Metropolis Opinion

Chairman of GAPPINDO said that import tariff from shrimp (lobster) item to Japan is ZERO, decline from 1 percent. The free tariff is realized based from the deal between Indonesia and Japan. Indonesian exporters are happy now because free tariff increase their profit and this zero tariff indicates that international trade between ASEAN and outside countries has been realized.

Our shrimp is Zero percent but a problem isn’t clear. Shrimp from Indonesia must wait for 3 days for checking (about the international standard, free from virus, bacteria and other point). This case isn’t happened to Thailand Shrimp. Thailand Shrimp doesn’t waiting for 3 days because they get privilege access; their shrimp is directly entered without procedurals checking as happened on Indonesian Shrimp. Full Article »

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I was a stupid speculator. Stupid Speculation means I can’t do accurate analysis, perhaps the graph shows the trend and I follow it. I just want to find junk dollar from the surplus on big investors. When the trend shows down, I followed it. It’s hard to sharp your analysis because you are just only a micro speculation.

Learn, how much money Investor got when they won?

Here is a simple illustration. I take the picture from my virtual live desk on Marketiva.

I like GBP/JPY because the fluctuating is higher than others. So I can save my time. Profit or Loss! Just that, other currencies like EURO/Dollar is slow moving fluctuating.

I bit GBP/JPY at 204.16 levels in March 13th with $ 10 USD. Each point I get $0.10 USD. You can see if a speculator bids around $ 100 USD, She/he get $1.00 USD. In many cases, if huge speculator bid around $100.000 USD, he get $1.000 USD in every point.

How do Japanese do when Surplus Condition on International Trade

To continue my previous post ‘Floating Exchange Rate, Currency up and down, let us see how Japanese do to stabilize their money supply when surplus on international trade?

When surplus happened, that money didn’t entered to Japan, but let it outside as (foreign exchange) devise.  So what they do with their surplus?

Have you ever heard that Japanese become prime lender? Japan replaces the surplus to foreign investment, donor to poor countries, Move to World Bank, IMF as creditor country. Yeah! They do that. So we don’t confuse if Japan becomes donor country.

They invest their money in many countries; China, Indonesia, Thailand, and ASEAN, direct invest in America (Honda case) and many others countries.

Those tools are taken to stabilize their internal money supply. Outspoken said that Japanese Interest Rate is lower and lower (once a time lower in minus interest rate).

By the way, the surplus condition was used as loan to investor because of lower interest (and also relative triangle exchange rate and future market). Much money is loaned to investors. So we can see the impact. In January when Hot money (loaned from Japan) comes to Indonesia, analysis said that Indonesia begun instability because there was much money, hot money attack stock market, foreign exchange, short run investment on Rupiah. Hot money also attack English Pond sterling, Euro, USD and more currencies. Investors did in short run to profit taking action.

An economic theory; why currencies up and down

Before I go on, let make sense with an assumption, the currency must floating exchange rate (no official exchange rate) so a simple illustration will works well.

Imagine there are two currencies, Yen Japan and Dollar (USD). Another assumption is no speculation motive.

For example, when Japan have surplus on trade against America, Yen will appreciate because they hold more Dollar. So more dollar in Japan implicate more money supply otherwise American lost their Dollar, so we can say less dollar in America–money supply will decrease. Dollar begins cheaper on Japanese.

Economics thought that increasing in money supply will causes inflation, and America begins deflation. Another theory said that when Dollar in America less, mean they have ability to buy down. In international trade, when Japan won against America, Japan goods couldn’t brought by American because they have no money, otherwise Japanese have more ability to buy.

The simple impact is Japan reduces their surplus against America. Many tools taken by Japan, the one is buying American goods (American has no ability to buy, so the producer put the price down). While Japan buys more American products than American, international trade shows that American get surplus. The process still continues as long as international trade is.

That is a simple illustration, but the reality shows different. Let us see Japan does when surplus condition. In next news and opinion, I will tell about the reality. Why the economic theory doesn’t work on this case.

Actually the illustration is not an illustration, more over in reality Japan does. So how does Japanese do with their surplus (inflation maker) in order to stabilization their inflation and their exchange rate?

read related posted, Psychology of $$$ USD on Jacky’s Opinion