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» Operations of multinational companies. They get some benefit from a weaker greenback because profits earned in, say, West German marks or Swiss francs are worth more dollars to be sent back to the parent company in dividends, though this can be offset by the greater dollar operating costs abroad. Also, American-owned multinationals have been slowing down investment abroad. One reason is the sluggishness of European and Japanese economies. The drop of the dollar has added another reason, by increasing the amount of dollars that multinationals must spend to build, buy or expand foreign factories. Weakened American investment abroad prolongs the global economic stagnation that the U.S. wants to counteract.
» Foreign investment in the U.S. Cheaper dollars have led European investors, particularly West Germans, to buy American properties at bargain rates. Says Zurich Real Estate Broker Richard Ufer: "Ten years ago every German millionaire wanted to own a jet. Now the status symbol is a farm in America." But as the dollar's value sinks, some foreign investors are having second thoughts; profits on their U.S. investments are earned in dollars that are worth a declining number of marks and Swiss francs. The possibility is growing that foreign investors will pull much of their capital out of the U.S.; such a flight would cause the dollar to plummet even further and force the U.S. to intervene in foreign markets on a huge scale. That in turn could work to limit funds available for credit in the U.S., kick interest rates up and hurt capital spending and home building.