A Dollar is not a Dollar …
Try as I might, I could not teach my hillbilly brothers and sisters that a dollar isn’t what it used to be.
When I first moved to Japan about a hundred years ago…(actually it was around Showa 58) that I moved there, the yen rate was about 250 yen to a dollar. I could buy a new car for $5,000 – a Japanese one at that. I could buy a house for $100K. I can’t even buy a garage in Silicon Valley for that.
But now, the yen rate is less than half of that. That same $5,000 dollars can only buy half a car now and $100K, can only buy a garage in Japan.
My siblings could not understand why a dollar wasn’t a dollar. They could not comprehend why the dollar wouldn’t go as far.
But when the price of Japanese goods began to go up, even double, here in the states…it began to hit home. Why? Well, I gave up on trying to explain to them why. But, go up the prices did.
Oh, and the house I bought in Japan twenty years ago, more than doubled in value when I converted it back to dollars.
No, my family couldn’t figure that one out either.
So, what’s this got to do with anything?
China has been overvaluing the yuan (sounds like yen) but it’s a different money unit. And soon a dollar won’t be what it used to be in China anymore.
And the price of that ‘made in China’ product is going to do what the old ‘made in Japan’ products did.
As the old cat said when he got his tail caught in the lawn mower, "It won’t be long now."
What do you think?
For up to date exchange rates, visit www.xe.com/ucc
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