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Watching the Dollar Tumble

EIGHT years ago, I was in Paris at one of those uncanny moments in economic history when the dollar ``soared.'' What a wonderful word to describe its ascent as it preened its wings and rose past five francs, six francs, six-and-a-half, all the way to seven and change. I remember its crest. We were walking in the St. Denis quarter and the street fairly buzzed with the news. By afternoon banks throughout the city had closed to assess the situation. And there we were with a thick pile of travelers checks growing thicker, in a manner of speaking, by the minute. What a summer it was. We bought French clothes and dined at restaurants with white linen and heavy silver plate.

This year I have been in Rome to witness a rather different phenomenon, the dollar's ``plunge,'' and occasional ``dip,'' to record lows. Now my dark blue plastic pouch of checks seems woefully thin. If we eat in restaurants at all, they have neither white linen nor silver plate. Purchases are painful; almost $2 for six eggs, $14 for a chicken. My daughter gazes longingly at Barbie dolls for $36, and my son at cardboard puzzles for $23.

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As we look forward to a full year in Rome, we realize that even incidental costs such as postage can become significant. A packet of papers mailed to us from the US cost $7.26 in US postage. We mailed a similar packet back to the US for four times that amount.

Recently my husband and I found some public tennis courts that seemed affordable at $10 an hour. We forgot to buy balls ahead of time and had to buy them at the clubhouse, a costly mistake even at home. But never this costly: $16 a can. So what if the can had four balls instead of the usual three. That's five times what I am used to paying.

I remember how great it felt to change money that summer in Paris, to see that fabulous exchange rate multiplied over hundreds of dollars, and to leave the bank with a handful of French bills so large I had to fold them over twice to fit them in my billfold. This year when I ask the exchange rate, sympathetic bank tellers shake their heads woefully. ``Lower, always lower,'' they inform me. Certain exchange offices no longer post the rate on the dollar because it changes so dramatically, while the European currencies, thanks to the Common Market and European common sense, fluctuate only slightly.

Eight years ago in Paris, I felt proud, almost cocky, when I pulled out my American dollars, as if I had somehow contributed to the economic growth of our nation so clearly reflected in the current state of events. I did not know that the burgeoning dollar reflected bureaucratic changes far more than real economic growth, and that the surge was driven by profiteers worldwide who hoped to catch a ride on the Reagan economic bandwagon.

Now most Americans are paying in one way or other for that summer in Paris. Perhaps here, overseas, we are among the first to feel the impact of this recession, economic slowdown, or whatever hindsight will call this period, as world investors judge our economy to be a bad risk and look elsewhere for the good buy. Even the crisis in the Gulf, an event that usually would have returned intrepid investors to the safe haven of the dollar, failed to lift it from the depths.

As I write my rent check, the equivalent in lire of $200 more than it was before the dollar's most recent downward turn, I can't help but wonder what happens in the back rooms of Wall Street and Washington to set the economy on such an unpredictable and irrational course. We will have to get used to playing with dead tennis balls, but fortunately our income is such that we can still live well, albeit carefully. Others, of course, are not as fortunate. Moreover, those who will suffer the most during this period of economic weakness are burned twice. Unlike us, they could not afford French dresses even when the dollar was strong.

I don't understand junk bonds, budget deficits, or the savings-and-loan debacle, but I suspect the cronies behind these maneuvers enjoyed their privileged romp through the US economy and had enough inside information to bail out before the fall.

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I hear that junk bond king Michael Milken vacationed in Italy before returning to the US for sentencing. Our paths did not cross so I do not know whether he felt any guilt as he watched the dollar's plunge, or whether he even noticed it; no doubt his assets are tucked away in a Swiss bank. Furthermore, I suspect that when he finished dining off white linen and silver plate, he asked for il conto and laid down an appropriate sum of lire, never stopping to calculate what his meal cost him or what his and others' deeds have cost us.

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