FED'S JOHNSON WARNS AGAINST LOWER DOLLAR
  Federal Reserve Board Vice-Chairman
  Manuel Johnson cautioned against seeking "quick-fix solutions" to
  persistent U.S. trade and federal budget deficits.
      In particular, he told an American Stock Exchange
  conference, a decline in the dollar below current levels would
  exacerbate financial market conditions.
      "Trying to artificially depress the dollar severely below
  current levels ... would exacerbate financial market conditions
  and lead to further potential for financial problems."
      Nowhere, Johnson said, are Fed officials hearing that U.S.
  businesses cannot compete at current exchange rates.
      He acknowledged the U.S. trade deficit was persisting
  despite a decline in the dollar's value of 40 to 50 pct in the
  past two years.
      But the deficit is improving in volume terms and will soon
  begin showing improvement.
      "The stage I think is being set for a healthy, constructive
  expansion without inflationary instability," he said.
  

