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["Don Bowen" <don.bowen AT earthlink.net>]

The Yen is falling against the dollar.  Today (Friday 10/240 it is trading
around 92.6 to the dollar.  In recent months it was over 115.  The Euro is
just over 1.26 to the dollar, well down from its very recent high of 1.57.

What this mostly means is that the rest of the world is falling off a cliff
and those with money are diving to what is considered as a safe haven.  Even
US treasuries that have recently traded with an effective interest of zero
are considered safer than the stock market.

What does this mean to us?  For one thing some foreign goods will be
cheaper.  You will save a little on that new BMW or Lexus.  It does affect
the world price of oil, as it plunges below $65 USD the fall of other
currencies means they do not get as deep a price decrease as we do.

China and other Asian countries pegs their currency closely to the dollar so
those goods will not decline in price as they track the dollar.  It also
means they will not increase in price.  As worldwide demand for oil is
decreasing so will the price which keeps shipping low.  Low cost Asian goods
will still compete and hinder any real attempt at reindustrialization.

OPEC is trying to prop up oil prices by today's announces 1.5 million
BBL/day production cut.  That will have little affect in prices as it only
applies to about 40% of worldwide production of 85 MBBL/day or about 1.7% of
the total.  Prices will still decline as consumption continues to climb.
This may lead to further destabilization of oil producing countries.

As for car loans and credit card applications, credit rating requirements
have significantly tightened.  Those 0% loans require very good credit and
are offered because auto sales are way down.  Toyota announced its first
fall back in production.  

Credit card delinquencies have significantly increased as have balances.
Card companies are still trolling for new customers but are looking for only
the best.  Things may look good with a mailbox full of applications but
final approval is getting much more difficult.  Some feel that the next wave
of failures (and possible bail out) may come in the credit card industry.

Food prices soared as commodity prices soared this last spring but those
process have rolled back.  Corn, wheat, and soybeans are as much as 50%
below their earlier peaks.  Stores such as WalMart are starting xmas
discounting early and not stocking up as much as in past years nor are they
planning for nearly as much holiday employment. 

Don Bowen  KI6DIU
http://www.braingarage.com/Dons/Travels/journal/Journal.html