European Stars And Stripes (Newspaper) - February 26, 1989, Darmstadt, Hesse                                Page18 the stars and stripes sunday february 26,1989 business news n a Ami a i Mhz he High a him a he Ghibih Phil Hollis recall Greener february Days from Page 1 1987, the Trade deficit was $ 170 billion last year it fell to $137 billion. The bad news is that some economists believe the Dollar must fall further if the Trade deficit is to continue improving. And for . Personnel overseas thermally bad news is that buying Power is weak and might be getting weaker. In 1985, though the motto of service members an civilians in Europe was let the Good times  suddenly the things you wanted to do you could afford to do said Hoffpauir from Nas Simonella. The Gucci store made out like a Bandit. Eighteen Carat Gol jewelry foreign cars. A lot of these things became affordable. It was an unexpected Beautiful  maj. Sylvester Marchman commander of the 7020thsecurity police so at Raf Fairford England said he did t go wild when the Pound and Dollar Exchange rate was nearly one for one. But he enjoyed himself. It made life easier he said. My family and i did a Lotof travelling. We saw the sights. I Don t think it was too much of a Good thing. I know it boosted my morale Andi m sure it boosted the morale of a lot of other  staff sgt. Edward Palomares stationed in Frankfurt West Germany saw the sights too. You could go downtown with $10 and spend the whole night Sai Palomares who today works in administration at Frankfurt military Community Headquarters. Palomares whose base pay at the time was around$1,240 per month bought expensive Crystal from Wiesbaden and a new car when the Dollar was , he works a second Job As a bouncer at a Mili tary nightclub to help make ends meet. Nothing s for real very Long said Palomares of the Dollar s precipitous plunge Over the last four years. But in Early 1985 some service members thought the Dollar s rally would last forever. Bow and Mercedes dealers in West Germany an Fiat dealers in Italy did a land office business. On the busiest Days the dealers would make would be Ameri can buyers form a line outside the showroom to wait their turn. Other americans bought Homes or truck loads of furniture with their All powerful dollars. You basically had the Money to do whatever you wanted. We were spending without thought said Cocker one who today is assigned to Frankfurt Mili tary Community Headquarters. Two Hundred Marks on dinner for two was  Cockerline bought a nearly new Mercedes Sedan forthe equivalent of $4,000 and two of his friends bought Brand new bows. When i first arrived in Germany in 1982, the Dollar was Worth 2.30 Marks. Between then and 1985 it continuously went up he said. By february 1985, Cockerline Sodus Operand was to Exchange his entire paycheck each month for Marks. He extended his tour in Europe four times so he would t have to leave the Good times behind. Unhappy anniversary from its feb. 26,1985, High the Dollar has lost half its value against Many european currencies. This Chart tracks what one Buck bought on anniversaries of its feb. 26 Peak. 86 87 88 German Mark Exchange rate Lor feb. 23 86 87 88 89 British Pound Sou rce Sas archives it was so comfortable to live Here i stayed he said. Idin t care what happened in the states. Americans were spoiled. I had no vision that the Dollar was going to fall Buti had no real appreciation for it getting to be 3.45 either Cockerline said. Most service members in Europe at the time had never known anything other than an Ever strengthening Dollar. There weren t any peo ple Over Here who had been Here Long enough to Tell us to beware Cockerline said. People knew it was going to end sometime but Asfar As tomorrow. Well they figured it would still be going up said Hoffpauir. People were wrong. After feb. 26, 1985, the Dollar s highest rate at Mili tary banking facilities in West Germany was 3.40 Marks on March 11, 1985. By year end the Buck was Down to 2.44 Marks. In 1986, it did t get above 2 46 Marks for a Dollar. And in 1987 and 1988, it never topped the 2-Mark level. Many service members got Hurt during the fall. After the Dollar rate started going Down it got unbearable for a lot of people who had overextended themselves Cockerline said. His two friends with the bows had to get rid of their cars because they could t afford the monthly notes and insurance pay ments any longer. A Usa eur study at the time said service Mem ers in pay grades e-6 and below who had built lifestyles based on a 3-to-l or higher Mark to Dollar Exchange rate were Hurt the most by the Buck s decline. In some cases the 1987 study said service members were forced to Send family members Home because they could no longer afford to support them on the euro Pean Economy. Personnel enrolled in debt counselling went from is graphic Margit Joelo 9,611 in 1984 to 31,419 in 1986, the study  emergency Relief loan requests for rental pay ments to support move in costs and to avoid eviction increased by 27 percent in 1986 and loan requests for Utility payments went up 40 percent. German pawnshops also started doing a booming business with american customers. Over the last two years most americans have adjusted to lower Exchange rates and reduced expectations. You just have to do without said Palomar Sof Frankfurt. You have to pay the Basic stuff  the last couple of years it seems like our expenses have been climbing every month said Deborah slim a Navy wife in Naples Italy. We be had to Cut out Many of the amenities like dining out shopping on the Economy and weekend trips she said. The beat ing we be taken on the Dollar has taken a lot of the enjoyment out of our tour  and some americans Are glad to be going Backhoe these Days. When we came to Italy in Early 85, the Dollar was Over 2,000 lire said Cecilia Ogden also a Navy spouse in Naples. Her family will be leaving for the United states in a month. In 1985, they rented a four bedroom Villa on the outskirts of Naples for 1,400,000 lire about $650 within two years the Dollar s fall had pushed the rent above $1,000 a month. It really put the Hurt on us Ogden said. Ill be glad to be going  others still find a Way to enjoy life in Europe but few expect to return to the Halcyon Days of 1985 i d be Happy if we got to 2 Marks for a Dollar an surprised if we got Over 2.20," said Palomares who plans to remain in Germany two More years before retiring from the army. I Don t think Well get to 3.45 Marks again.  contributing to this report staff writer Alba Bragoli in Naples Italy events faed to get Rise out of Dollar the Dollar languished on world currency markets last week shaking off at least three events that in better Days might have been cause for a significant rally. Instead the Dollar appeared to be headed lower at week s end. Even a . Federal Reserve discount rate increase from 6.5 percent to 7 percent interest on by Randy Mcclain Friday was t enough to Spur the Dollar upward i european trading. Earlier in the week there were at least two other disappointments. First the . Government reported wednesday that . Consumer prices increased 0,6 percent in january. That was higher than most foreign Exchange traders and economists had expected and the largest increase reported in two years. Federal re serve Board chairman Alan Greenspan called the figures disturbing and he said they represent Evi Dence that inflation is still a major problem in the United states. Last year the average monthly in crease in consumer prices in the states was 0.4 per cent. But the Dollar still drifted lower falling from1.8430 Marks tuesday to 1.8375 Marks by the close of business wednesday in London. The second false Hope for the Buck was a report on thursday that Chase Manhattan and at least one other major Bank in the United states increase their prime lending rates from 11 to 11.5 percent in the Wake of Short term interest rate tightening by the Federal Reserve. Speculation among currency traders on Friday was that other major . Banks would soon follow suit. High interest rates tend to attract investors to Dollar denominated investments and that generally moves the Buck higher on world markets. But the Dollar for the most part shrugged off this item too. The worst news for the Buck though came Latef nday afternoon from new York. The Federal Reserve announced a half Point per cent increase in the nation s discount rate to 7 per cent. It was a move that currency markets have been anticipating since at least late last year but it to failed to move the Dollar higher. One currency trader in Frankfurt West Germany said the Dollar s stagnant performance indicates that foreign Exchange markets May finally have lost Faith in the Buck. In Short he said this could be the Star of a further fall. In the next three to four weeks we might experience investments switching to the German Market he said. The thinking of some currency traders seems to be that interest rates in West Germany Are on the Way up too and investors looking for top rates no Long rare forced to go Only to the United states. We May see a switch out of the . Dollar int other currencies said the trader who spoke on the condition that his name not be used. The Frankfurt trader said he sees the Dollar falling Back to 1.80 Marks in the week ahead. It All adds up to further bad news for servicemen Bers m Europe. The Buck started the week around 1.8435 Marks for a Dollar before heading lower the military Exchange rate for West Germany Wasset at 1.81 Marks Friday afternoon the same As a week earlier. That rate will apply to military banking transactions through monday. After that it could be worse. The stars and stripes