On Currency

In this blog, you will find that not only does the United States is suffering its currency downfall, even the Yen is suffering its downfall. Therefore, whether the US dollar matures as the months progress. We don't know for sure whether the world economy will bounce back or if it will idel itself to death. Moreover, the information that is provided, you can find it at Bloomberg Businessweek Magazine and search for "The Good Business Issue" Everything here, you will learn just about what is going on for 2015. Click bottom ↓

Japanese Pri-minister Shinzo Abe, sees victory in December as an endorsement of economic policies, especially to weaken the Yen to help exports.

According to the information that is provided. Although, it may be true or not. But, as the Japanese economy reflects the U.S. economy, Pri-minister Abe, may be on the right track of improving their economy? The reason for this, is that in every country, there must be stability. Without having stability, a government or state will not grow. Yet, with the efforts that is being put into place, can create a reform. When a government reforms, it looks for ways of improvement. Therefore, some of the improvements can be fixed by eliminating the expenses that any government or state has in its control.

Furthermore, if a government or state look for valuable assets that can reform a government or state. It will prosper. The more assets it builds the less inflation will be created. Once inflation falls, the economy will become stable. The more inflation grows, the more a government becomes unstable. No matter what, all governments including Japan and the United States. Before a country can move forward and support other countries. The Authorities have to look into the assets that they have in its pockets. Because, if they over look it, there will be everlasting problems that will be influenced by generations to come.

Toyota and Honda Motor Co. expected to improve profits for the coming year, as the Yen weakens, by oversea earnings.

In the motor industry, as the Yen moves to a lower percentage. Toyota and Honda Motor Co. will be making moves towards its annual percent range. Making it a lot easier for exportation being executed. Which means, that as Japan's Yen falls. The U.S. Dollar rises. Giving investors the chance to make moves towards their increase of making profits. At the mean-time, share-holders will have a chance to make a boom in the economy. As this trend goes on, there will be more and more examples of this that will play an important role as the days passes by or as the months move on.

It would be wise to watch the Japanese market, because of this change. Once a government starts to change or reform, it's best to watch what it does and make intelligent choices for either your money to grow or how effective the economy will improve. Moreover, consumers will be looking forward into buying a new vehicle for the coming year of 2015, giving Toyota and Honda Motor Co. a chance to make profits and boost the Japanese economy. Since the prices of the vehicle will be a lot cheaper or affordable than its American counter-parts.

The number of Japanese companies following the weaker Yen, without going "bankrupt" as of 2014, with rising cost of imported goods, according to the Taikoku Databank.

As of 2014, the cost of imported goods rose to 301% which included; food, metals and construction materials. Therefore, smaller companies or businesses in Japan was able to capitalize on the rise of imported cost which gave its economy a chance to make improvements. As this trend will be noticed around the globe. Sooner or later, this trend will be noticed as we move into the new year of 2015. Now, Japan is making adjustments according to the Yen, which makes sense.

If Japan adjust its industry according to the Yen, the economy will improve. As to which, America had failed to look at this trend. The American economy will not stabilize. Furthermore, if the U.S. Dollar increases, its industry will plummet. But, the country won't go bankrupt or move into a depression. Yet, the U.S. will be moving into its next recession. Moreover, once this trend will be, again noticed. With the currency market being under the microscope. Foreign currencies will soon follow the Japanese Yen versus the U.S. Dollar.

Abe designed a new economic system to create a strong structure which; "Only the strong survive and the weak die off".

Pri-minister Abe has a great intention to make this move into improving the Japanese economy. Which makes perfect sense as to which, if an economy is strong enough, it will stabilize and grow. If an economy is weak, it will be unstable and die. Yet, most economy of history haven't died off. But, if a country that has an inflation, it will look for ways to deflate. As history has shown, which a country is unstable, they will go rampant. Hint: they will go to war. In hopes to bring its economy back down. 

Although, this can change. If the U.S. Dollar rises which is called: inflation, all U.S. made products will be a lot expensive. Therefore, all imports into the U.S. will be a lot cheaper. Now, does this make sense? In economics, when a country of any sort rises and another falls. Chances are, that if any country that is tied to that one particular country will rise also. But, this is not always accurate. Sometimes when a country's economy rises, its partners doesn't rise at the same-time. Most-times its partners economy falls.

In December, Abe made an address to Business and Labor Leaders.

"I want companies with higher profits to benefit from the weak Yen to raise wages and investments, on top of that, considering the prices they pay to their suppliers." Abe said during a meeting on December 16, 2014. With this proclamation, Abe's intention is right on the mark. Being that, he has given its local industry some breathing room for success. If the pri-minister haven't made this bold choice to do this, Japan would still be struggling into its future. This is a basic illustration of; "movers and shakers."

As an investor, you have to look at trends like this. Or as a business owner, when the government makes an adjustment like this, its a sign to make financial moves. Once a government makes a shake down of the economy, you have to make moves fast. Whether to buy or to sell. Most investors make mistakes on following the pack. Yet, successful investors don't. Successful investors look for trends like these. Since your money is working for you? It's time to notice a trend and make moves on it. Not be idolize by it.

The Package can't come soon enough for the Auto Industry.

Toyota's Ota Ward, have seen their profits go from bad to worse under Pri-minister Abe. Yet, this is not entirely Abe's fault. But, there is no one to blame in this matter. Since the auto parts and materials suppliers are having a difficult time to compete with the demand. There must be an adjustment. Which Abe did. Abe, saw what was the problem and made the move to make a bold change for the economy. Yet, most business owners, directors or managers, have come to a point of blaming an authority.

And this problem is not only in Japan, it is also in the United States. Moreover, this problem is also in the world abroad. Businesses is always pointing finger to their politicians than what is happening. But, one source can be blamed. During the past decade, taxes have been risen dramatically that its insane. How can an economy improve if taxes rise every year? When taxes rise, it causes inflation. When there's inflation, there will be an explosion. And when something explodes, disaster strikes.

Therefore, people will blame its government. Although, it should be the individual. But, it can change. The only way that this can change, is when a person takes action and make an adjustment. Furthermore, all politicians change. They change with the times. As time changes, so does its government. People will vote for or against a particular party. And the result, the people have to suffer the fact and the opinion of its leader.

In the next three months, the first quarter of the year from January to March in the U.S. Calendar. The Auto industry will boom. When the second quarter comes around, the trend will slowly move down hill and will flatten by the time of Mid-quarter or third quarter comes around. Before the year ends, the auto industry will be at a stand still. Until another change will be in place. But, Auto parts and suppliers will be making money throughout the year. Being that, more and more vehicle maintenance will be needed. Not so much as automobile sales.

Since 2010, the number declined 1,748% according to figures by the local government.

By record, during this time, everyone and every country was effected by 9/11 a year before. Which made the world economy struggle. From all parts of the trade industry, everything was moving slow and climbing slowly. Some businesses suffered and died, others have rebounded and grew exponentially. No matter what the cases were, there needed a change in government. In the United States, after George Bush Jr. left the white house and Obama took office, the U.S. economy rose from the ashes.

Then, governments all over the world, soon crawled out of the ashes as well. Which made a great change as the years moved on. Although there were struggles, but it wasn't noticeable. The only impact that was heard of, was the unemployment rate that struck globally. Many businesses abroad, including business in Japan were crawling with unemployment hikes. And not soon after that, the tsunami that struck Japan had destabilized the economy two or three years later. Now, the economy is balanced. Yet, haven't improved.

In the Past Decade, the Yen improved.

"With the Yen appreciating for much of the past decade, companies from Ward switched their supplier network to China and other parts of Asia." Said, Funakubo. What is said here, is that Japan had expanded their network. Not only did they do business within Japan, they were not forced, but had to look beyond the horizons to improve. Which in the U.S. it almost mirrors the process of improvement. Once a government or state struggles financially. It has to out-source its income. 

From history, this is not a happy ending. It continues as a drama. Meaning, although it's good to out-source to over-seas trading. Yet, it has a dramatic effect. Reason being, what causes a dramatic effect is by; one: when resources decline. Two: when allies become enemies. Although, this type of trade is good, but its really risky. On the upside, exportation is a lot cheaper than importation. Sometimes it's the other way around. Sometimes importation is a lot cheaper than exportation. Put it this way, if an economy inflates, all of its assets become expensive. Therefore it would be cheaper to import goods and services from other countries.

And for a country, government or state to stabilize,  it can profit from exporting. Yet, Japan sees this as an opportunity. Since the Yen is moving into a decline, it is more affordable to export its goods and services, which will raise the profits. Look at this closely; "Cheaper to export, expensive to import." For example:

The US trades to Japan, Japan is at $.50 cents and US is at a $1.00, You buy 100 cases of products from Japan, that's about $50.00 dollars. And Japan bought 100 cases of products from the US, that's about $100.00 dollars. 

But look at this for a moment. If the Japanese Yen is worth only .50 cents, for ever dollar that's what? About, 5% or 50%. Which means, that each Yen could be as much as $50.00 dollars. Make sense? For example:

For each 100 cases that you bought would be about $5,000 thousand US dollars versus the Yen.

In a sense, if you were Japanese, you would have $5,000 thousand dollars in your pocket for making this trade. That's profit! From .50 cents to $5,000 dollars. That's not bad. Yet, lets look at this if you're an American. For example:

For each 100 cases that you bought would be about 10,000 Yen, which would be a $1,000 US dollars.

To some people, this is not profit. This is a loss. But, to most people, this is a win-win. Either way, you'd still make a profit. The only way that an entity will lose, will be if an entity ends up bankrupt. That is when all assets are seized. Get the picture?

A Tool Maker has been in Business since 1866, Is paying Higher Wages in China.

"A tool maker that has been in business since 1866, is stuck paying higher wages in China with a much weaker Yen." What is said here, is a far cry. Reason being, some companies have to go off-shore to create businesses. But, doing so, causes an avalanche. What this avalanche is, when a company out-source itself, it has to render itself to not only its local government that it's rooted from, but also where it is established. In America, this type of process is the same. American businesses look at this as if it is a lot cheaper. Being that, cheap labor. But, they fail to realize the fact that not only do they have to obey local laws (which they don't) and obey the established laws of where they're doing business from.

Which in turn, you get tax breaks. A Local Government can't tax an entity that is out-sourcing. And that is why most business owners are doing this. Look at this for a moment; when you out-source, you will be bound to pay-up on wages. Yet, most companies are avoiding this. Which greed sets in(more on this later).

For instance, if a typical company or business acts upon avoiding taxes. Moving a business into another country, won't make a difference. Why? You will be taxed any way. But, most business owners look at this as an advantage. The advantage of doing off-shore business, is the fact that the dollar changes. Therefore, some countries or states don't normally apply higher taxes as to which an entity was or is rooted from. For example:

Since, the Japanese Yen is now moving towards a lower percentage, giving the US dollar a higher leverage, which leads to higher taxes in America, to lower taxes in Japan.

This formula gives a leverage for Japanese businesses to increase its revenue up to 100% percent. Which will yield higher volume. In America, the volume will deflate, which includes less investing and movement. If there are investors that are investing into the American market, some will get out and some will stay. Those who stay, will hold on to their investment for a time when the US dollar decreases. Although, it will be far from now that the US dollar will improve.

In business, many people look at a dollar increase as a plus. Yet, its a smoke screen actually. When a dollar increases, although it may seem as cash-flow, more of, evaporation. Why? For one, like what is said earlier, there is a problem when some thing increases. If you were to turn on a faucet and let the water run. You will see that you have increased volume faster and easier. But, you also will have over-flow. When something over-flows, chances are you will have leakage or you will have your money running all over the place without a cap to sustain it.

Therefore, you may or may not have heard the term; franchise cap, market cap and so forth, right? And if you have. This is what it means, when everything is over-flowing and money is being lost, you set a cap to cover the loss, either wages or investments. But, in business, a cap is used to control. Or it is a limit to what an entity can or can not do. Get the picture? To run a business or to operate a country or state. You have to create a cap or limitations.

"Prices will go up and life will get more harder."

This statement rings true. As what is said earlier, no matter what happens, even if you increase a dollar you will have problems. For example:

Lets say, that you have bought a product that was a dollar. The product was a composition tablet. You bought it at retail, you didn't buy it at whole-sale. You set the price at $3.00 dollars, giving you at least a $2.00 dollar profit. A customer comes to your store, the customer noticed the price and thinks that he/she has a great deal, because you advertised that it's $3.00 dollars. The customer buys the product and leaves your store.

Now, you already have made a sale, you received a profit. Now you are waiting for the next day to come along. The next day, same customer, different scenario.

The customer that came to your store the other day and see's the price of your product. During that day, that customer saw a similar product that you have in your store, but with a cheaper price. You now have increased that product that you sold to that customer to about $6.00 dollars. In the other store that the customer saw, was at $.50 cents. Soon that customer walks out of your store, leaving nothing but a visit. You didn't make a sale and a product wasn't sold!

The point here is that, since you have made an increase in your product. You didn't get the sale. Why? Because the customer saw what he/she could get for what he/she can afford. This won't make any improvements whatsoever. Yet, today, we believe that this type of problem is on going. When there's inflation within a country or state, you as a business owner will eventually increase your sale price, because you have to meet with the demand. Now, if it was the other way around.

If the value of a dollar was less? You would be making huge amounts of profits. Because, as a business owner, the cheaper it is to get something at wholesale will lead to greater gains. Now, what is said in the example above, if the customer saw a cheaper price in another store, chances are the seller bought the product at whole-sale that gave it the ability to make an increase. The increase was affordability. Your loss, deflation. 

Lets face it! As the dollar and yen goes up or down in any currency market. It makes an impact in the global trade in the stock exchanges. In Japan, at this very moment, they're feeling the crunch that the members of the government won't be able to see any improvement soon. Yet, improvements take time. But, when you decrease your expenses and raise the assets. Your assets become more valuable. If the assets decreases and expenses rises. Your assets become worthless and your expenses become worthless. Expenses doesn't become valuable.

"I still believe Abe-nomics has a chance, though I feel the moves are way too slow, we'll all go bankrupt waiting." by Yuki Hagiwara and Dave McCombs.

Note: As the number of Japanese companies citing the weaker Yen as a reason for going bust, has almost tripled this year.

Conclusion

In this blog, we hope that you have understood what is being said here. You can find these information at the links provided. It will shed some light for you to understand just about what is going on in the business market today. Being a business owner, you have to watch the trends. Whether it be in the stock market, currency market or consumable market. Here's a link: Bloomberg Businessweek