Would someone explain for me the ying and yang of Asian Markets...with an emphasis on how it affects the U.S. I was in Japan in 1991 when the Yen was 130 to the dollar. I was under the impression then that the conversion rate was wrong. If you considered a hotel room of equal quality in both the U.S. and Japan, the Japanese room cost more dollars. This suggests that the rate should have been $1 = 150 to 200 yen.
Then, the big issue was Japan "flooding" our markets with cheap imports. Remeber the big hype on "imbalance of trade"? So, the US and the monetary fund intentionally drove the value of the yen to $1 = 100 yen, which was really out of balance. This happened in 1992-3. Then the bottom dropped out of the NIKKEI. It dropped by a factor of 3. Since that time, the NIKKEI has slowly dropped, and the yen continued its strength against the dollar.
In the mean time, the U.S. economy has grown stronger, interest rates are down, and we have low unemployment.
Now will someone please connect the dots for me. I know in theory, we operate in a global market. So, in theory, some economist should be able to track the ebb and flow of events. And give some reasonable explanation to it all.
But I have not heard one voice of wisdom that can explain whether the U.S. will benefit more from cheap imports or from a lack of foreign markets for our techno-equipment. In the absence of a voice of reason, I am going to ignore the "chicken little's" of the world and stick to the contrarian theory and go bottom fishing both with Intel and the Japanese market.
Greg |
