Interesting thought on the dollar

GUy was blabbing on the CNBC this morning about the dollar...

Basically saying that b/c the dollar is down 20% to the yen, Toyotas should be 20% more. But they aren't, which means Toyota is losing its ass. Because of this, it's in the best interest of Japan to do what it can to bolster the dollar - and they will.

 

Guess this would apply to Honda as well? Makes sense. Never thought about it before.

 

Probably has something to do with the Japanese factories tied up in the US, e.g. assembly plants.

 

yeah, non-fixed retail items certainly take the loss the way a public traded commodity like oil would adjust for.

I don't know enough about it, but this stuff worries me. The high gas thing sucks, but that's how it goes. Shitty dollar is concerning.

 

Aren't most of the Toyotas sold in America built in America?

 

Yeah but it's a Japanese corporation - the profits of the corp are in yen. If the dollars coming in are worth 20% less, then they are making 20% less on cars sold in the US, regardless of where they are made.

 

Do they ever adjust the prices like this for cars? I know BMWs didn't change price as the Euro changed, and I don't remember hearing about our few car exports changing prices in foreign lands...

Doesn't change the root logic - Toyota is taking home fewer Yen for the same sales, so somethings gotta give.

 

Yep, and that's what i found interesting. If this is accurate, it's reasonable to assume that part of the reason the fed has been so 'cavalier' in rate cuts is that he knows it's in the best interest of the international community to prop the dollar.

I wonder how it affects the saudis or other oil producing countries? I'm betting not as much, because when the dollar falls oil goes up. That said - are those prices of oil determined by commodities traders, or by actual buyers of actual oil, or a little of both? I've never quite understood that. I think it's speculative futures contracts, though. Anybody?