The pound briefly touched $2 again today. The German mark and Swiss franc, once worth a quarter, are now at about half a dollar. Two Japanese yen may soon be equal to a cent.
These currency gyrations, largely ignored in American newspapers are frontpage news in Europe. Here, the dollars' drop against some other currencies is watched with mingled pride - especially by the British - and apprehension.
The stories relating each day's moves are invariably full of the metodramatic jargon of money dealers. In France, it is a "crise monetaire , which is the language that President Giscardo d'Estaling was expected to use in his talks with President Carter.
Elsewhere, headlines grimly record "a weak dollar," or a "troubled dollar," or "a lack of confidence in the dollar - as if there were genuine fears that it, no more than the Russian imperial ruble, could be exchanged for goods and services.
Economists are far less disturbed, however, save for those in European central banks and finance ministries who fear that their "strong" currencies might weaken jobs and output in their export unruffled because they know that the u.S. economy, the world's strongest is enjoying a brisker recovery than most, and with relatively little inflation. As harsh as U.S. price rises are the inflation rate remains well below that of most other industrial nations, West Germany and Switzerland excepted.
Weakness or a lace of confidence are terms appropriate to the Portuguese escudo, the experts say, but not to the dollar. Any dollar-seeking black marketeer demonstrates this daily on the streets of Warsaw or Prague.
Why, then, have the multinational corporations and the banks, the biggest crurency speculators, been so eager to sell their dollars for marks, yen, franc and even pounds?
The experts say there are two major determinants of the rate at which currencies exchange: one is the relative rate of inflation - the internal buying power of a currency - and on that score the dollar should be climbing against most. The other is the relative balance-of-payments situation whether a country is spending or selling more abroad than it buys.
Sometimes the bans and others with excess cash to exchange stress inflation, which took the pound for a nosedive in 1976. Sometimes the fashion runs to the balance of payments - the current preoccupation.
The United States is expected to spend abroad this year in excess of $18 billion more than it takes in. This increases the supply of dollars far above the foreign demand, causing the price to fall against the currencies of other countries with payments surpluses.
Experts and non-experts alike now recognize that someone must bear the deficits that are the necessary counterpart of Arab oil surpluses. The Arabs cannot buy enough arms and other goods to eat up their take.
For a while, the so-called developing nations of the Third World bore the deficits, but they could do so only as long as Western and especially U.S. banks too risky a game to continue.
Under ideal conditions, the Arab deficit would be shared out equally. But the West Germans and the Japanese were endowed by the immediate post-war occupation governments with an undervalued currency that triggered export booms in both nations. Ever since, Tokyo and Bonn have concluded that the only road to prosperity is selling abroad, running surpluses.
To promote this, both try to keep their currencies down and subsidize exports with relatively cheap marks and yen. This gives both large payments surpluses year after year. Britain has joined the surplus club for a different reason. North Sea oil, owned by Britons and paid for in pounds, is replacing foreign crude at a rapid rate.
The West Germans, Japanese and now the French are insisting that the United States must solve its deficit problem, must "get its house in order - as if it was running a slack disorderly house.
Washington could comply with a stiff dose of deflation, sharply cutting the demand for all imports and lengthening domestic jobless rolls. But the others really do not want any cut in the demand for their goods; quite the contrary.
So the United States is told to cut its demand for Arab oil, especially for motorists. ANy Mercedes-driving German banker can view this prospect with ewuanimity and even complain of oil-wasting Americans.
More detached experts, however, see no reason why U.S. motorists should subsidize West German and Japanese exports, why there is any magic in the exchange rates on any given day. In a world of floating currencies, rates are supposed to change.
Those whose currencies are scarce should endure a rise in price; those whose currencies are abundant should enjoy a fall. The difficulty is that the West Germans and the Japanese, say the experts, want to enjoy the currency scarcity that comes with a payments surplus and the export boom that is fed by a relatively low exchange rate.
So the German, Japanese and British have been spending their currencies to buy up the incoming dollars. This keeps their currencies down. Economists regard it as wasteful but that does not stop Bonn and Paris from urging the United States to do the same.
There is something Bonn, Paris, Tokyo, London and others could do to close the U.S. payments gap and provide jobs at home: expand their won economies. All are running with plenty of slack and need not fear that faster growth would spur inflation. All might enlarge government spending, cut taxes or both.
A faster growing West German economy would absorb more u.S. imports. It would also make jobs for Germans, who fear layoffs because a more expensive mark is shrinking sales abroad.
Britain will expand this spring, partly to prepare voters for an election, but German and Japanese expansion, the economists contend, would do most to right the imbalance.
Meanwhile, the experts think the imbalance could work itself out through exchange rates alone.
A falling dollar makes American exports cheaper abroad and makes European imports more expensive. If the rates are allowed to change, the European surpluses will shrink and so will the U.S. deficit.
In any event, the experts say, it is only a question of time before sentiment shifts, too. Then, a higher premium will be placed on the U.S. inflation record and less on the payments balance.