Got this news from Boing Boing a couple of days ago about this documentary on the collapse of the US Dollar.  According to the documentary, the collapse was a matter of ‘when’ and not a matter of ‘if’.  The documentary claim that when this happens, Asia will have a better living standard and the US’s living standard will be come like what Asia is now. Hooray, this means the Macbook will be cheaper. Currently the currency exchange for USD to Ringgit is 3.19 (today), and if the USD collapse, and lets say at par with Ringgit, then the $1099 macbook will be RM1099 (before tax). A 2/3 drop in price. This is only the Macbook, the PC will be even more affordable. This will dramatically improve the living standard of Malaysians. That was the good part, now what’s the bad part? America is the largest consumer in the world.

When the currency crash, goes into a recession and consume at a fraction of what they are today, what will happen? For one, companies with huge product inventories will be impacted. On the long term, when the consumption reduces, the need to built more also diminishes. Big Companies like Apple might not be impacted as the can continue to sustain current sales, not from US, but from the rest of the world, particularly in Asia. My friend from China used to buy Apple products in Malaysia because it was cheaper here, and now since the currency have collapse, China and the rest of Asia will see a dramatic drop in price (converted to local currency) and suddenly everyone can afford an ipod and Macbook. So, Asia will take over the consumption that the US used to have (after the currency collapse that is). Smaller companies that make entry level MP3 players that earn by selling in volume, will see a dramatic setback. Since the ipod is already affordable, who wants to buy a nobrand pod? Maybe some small companies will disappear, if they don’t re-invent themselves.

This is all good, now what is the bad? The bad news is that Asia and the rest of the world might not be able to take over all the consumption that US is doing now, and this will lead to a much smaller demand. This means, all those companies that built up manufacturing houses in developing countries, such as Asia, might close down. Asia might become too expensive as well, since the increment of standard of living and also the consumption level. This is what makes factories move out of US the first place. This means for Penang, which economy hugely dependent on American, Japanese and European factories, might see a decline, and unemployment rate in this sector will shoot up.

In summary, it may be good that the price of Macbook drops, but I may not be able to afford it also, as I might be out of job. Check out the documentary below.

On this day..

• UK Mortgage Interest Rate Freeze - 2008