Oil falling in USD terms again. USD/CAD quantifying (financially) new terms of trade.
Canadian dollar falls to lowest level since 2004 as oil slips below $40 again https://t.co/fkMMz1mutB pic.twitter.com/SSeajEIvA4
— Yahoo Canada Finance (@YahooFinanceCA) December 7, 2015
What makes no sense in all of this is the yen.
ReplyDeleteJapan isn't "cursed" with natural resources!
ReplyDeleteMike, You'd have to really delve into the unit prices paid for things other than oil...
ReplyDeleteiow oil to Japan might be off 60% ($100 down to $40) in USD terms, but they might be doing the same thing with their finished goods too ie lowering their price in USD terms... ie passing on the savings rather than trying to screw us like the opec people do...
Like I saw a $70 rebate off of a set of their 4 Bridgestone/Firestone tires a while back...
And then it may go even beyond import/export as Japanese auto firms actually do a lot of their production/assembly in the USA... Toyota has the Camry plant in Georgetown Kentucky...
But if the Japanese firm (Toyota) lowers the price of their vehicles in USD terms (even if they are made in the US) it probably weakens the Yen vs the USD... as the Japanese owners of Toyota are lowering the offer price on their product in USD terms...
It works the same for both labor and ownership cohorts... ie both get reduced terms