Print 11 comment(s) - last by Mint.. on Jun 4 at 12:11 PM

Weakening yen means price increases in Japan

Apple has become latest major electronics manufacturer to increase the price of its hardware within Japan. Apple and other manufacturers have increased prices due to an increasingly weak yen.

Reuters reports that the Japanese yen has fallen more than 20% against the U.S. dollar since the middle of November. Increasing prices are reportedly rare in Japan where low-grade deflation has occurred over the past 15 years.

Apple has reportedly increased the price of some of the iPad models by up to 13,000 yen, which is equivalent to $130 in local Japanese stores.

The price increase means that the 64 GB iPad now costs ¥69,800 in Japan, an increase from ¥58,800 earlier this week. The 128 GB iPad now has a retail price of ¥79,800 compared to its previous price of ¥66,800.
Prices of the iPod music player has also increased by as much as ¥6000 while pricing for the iPad mini went up by ¥8000.

Source: Reuters

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RE: Weak yen
By Mint on 6/1/2013 12:51:37 PM , Rating: 2
If you look at the governments that have been having the most problems - Japan, Greece, Italy, Portugul, Iceland - it's a good counterargument to those who say it's ok to continue racking debt up and up.
First of all, Iceland is a useless data point extremely exposed to the financial sector. I could draw a border around 300k people in many different countries, and I'd create places doing far worse or far better.

More importantly, Greece, Italy, and Portugal don't have their own currency, and can't adjust prices nearly as fast as, for example, Canada can in its trade with the US. They thus have to rely on deflation to perform the equivalent of currency devaluation, which is painful, uneven, and also increases the real value of debt.

If you don't have your own currency, debt can make a bad economy worse. But more importantly, it's not the debt itself that has hurt these economies:
It's been flawed from the beginning to think this way, and now the very data used to justify austerity has been shown to do the opposite.

Anyway, the Euro was simply a bad idea. The US gets away with a unified currency between states because there is massive redistribution between states (some states get twice as much in federal services/spending than they pay in taxes, and others are almost the opposite) along with freedom of labor. EU member states have an order of magnitude less redistribution, no unified language, less labor movement, etc. Without the stabilizing effect of local currencies, it was a disaster waiting to happen.

What I find hilarious is how Spain and Portugal were conservatives' biggest data points in favor of low income taxes:
Funny how that worked out, isn't it.

Japan had been the exception since they've been at over 200% debt levels for over a decade (maybe two). People had been pointing to them as proof that such high debt levels weren't necessarily fatal. But that overlooks the fact that their economy has been pretty much stagnant for two decades.
Japan stagnated before they had a big public debt. It's exceedingly clear that the slowdown is what caused it.

Yes, their debt DID show that there's no apocalypse coming with high debt. There is no 90% or 100% threshold. It's all FUD.

What Japan showed is that deflation is a bad thing. If your savings grow in real value despite getting 0% interest when nobody wants to borrow your money, then you have little incentive to help an economy recover with spending or investment.

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