Is the USD Getting Stronger? Why? And What Effect Will It Have on the US Economy?

With the counter effects of Brexit on the economy, consumers are starting to worry about the future of the US dollar. Is it getting stronger? And is this a good thing or a bad thing? How will it affect the economy? And the exchange rate? These are questions that are one the mind of a lot of consumers, both in the US and worldwide.

 

The value of the US dollar is measured by foreign exchange reserves, Treasury notes, and exchange rates. Foreign exchange rates are the amount of dollars held by foreign countries. Of these three methods, the most common is the exchange rate. All three of these methods have shown an increase in the US dollar over the last 5 years. This is due to the fact that both Japan and China are still purchasing the USD to control their currencies, thus lowering their export costs.. Also the economic reform in China has led to slower economic growth in 2015; it pushed investors back to the USD. And finally, Forex traders are reaping the benefits of higher Federal funds rate as the interest rate in Europe has been on a steady decline. Use the best trading tools to ensure you are getting the best information – one of my favourites is right here from Trusted Binary Reviews.

 

So is this good news for the United States? Or will it have a negative effect on the US economy?
The answer is that it is both good and bad. An increase in the USD will be beneficial for those US businesses that export their goods. However, this will increase the price of these goods thus making them less appealing to overseas markets. This has already had a negative effect on the US manufacturing index as in December of 2015 it hit its lowest level since June of 2009.

 

With the international chaos over the last 2 years, the US has once again become the pillar of economic stability. Brexit has caused the British pound to plummet to an all-time 31 year low while the value of the US dollar has steadily increased as major investors are turning to the stability of the USD versus other currencies. There was a 9% increase in the US from mid 2011 until 2015. However, in the last two years there has been an overwhelming increase an additional 20%

 

In order to counteract an increase in overseas prices on US goods, a lot of  US manufacturers and businesses are looking to increase their overall productivity by drastically cutting down on their workforces and also investing in cheaper methods of export, production and even technology. As a result, of the price increase and lack of overseas sales due to this price increase, United States business have suffered  a 2.6% decrease in revenue. In other words, larger US businesses earned a great deal less from overseas sales after converting the foreign currency back to US dollars.

 

Going forward, the indices in the value of the USD poses some daunting challenges for US based businesses. As long as the dollar keeps increasing, it will depress the rate of growth of the US economy. However, for those companies that export to the United States will be able to lower the price thus causing US companies to suffer and lose market shares both in the US and overseas. This will then result in a loss of sales, which will then snowball into an increase in unemployment.

 

A decrease in exports compounded with an increase in imports will result in a higher trade deficit. This means that as Americans are purchasing items from overseas companies due to competitive prices, the cost of living will increase. This makes it harder to generate new jobs for Americans as are goods and services are now being produced overseas. This will especially affect the working class. However, wealthier US residents will now be able to travel aboard thus increasing the value of the US dollar overseas.

 

Lastly, it should be noted that the increase in the USD is not to the fact that American business is booming, but rather it is due to the fact that economy of other nations is suffering. A great many countries are counting on the US dollar to increase in order to benefit their losses. A lot rides on the impending US Presidential election? Will the USD continue to rise? Will the deficit increase to dangerously high rates? Only time will tell, but as of now, the increase in the US Dollar has a positive effect on the global economy, but at the same time it poses a rather negative effect on the home front.

 

Sony Cuts Semiconductor Spending Investments

It’s tough times over at Sony Corp. (NYSE: SNE) these days. From exploding batteries to the mediocre launch of its Playstation 3 videogame console, the venerable electronics and media giant has certainly seen better days.

Now the company is cutting resources at its semiconductor business, and considering whether or not to continue manufacturing its Cell chip used in the PS3 in-house.

The Tokyo, Japan-based company announced that its capital expenditures in its semiconductor business will be much less than the 460 billion yen ($3.79 billion) it spent over the last three fiscal years, according to Executive Deputy President Yutaka Nakagawa, who heads the company’s semiconductor and component device business.

Last month, Sony blamed the launching costs of its PlayStation 3 game console for much of the 5 percent drop in group net profit for the last three months of 2006 to 159.9 billion yen ($1.32 billion).

The company has been engaged in a massive turnaround effort since 2005, when Welsh-born American Howard Stringer took the chief executive job. Sony has dropped unprofitable businesses, sold off assets, cut jobs and closed plants.

Nakagawa also said that production of 45nm Cell processors – the main chip used in the PlayStation 3 – would probably begin at the end of fiscal year 2008 or the beginning of fiscal year 2009. Sony had yet to decide whether the 45nm chips will be manufactured by Sony itself or in cooperation with another company, he said. The processor is currently made using 90nm technology, and Nakagawa said the chips will soon be made with 60nm technology.

Components such as the Cell chip and a Blu-ray DVD player have driven up the PS3 price. Lower costs for the high-speed chip are expected to help the new game machine better compete with Nintendo’s Wii and Microsoft’s Xbox 360. However, finer circuitry also means heavier initial investments for chipmakers as costs for chip-making equipment balloon.

Among the possible businesses to which Sony may outsource the work are Taiwan Semiconductor Manufacturing Co. and United Microelectronics, which are the world’s largest and second-largest contract chipmakers, respectively.

“They are aggressively investing in cutting-edge technology,” Nakagawa said of the two companies. “Our basic understanding is that we probably won’t need to do everything by ourselves for next-generation chips.

“When we first offered the PS2, there were no semiconductor companies that were able to make chips for the machine, so we did it ourselves. But now, there are companies that specialize in (such) chip production.”

Despite the cuts, Sony expects revenue at its chip operations to grow 57 percent to $6.35 billion during the current business year that ends in March, accounting for 9.4 percent of its estimated group sales, although part of its chip sales are made through in-house transactions.

Sales have been driven by brisk demand for chips used in its game machines as well as in digital cameras, Nakagawa said.

Sony’s PS3 sales have so far paled in comparison with the rival Wii.

The Nintendo machine outsold the PS3 nearly three to one in Japan last month, according to videogame magazine publisher Enterbrain, which blamed PS3’s higher price tag and a shortage of game titles.

Don’t Throw Your Wine Investment Down the Drain: Store Your Wine the Right Way

Through the centuries wine has become more and more popular. Every year more and more money is going into investments and the consumption of wine. Many people are finding the history of wine to be very important in their purchasing strategies. But with their investment they want and need to know how to properly store and take care of their wine collection.

Many people ask about humidity, temperature, lighting, angle of the bottle, etc. This is very important information that people do need to know this. If you have a very nice bottle of Tokay Pinot, that runs around $170.00, then you don’t want it to taste like vinegar, do you. When you open a bottle of wine that has been stored properly, you definitely can tell the difference from a bottle of wine that hasn’t been stored the right way.

In order to store your wine the proper way, you do have to consider these important factors, humidity, temperature, lighting, and storage area cleanliness, and the angle of the bottle and any vibration of the bottle on the rack.

The most important is the temperature. Try to keep it around 50 degrees Fahrenheit at all times. The lower temperature helps age the wine at a low pace. If you do have fluctuations in the temperature, try to see that is happens very slowly. If the temperature does not go to high to fast then your wine should be okay.

The humidity level for storing wine should be around 70% but it’s okay to keep it 10% above or below the 70% range. The label could mold if the humidity is to high and this brings the wine’s value down. If the humidity is to low, around 50%, the cork will shrink and this lets air into the wine bottle, which ruins the wine in know time flat.

The angle of the wine bottle is very important, as the wine should stay in contact with the cork during its storage. This keeps the cork from drying out. If the wine doesn’t stay in contact with the cork, the cork will dry out and this will let air into the wine bottle. Light will also affect the wine. You should always keep wine out of light; light will ruin any type of wine. Light will cause the wine to age prematurely so it’s very important that you store your wine in a dark location.

Sediments can also damage your wine. Your storage area should be free of all vibrations. Vibration is not a good thing for wine; the sediments become disturbed and can ruin the wine to the point that it will taste horrible. You don’t want to have to pour out that $170.00 bottle of wine. So store your wine in a location that it won’t be disturbed so the sediments can settle.

Here are some storage ideas that you may consider for your wine.

Wine racks – they serve 3 purposes. 1. Storage. 2. Display. 3. Prevent corks from drying out.

Your main concern should be the display and humidity level; keep this in mind while your looking for that perfect place to put your wine rack. Wine racks come in many sizes and shapes and in wood, metal, iron etc. There are also tabletop wine racks if you are short on space.

Refrigerated wine storage rack – they control the temperature and humidity level very well.

If you are considering a refrigerated wine storage rack make sure you have decided where you want to put it. They come in all sizes from holding a few bottles of wine to many bottles of wine. Make sure you measure the area you would like to put a refrigerated wine storage rack before you make your purchase.

In protecting your investment of your wine, storage and care is the number one thing that is mandatory. Storing your wine in the proper location will bring you the best tasting wine that it was meant to be. Nothing is more important than opening that wine bottle that you have let age for several years, on that special occasion, only to find that it is nothing but vinegar.

Wine isn’t hard to care for or store, just remember these factors and enjoy.