Slashdot Mirror
Weak US Dollar Means Nintendo Favors Europe For Now
timeOday writes "The LA Times is reporting that the new Nintendo Wii Fit is hard to find on US shelves, due not only to strong demand but also the United States' declining status in the world economy: '"[Nintendo] is also is shrewdly maximizing its profit by sending four times as many units to Europe, reaping the benefits of the strong euro," says Michael Pachter, an analyst with Wedbush Morgan Securities. "The shortage demonstrates one consequence of the weak dollar. We're seeing companies ignore their largest market simply because they can make a greater profit elsewhere."'"
Turns out Europe overtook the US gaming market for FY2007.
I hate hearing the whining of the article repeated elsewhere: "We're seeing companies ignore their largest market simply because they can make a greater profit elsewhere." That link I just posted says Japan is #1 in sales at $11.5 B USD, Europe is #2 at $11.4 B USD and US only pulled in $10.7 B USD. So companies aren't ignoring their largest market; they're giving the leftovers to the third largest market. Deal.
I wonder if this has anything to do with Bush running up trillions in debt and making everyone hate us?
Well look at it this way.
The government is the only entity that can effectively control the amount of currency in circulation. It is the only entity that can create and destroy money by fiat; it can print currency, it can create funds to lend to central banks, and it can destroy the money it created.
The government takes money from you every year in April. Someone has to repair roads, pick up garbage, provide for the common defense etc. Asphalt, garbage trucks, and missiles cost money. The government prints this money and spends it. It's all OK because it picks your pocket, pulls out dollars, and destroys them to account for it. And you shouldn't complain because you get to drive on nice roads with no garbage or foreigners.
What if they didn't take your money? That's what George W. Bush did. He figured you'd like him more if we skipped the part where the money comes out of your pocket and gets burned up in order to close the books on the services you receive from the government. So the money escaped your pocket (or at least your $300 consolation prize did), and suddenly all this money that had been spent paving the roads and collecting garbage was suddenly appearing at Wal*Mart for its second life, and it got spent a second time to buy more garbage, predominantly imported crap from overseas. Basically the government printed crap dollars, we spent them on imports, giving sellers overseas dollars that they promptly exchange for their own currencies. The currency exchange markets are quickly overwhelmed by dollars. These quickly end up parked in immense T-Bills held by foreign banks, who would like to unload them but cannot risk damaging their value by flooding the dollar markets with their own holdings. But the value of the dollar is deteriorating anyway, much to everyone's dismay- because dollars are the most widely held currency in the world. And we owe them to everybody. You see how awkward this is.
Let's say now you're sitting on a loading dock with 500 Nintendos on pallets. Do you want to turn them into dollars? Heh heh heh heh heh.
But the invisible hand has a way to correct everything. Maybe someday we can make our own Nintendos.