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Wednesday, October 29, 2008

Dollar anyone?

You know it´s gotta be bad when not even Mexicans want to be paid in dollars, and Brazil and Argentina turn their back on the greenback, when trading among themselves.

But what gives? I have been reading that economies will be going to the dollar.

Well, in the case of Argentina and Brazil, the move is supposed to save money for small and medium sized businesses by lowering the costs involved in changing from one currency to another. I don´t know much about Mexico´s state right now to talk about them... anyone?

But a decrease in demand, and therefore a decrease in commerce all around, would seem to give Brazil and Argentina reason enough to give us little guys a hand this way.

The consensus seems to be that we are heading into a currency crisis.

So what does that mean for us in this part of the world? Well, I have been approached by some of our big clients and have been told in no uncertain terms that we have to lower our prices.

Hmmm, does this sound like deflation?

The only trouble is that I have yet seen a decrease in my own costs. This might be something that will be coming down the line for me. I mean, I have some clients who are gigantic, compared to me, and they feel the ripples way before I do. In some cases, these giants do not even bother to pass on the savings to their own customers. But lucky for me, I do not deal with that company.

So while Don Corleone was pitching me a deal I could not refuse, I was wondering if maybe he could pay me in dollars, or would that question buy me a fishing trip to Lake Tahoe?

Meanwhile you can check out a fantastic site focused on explaining the Monumental Clusterfuck of a Financial Mess my beloved USA has gotten us all into.

Financial Crisis for Beginners
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