LIKE KING CANUTE, the finance ministers of the five leading industrialized countries will meet in Paris this weekend in an attempt to hold back the waters. And, like King Canute, they are bound to fail.

The waters in this case are currency values, that of the dollar in particular. The United States has been seeking establishment of a series of reference zones, upper and lower limits for each of the major currencies, at which a government would be obliged to intervene in exchange markets to sell or buy.Some such understanding supposedly has been in effect since the end of October when the United States and Japan reportedly agreed to keep the yen rate for the dollar between 150 and 162.5. For much of the time since, it has bumped along at or close to the bottom of the range.

That is understandable. As we note above, little or none of the news out of Washington suggests an improvement - ever - in the budget deficit. And the budget deficit, almost all economists agree, drives the trade deficit and the


It makes sense for governments to intervene sparingly in exchange markets to disabuse spectators of the notion that the market for their currencies is a one-way street, a free ride to unlimited profits. It makes no sense at all for them to try to fight the inevitable.

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