16,000 in August 1987. Since 1984, the number of checks written at euro Pean exchanges has increased 34 percent from about 15 million to just Over 20 million annually. The num Ber of returned checks during that period increased a similar amount peaking in i986al 161,000. Bui the collection rate on bad checks has continued to climb jumping from 89 percent in 1986 to 94 per cent last year. Of the 159,000 returned checks change and military officials collected on 149,000 Worth about $7.8 million. Those written off in Europe totalled about 5932,000, but they arc turned Over to the cafes worldwide Headquarters in Dallas for further collection efforts. The drop in the numbers of dishonoured checks in Europe contrasts to a worldwide cafes increase of 3percent, according to Exchange financial reports. Last year More than 87 million checks Worth $4.6 billion were written at army and air Force exchanges world wide an increase of 12 percent. That jump continued a Strong five year upward trend during which the actual number of bad checks also increased significantly about 25 percent. However As in Europe bad Checkas a percentage of total checks written Al exchanges has remained fairly constant Well below i percent. On the negative Side the Money written off As a result of bad checks is up As is the resulting net loss. Cafes in the past five years has written off si4.1million because of bad checks later collected s6 Mil lion of that but still had a net loss of $8.1  10 percent of bad checks eventually Are written that s a business expense acc said. It s a Dollar for Dollar  and the loss is taken olt the lop before the cafes annual dividend to army and air Force mor ale welfare and recreation programs is declared. For every Dollar we have to Wile olt it costs mar 50 cents in lost earnings he said. In 1987 alone Ihal equated to $ 1.3 million that could Bave gone to morale programs worldwide. In More Down to Tarth numbers the loss in 1987 per si00 cashed was 6 cents double the figure for 1984. Some experts suggest investors fake closer look of Premium Bonds by Chet Currier a business writer new York today s special at your nearby in vestment firm a $i,12i item guaranteed to shrink in value to $ 1,000 by the time you Cash it in. You la pass you say you have enough trouble with unintended losses in managing your Money without taking any intentional ones Bui a Good Many financial advisers suggest that the proposition in question known As a Premium Bond might Merit a closer look for yield conscious investors. Premium Bonds arc interest bearing securities that carry a Price above their face or redemption value generally because interest Rales have fallen since the Bonds were first sold to the Public As rates came Down the Bond s Price was pushed upward by traders and dealers in the marketplace to keep its yield at least roughly competitive with those of new securities being offered Al today s Market rates. In theory however this balancing process might not always be totally efficient. Premium Bonds May Al limes be available offering interest income that could More than cover their decline Over time in principal value. Many investors question the Benefit of buying Bonds Al a Premium believing Ihal if they hold a Premium Bond until maturity they will be taking a loss says the brokerage firm of . Edwards & sons inc. In a report on the subject. Actually this is not the Case at All when you con Sider the band s total return. The reason to invest in Premium Bonds is to achieve higher than Market in come and current yield with the Hope thai these will More than offset the Premium  in addition Edwards Points out Premium Bonds can provide some lax advantages even though the rules were tightened by the tax Reform act of 1986. Owners of Premium Bonds issued by corporations or the Federal government can if they choose take a tax deduction each year for the gradual decrease in the principal value of the Bonds. For securities bought before oct. 23, 1986, this amortization is applied As a simple reduction of invest ment income. For purchases made since Ihal Dale it is considered an investment interest expense still deductible but Only if you itemize and Only to the extent that you have net investment income in any Given year from capita gains interest and dividends. As Long As it Falls within these limits investment interest unlike consumer interest for credit purchases remains 100 percent deductible. Premiums naturally occur As Well in the Market for municipal Bonds issued by state and local govern ments which pay interest that is exempt from Federal income tax. Because the interest is not taxable owners of Premium municipals Are not allowed to Lake tax deductions either for year by year amortization of the principal value or for a capital loss when the Bonds mature. So municipal Bond investors appraise Premium Bonds in that Market simply on the basis of the total return they offer interest payments minus the annual depreciation in their value. Premium Bonds like All other marketable debt securities Are subject to the constant ebb and Low of inter est Rales. Thus if you want or need to sell them before Matu Rity you can realize a gain or loss Independent of the projected decline in a Premium Bond s value from the time you buy it. And obviously investing in Premium Bonds requires some pretty Sharp calculating or the counsel of a trusted professional adviser willing to crunch the num Bers for you. But it also stands to reason that the More investors shy away from Premium Bonds the More potential opportunities they May offer for those willing to dig for them