Sunday, October 10, 2010

Exchange Rate Blues

With the Dollar/Yen exchange rate hitting record lows as many first world currencies circle the drain, Steven Den Beste gripes that the new ¥8880 Asobi ni Iku Yo BD's that he ordered directly from Japan are costing him in excess of $100 each.

Hey, welcome to our world. It's not like there are enough problems in the industry right now, but the exchange rate is making us really take a look at the viability of the whole import business. Any Anime products that we offer for sale that are actually produced in Japan and not under license here (where the manufacture can be exported to Mexico (DVD's) or China (Character Merchandise) or Canada (Manga)) is getting priced right out of the North America market. Character figures (PVC's) are now averaging around $110-$120 (at least if we want to make any profit on them), and will be higher than that by next spring once our fall commitments are delivered. Typical Japanese music CD's now have to be sold for $45-$50. I'm still wavering on our offering 2011 Japanese calendars this year, even though I only have a few days to make up my mind. I just don't know if there will be much market for calendars we will have to sell for $30-$40 each. We probably will, but will just offer fewer choices this year.

Anyway, I digress. Since Steven is an engineer, and engineers (being practical thinkers that see the world in terms of what works and what doesn't) have a hard time getting their heads around irrational concepts like Socioeconomics, I have a macro economic thought for him that ties into his recent micro economic observations:

"There is no subtler, or surer means of overturning the existing basis of society than to debase the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which only one man in a million is able to diagnose."

-John Maynard Keynes

Don't forget folks, we're closed tomorrow for Columbus Day, so I won't be answering any e-mails until we come back. See you all Tuesday!

UPDATE: I'm of the FA Hayek school myself, but Keynes was certainly right about this.

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