Major currencies from around the world fluctuated like no other as Donald Trump was elected the new president of the United States. Some fluctuated in a positive manor while others created a negative situation.
The Mexican peso's value decreased almost eight percent when the news broke. This decrease was caused by Trump's plans for Mexico, such as eliminating NAFTA and lowering corporate taxes to bring jobs back to America. This would decrease their value because without NAFTA, Mexico will start having to pay the United States much more in tariffs and fees while losing jobs to the United States would hurt the economy.
Russia's ruble was on the other side of the spectrum, increasing 0.4%, not much but enough to make a significant impact. Russia saw this because Trump has promised to improve ties with Russia and to become much tougher on China and Japan, two of Russia's key competitors. Better relations with Russia would lead to the flow of more goods and services while cracking down on China and Japan would limit their production, only to help increase Russia's production.
My overall view on Trump winning the elections and the world's economy is positive. I truly believe Trump will set laws and policies that will only encourage businesses to thrive, such as lowering the corporate tax rate. His policies will also help the US economy because his plans of going after China and Japan will make them pair their fair share instead of letting them take advantage of us like previous presidents.
Mozee, C (2016, November 9). Dollar gain in postelection trading, peso hits record low. Market Watch.
Retrieved from http://www.marketwatch.com/story/dollar-mexican-peso-drop-as-trump-
secures-us-presidency-2016-11-09
Thursday, November 10, 2016
Thursday, November 3, 2016
Pakistan is on the Rise, Somewhat
Renault, a French auto manufacturer, recently announced that they would be investing in a new manufacturing plant located in Pakistan. This comes shortly after Pakistan's Finance Minister Ishaq Dar traveled to France to meet with Renault executives, promising that investments within Pakistan would lead to a strong decrease on import duties, making the whole process much cheaper for Renault (Reuters, 2016).
Pakistan is also currently in talks with many other nations and auto companies, such as Nissan, Fiat and Volkswagen, about investing in Pakistan, but many investors believe the risks within Pakistan are way too high. Two key problems include a very unstable government and a constant threat from radical groups such as the Taliban (Reuters, 2016).
The presence of Taliban in Pakistan is one main reason why the Pakistani economy is behind today, simply because people are scared to be there. This really is too bad because Pakistan has a market of around 200 million people, but the majority of these people are being blocked from the world market because of the Taliban. The Taliban must be whipped out to save lives, but also to allow Pakistan's huge economy reach its potential. Once this market is finally opened to our world, the number of jobs that will be created will be endless.
Reuters (2016). Pakistan says renault agrees to invest in local car plant. The Economic Times.
Retrieved from: http://economictimes.indiatimes.com/news/international/business/pakistan-says- renault-agrees-to-invest-in-local-car- plant/articleshow/55230894.cms
Pakistan is also currently in talks with many other nations and auto companies, such as Nissan, Fiat and Volkswagen, about investing in Pakistan, but many investors believe the risks within Pakistan are way too high. Two key problems include a very unstable government and a constant threat from radical groups such as the Taliban (Reuters, 2016).
The presence of Taliban in Pakistan is one main reason why the Pakistani economy is behind today, simply because people are scared to be there. This really is too bad because Pakistan has a market of around 200 million people, but the majority of these people are being blocked from the world market because of the Taliban. The Taliban must be whipped out to save lives, but also to allow Pakistan's huge economy reach its potential. Once this market is finally opened to our world, the number of jobs that will be created will be endless.
Reuters (2016). Pakistan says renault agrees to invest in local car plant. The Economic Times.
Retrieved from: http://economictimes.indiatimes.com/news/international/business/pakistan-says- renault-agrees-to-invest-in-local-car- plant/articleshow/55230894.cms
Thursday, October 27, 2016
An International Pilot Shortage
I would like to discuss a topic mentioned by Mary, a fellow student, in one of her blogs. With our world becoming more and more globalized, the demand for air travel is increasing at its highest rate ever. This demand is creating jobs, but so many that the current supply of pilots isn't nearly enough.
According to Mary's post, by 2026 there will be a pilot shortage of 15,000, and according to a CNN post, 609,000 more aircraft maintenance workers and 38,000 new airliners will be needed by 2034 in order to meet our growing demand for air travel (Harrison, 2015). Many say the lifestyles of pilots must improve to help improve this pilot shortage.
I grew up my whole life surrounded by aviation. My grandfather was a pilot and had several airplanes while I was growing up. Since the age of 14, I have been flying, receiving my pilots license at 17. While I once thought being a commercial pilot was my future career, other pilots I know soon talked me out of it, claiming the pay is nothing compared to the lifestyle you live. That was six years ago.
Like Mary stated, airlines are creating more benefits, increasing pay and helping pilots maintain their license much more easily in order to help ease this shortage. This is becoming a very common trend in the aviation work place. A friend of mine flies regional for Delta and he claims his salary has already doubled after flying for only two years. With these changes, more people are finally wanting to get into flying. Had these changes came six years ago, I could have been sitting in flight school instead of struggling through finance courses.
Harrison, Virginia ( July 2015). The world needs more pilots: 28,000 new jobs a year. CNN Money.
Retrieved from: http://money.cnn.com/2015/07/21/news/companies/boeing-pilots-demand/
According to Mary's post, by 2026 there will be a pilot shortage of 15,000, and according to a CNN post, 609,000 more aircraft maintenance workers and 38,000 new airliners will be needed by 2034 in order to meet our growing demand for air travel (Harrison, 2015). Many say the lifestyles of pilots must improve to help improve this pilot shortage.
I grew up my whole life surrounded by aviation. My grandfather was a pilot and had several airplanes while I was growing up. Since the age of 14, I have been flying, receiving my pilots license at 17. While I once thought being a commercial pilot was my future career, other pilots I know soon talked me out of it, claiming the pay is nothing compared to the lifestyle you live. That was six years ago.
Like Mary stated, airlines are creating more benefits, increasing pay and helping pilots maintain their license much more easily in order to help ease this shortage. This is becoming a very common trend in the aviation work place. A friend of mine flies regional for Delta and he claims his salary has already doubled after flying for only two years. With these changes, more people are finally wanting to get into flying. Had these changes came six years ago, I could have been sitting in flight school instead of struggling through finance courses.
Harrison, Virginia ( July 2015). The world needs more pilots: 28,000 new jobs a year. CNN Money.
Retrieved from: http://money.cnn.com/2015/07/21/news/companies/boeing-pilots-demand/
Thursday, October 20, 2016
Volkswagen Investors Want Their Money Back
Over the last year, Volkswagen stock prices have plummeted due to the company's recent emissions scandal. Volkswagen has been fined billions of dollars for using softwares in their cars that do properly control the emissions being released by the car, leading to many cars emitting higher emissions than what is allowed by most laws (Reuters, 2016). It is believed that over 11 million vehicles have been affected by this insufficient software (Reuters, 2016).
Investors who played no part in this fraud are furious and are demanding back the money they lost. On September 18 alone, 750 lawsuits were filed in the courts in Braunshcweig, just outside of Volkswagens Wolfsburg headquarters, with over a thousand more being filed in the days after (Reuters, 2016). So far damage claims have reached $8.2 billion from investors with that number expected to climb even higher (Reuters, 2016).
As of right now, Volkswagen has set aside $18 billion in order to pay off fines and to retro fit the cars they failed to test correctly (Reuters, 2016). Many businessmen believe that this amount will not be enough to do the job, which could lead to even lower stock prices for Volkswagen.
Reuters in Berlin (2016). VW investors seek €8.2bn in damages over emissions scandal. The
Guardian. Retrieved from https://www.theguardian.com/business/2016/sep/21/vw-volkswagen-investors-
damages-emissions-scandal-germany
Investors who played no part in this fraud are furious and are demanding back the money they lost. On September 18 alone, 750 lawsuits were filed in the courts in Braunshcweig, just outside of Volkswagens Wolfsburg headquarters, with over a thousand more being filed in the days after (Reuters, 2016). So far damage claims have reached $8.2 billion from investors with that number expected to climb even higher (Reuters, 2016).
As of right now, Volkswagen has set aside $18 billion in order to pay off fines and to retro fit the cars they failed to test correctly (Reuters, 2016). Many businessmen believe that this amount will not be enough to do the job, which could lead to even lower stock prices for Volkswagen.
Reuters in Berlin (2016). VW investors seek €8.2bn in damages over emissions scandal. The
Guardian. Retrieved from https://www.theguardian.com/business/2016/sep/21/vw-volkswagen-investors-
damages-emissions-scandal-germany
Friday, October 14, 2016
America is Losing More Jobs
Once again, America is losing jobs to a foreign competitor. Ford recently announced that all small automobile production, such as the Ford Focus, would be moved to Mexico in years come with an initial investment by Ford of over $1.6 million (Cook, 2016). The Mexican auto industry is only growing while the U.S. auto industry is only shrinking. Why is this?
The answer is simple, American corporate taxes are way to high. At 35%, they are currently the highest in the world, causing most production and low-skilled jobs to leave the U.S. Ford claims that the U.S. is not actually losing jobs due to this move because people that were working on the small automobiles will not be working on SUV and trucks (Cook, 2016). It may be great that no jobs are actually being lost, but the fact that we are losing jobs opportunities to Mexico is wrong, especially since Ford is an American company.
Although I do not agree with Donald Trump on many issues, when it comes to helping with jobs and incentives for corporations to do work here, he is the obvious candidate that would be best for the job market. Hillary Clinton wants to drive up corporate taxes, but why on earth would you do that if corporations are already leaving because they are too high? All in all, less government in the economy is better. High taxes don't drive economies, they limit the economy's capability.
The answer is simple, American corporate taxes are way to high. At 35%, they are currently the highest in the world, causing most production and low-skilled jobs to leave the U.S. Ford claims that the U.S. is not actually losing jobs due to this move because people that were working on the small automobiles will not be working on SUV and trucks (Cook, 2016). It may be great that no jobs are actually being lost, but the fact that we are losing jobs opportunities to Mexico is wrong, especially since Ford is an American company.
Although I do not agree with Donald Trump on many issues, when it comes to helping with jobs and incentives for corporations to do work here, he is the obvious candidate that would be best for the job market. Hillary Clinton wants to drive up corporate taxes, but why on earth would you do that if corporations are already leaving because they are too high? All in all, less government in the economy is better. High taxes don't drive economies, they limit the economy's capability.
Cook, Rebecca (2016, September 15). Ford to move all small-car production to mexico from us: ceo. CNBC. Retrieved from http://www.cnbc.com/2016/09/15/ford-to-move-all-small-car-production-to-mexico-from-us-ceo.html
Friday, October 7, 2016
Ethiopia's First Electric Railway
Ethiopia, I landlocked country in Western Africa, now has a new and efficient railway from Addis Ababa, the capitol, to the nearest port, Djibouti, thanks to Chinese investors. Over 70% of the project was funded directly by the Chinese (The Guardian, 2016), so why were they so willing to help with a railway thousands of miles away?
China currently sees Ethiopia as a growing country, in both market size and technology, that has a high demand for Chinese products while some Ethiopian products are in high demand within China. Since Ethiopia is landlocked, before this railway, about 1,500 trucks carrying 90% of Ethiopia's exports and imports traveled a deteriorating highway from Addis Ababa to Djibouti, taking upwards of two days (The Guardian, 2016).
With the new electric railway, this trip now only takes 10 hours while increasing the amount of goods that can be shipped between the two points daily (The Guardian, 2016). The result of this will simply be the increase in trade between China and Ethiopia. Ethiopia isn't the only country China has invested in lately, with plans for a Chinese railway across Brazil and Bolivia currently in the works. I believe we will continue to this this trend by China, with other countries starting to do the same in order to keep up and compete with China's massive economy.
The Guardian (2016, October 5). Next stop the red Sea: Ethiopia opens chinese-built railway to
djibouti. Retrieved from https://www.theguardian.com/world/2016/oct/06/next-stop-the-red-sea-
ethiopia-opens-chinese-built-railway-to-djibouti.
China currently sees Ethiopia as a growing country, in both market size and technology, that has a high demand for Chinese products while some Ethiopian products are in high demand within China. Since Ethiopia is landlocked, before this railway, about 1,500 trucks carrying 90% of Ethiopia's exports and imports traveled a deteriorating highway from Addis Ababa to Djibouti, taking upwards of two days (The Guardian, 2016).
With the new electric railway, this trip now only takes 10 hours while increasing the amount of goods that can be shipped between the two points daily (The Guardian, 2016). The result of this will simply be the increase in trade between China and Ethiopia. Ethiopia isn't the only country China has invested in lately, with plans for a Chinese railway across Brazil and Bolivia currently in the works. I believe we will continue to this this trend by China, with other countries starting to do the same in order to keep up and compete with China's massive economy.
The Guardian (2016, October 5). Next stop the red Sea: Ethiopia opens chinese-built railway to
djibouti. Retrieved from https://www.theguardian.com/world/2016/oct/06/next-stop-the-red-sea-
ethiopia-opens-chinese-built-railway-to-djibouti.
Friday, September 30, 2016
A Beer Dynasty
The world's largest brewing company, Anheuser-Busch Inbev, is only getting bigger. Shareholders this week approved a $100 billion dollar deal that would allow AB Inbev to take total control of the world's second largest brewing company, SAB Miller (Bray, 2016).
This acquisition would mean that AB Inbev would be accountable for brewing just over one out of every four beers consumed throughout our world and would generate upwards of $55 billion in revenue per year (Bray, 2016).
The biggest advantage for AB Inbev in this deal is the new market opportunities in Africa and Latin America, where SAB Miller has many regional breweries in countries like Botswana, Peru and Ecuador (Bray, 2016). This is huge for AB Inbev because these smaller countries already have their "official" regional beers that the locals strictly only drink. Entering these markets with no real connection to the people and region would lead to complete failure.
I personally think it is awful that these brewing giants are coming together to form one giant company.With so much of the world's beer market being dominated by a single company, this takes away so much competition. This will lead to higher beer prices and a decrease in the need to do much better in order to beat the competitor. I am afraid that one day, the beer market will be a total monopoly that provides average beer and high costs. Competition is a necessity for a well-functioning market.
Bray, Chad (2016, September). Shareholders approve sabmiller takeover by anheuser-busch inbev. International New York
Times. Retrieved from http://www.nytimes.com/2016/09/29/business/dealbook/sabmiller-anheuser-busch-inbev-beer-
merger.html?ref=international.
This acquisition would mean that AB Inbev would be accountable for brewing just over one out of every four beers consumed throughout our world and would generate upwards of $55 billion in revenue per year (Bray, 2016).
The biggest advantage for AB Inbev in this deal is the new market opportunities in Africa and Latin America, where SAB Miller has many regional breweries in countries like Botswana, Peru and Ecuador (Bray, 2016). This is huge for AB Inbev because these smaller countries already have their "official" regional beers that the locals strictly only drink. Entering these markets with no real connection to the people and region would lead to complete failure.
I personally think it is awful that these brewing giants are coming together to form one giant company.With so much of the world's beer market being dominated by a single company, this takes away so much competition. This will lead to higher beer prices and a decrease in the need to do much better in order to beat the competitor. I am afraid that one day, the beer market will be a total monopoly that provides average beer and high costs. Competition is a necessity for a well-functioning market.
Bray, Chad (2016, September). Shareholders approve sabmiller takeover by anheuser-busch inbev. International New York
Times. Retrieved from http://www.nytimes.com/2016/09/29/business/dealbook/sabmiller-anheuser-busch-inbev-beer-
merger.html?ref=international.
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