Economic inconsistency-which theory can prove this?

This topic is devoted to the USD. What is happening now, good economic data or bad, tend to drive the USD down.

What is happening now? Well, everyone in the market is selling USD, which of course, is driving the USD down. the Yen has risen to its highest level against the US since 1995. The AUstralian Dollar has reached parity with the USD, and this trend is looking to continue.

One reason for this is that people are speculating on the Fed's QE (Quantitative Easing) policy. This means the Fed is looking to buy bonds, and injecting liquidity (more USD) into the markets, hence, the larger the supply the lesser the value of the USD compared to other currencies and commodities.

Right now the actual amount that is to be injected is not certain depending on the strength of the US economy. However, what ever happens is pointing to a weaker USD. Now what do I mean by that.

Well historically, recessions, weak economic periods seem to be negatively correlated to the USD. When economies are fragile, people tend to seek safety, and that's in the USD. So any signs of bad economic situations translate to stonger US Dollar. HOwever, this is not the case anymore. The weaker the US economy, the higher the amount QE the Fed has to inject into the economy, meaning weaker dollar. If, on the other hand, the US economy improves, then there is a lower chance of the Fed actually introducing QE2, which in turn, means that it would support the strength of the USD. Really? Not at this situation. Better economic reading also means that people will turn into risky assets such as other currencies, commodities, and equities. SO if economic reading is better than expected, the USD is likely to fall even further as people tend to move to higher yield assets.

SO What is the direction of the USD, when bad economic data means more USD to be injected into the economy, and good economic data mean people are more willing to riskier assets? This question will remain a strong debate until we see the result in November. Until then, please share your thoughts and what direction the US dollar is likely to move.

Marketing, an Expense or Investment?

Many of us might wonder whether to put marketing cost on the expense side of the balance sheet or in the investment side of the cash flow statement. Many of us would also wonder why do we need to do marketing, why we need to promote our products and services or  pay for advertisement? Why not just hire those who have financial or accounting skills only?

Well to my understanding, marketing is the only thing you need when you want people to know that your product exist in the market. I mean, ask yourselves, what is the purpose of your business? Definitely, your business exist to serve people and solve their problems. A hotel online booking is to solve problems with having to drive around town and find out that all hotels in that city are all full. So why do you have to market your product?

http://reodispenser.com/Marketing%20Expertise/pic_int_marketing.jpg

Well, when you set up your company or introduce a new product, how would you expect the customers or potential buyers to learn about your product? Marketing! Even you have the greatest product this world has even needed, without going out there and telling people that 'this product is the best and it is here for all you people, then your product is worthless. It's not only about trying to get people's attention that you are looking for in a business. What you have to realize is that you have to TELL THE RIGHT PEOPLE about your product. You would not expect to be selling your cool newly designed car to a 10-year-old nor you would want to promote your internet business to those who has no access to the internet.

My point is that not only marketing is essential to your business, you got to target the right people. I've heard so many people say 'don't study marketing, it won't make you more money than finance or accounting'. Well! here's where I can safely say, think again! So there you go, whenever you think you have a product, never think marketing will add to your expense, its an investment just like how you invested in the product. You invest your time and money to come up with this product, and you invest your time and money to get product to the market. So don't sit back and think someone is going to come and buy your product because you think it is useful and valuable, they won't know unless you tell them, and you can do that by MARKETING YOUR PRODUCT.