Karl Otto Poehl, president of the Deutsche Bundesbank, has laid it on the line. Under relentless pressure from the Reagan administration, the West German central bank finally cut its discount rate to 3 percent.

The motivation, clearly, was to help alleviate some of the selling

pressure on the dollar, which has been in a free-fall almost continuously since the beginning of the year.While Mr. Poehl gave in to Washington, he warned the United States was ''playing with fire" in trying to "talk down the dollar."

To underscore German concern about the inflationary implications of U.S. actions, the Bundesbank simultaneously acted to neutralize its move. The Germans did this by boosting reserves required to be held against deposits and by reducing the funds available for lending by the central bank.

Chances are the Bank of Japan will follow the Bundesbank's lead in cutting its official lending rate soon. Despite this prospect, however, the

dollar once again declined sharply in hectic trading. As Mr. Poehl observed, the value of the dollar is not determined in Frankfurt or in Tokyo, but in Washington.

Japanese Finance Minister Kiichi Miyazawa, who reportedly has been maneuvering to replace Yasuhiro Nakasone as prime minister, came scurrying to Washington to try to get Treasury Secretary James A. Baker III to do something substantive to stabilize the dollar.

But the bland statement that was issued at the conclusion of their discussion made plain that he came away empty handed. This does not bode well for the Japanese economy, which does about 40 percent of its foreign trade with the United States and Canada.

So long as the members of the Federal Reserve Board simply talk about resisting inflation but keep on printing money at Latin-American-style rates, two things will happen: One, the dollar will continue to go down in the foreign exchange markets, and, two, the excess liquidity will continue to foment wild speculation in the equity markets. Cosmetic changes in interest rates are likely to have little, if any, sustained influence on the value of the dollar.

Washington's strategy, quite plainly, is to try to force Japan and Germany to reflate their economies along with the United States. But this approach entails huge risks and is very likely to backfire. At present, the United States must borrow almost $3 billion a week from foreign savers in order to finance its international deficit.

With U.S. monetary expansion running out of control, foreign investors are sure to become more and more leery of adding to their dollar-based assets. As this happens, the downward pressure on the dollar will intensify - a process that could take the dollar down an additional 10 percent in relation to the currencies of other industrial nations.

"One need not be neurotic about inflation, to issue warnings about unduly lax monetary policy . . . Every major wave of inflation has been heralded by an overly generous money supply. In Germany we should like to avoid this mistake," Mr. Poehl said recently.

Unlike the situation in Japan, chances are that the gyrations of the

dollar in the foreign exchange markets should have relatively little impact on the German economy. There are two reasons for this:

First, the bulk of Germany's foreign trade is within the European Economic Community, not with the United States. Secondly, in real terms, the external value of the mark has risen comparatively little in relation to the currencies of Germany's chief trading partners - despite the drop in the nominal value of the dollar against the mark.

Politicians in Washington, and their surrogates in Wall Street, maintain that the German economy is slumping and therefore would benefit from an injection of easy money. "Most of the available evidence belies the purported strength of the German economy," according to David H. Resler, chief economist of Nomura Securities International.

However, politicians in Bonn, whose approach was reaffirmed in the recent German elections, have a different attitude. In their view, the German economy has been doing quite well, thank you. During the current business expansion, real GNP in Germany has been following what the Bundesbank calls ''a clearly defined growth trend of roughly 3 percent.

''The characteristic feature of this upswing, the longest one in Germany since the Second World War, is that it has so far been relatively free of strains," the bank said in its December Monthly Report.

Per capita, this is "the fastest economic growth of all of the industrialized nations," according to Mr. Poehl.

"In the meantime, this expansion is being fueled almost entirely by domestic demand. In 1986, the growth rate of private consumption was 4.5 percent and that of capital spending almost 12 percent," he asserted.

But for the past year, monetary expansion in Germany has been running well above the Bundesbank's targets. The central bank money stock, as the Germans describe the monetary base, came to 219.3 billion deutsche marks in November, up 7.7 percent from a year earlier.

By contrast, the upper band of the Bundesbank's monetary target for 1986 was 5.5 percent. In Frankfurt, unlike Washington, monetary targets are taken seriously.

"There are hardly any definite signs that the substantial money balances accumulated last year are being maintained voluntarily by enterprises and households over the longer term," the bank said.

Mr. Volcker may believe that he can print money that no one will spend, but the Germans - who have had plenty of experience with runaway inflation - are more skeptical. Playing with fire seems to be a popular game in Washington. Foreign investors, however, are clearly reluctant to join in the fun.

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