Day of the dollar: A global connection
The weak U.S. currency is changing the lives of billions. Some are getting richer, some are barely making it. From a fish market in Tokyo to a sushi restaurant in Los Angeles, a look at why the greenback matters.
Wholesalers inspect frozen tuna at the early-morning auction at the Tsukiji fish market in Tokyo, where prices are set while much of the world sleeps. The weaker dollar encourages New England fishermen to sell stocks of coveted Atlantic tuna in Japan, where they receive the more valuable yen.
Thwacks and clatter echo through the 5:30 a.m. auction on the Tokyo waterfront; it is the moment when the tuna harvest meets the calculations of international financial markets. Much of the world sleeps when prices are set on a fish that has become as precious to the sushi business as gasoline is to drivers.
The men cutting fins and tails are connected to something every bit as tumultuous as the seas: the U.S. dollar. The greenback was a reliable icon for decades, but its dramatic decline over the last five years is creating a world of winners and losers in the callous math of commerce, where the cost of a fish dangling from a hook in Asia is one man's profit and another's misfortune.
The dollar's fate affects the lives of billions of people -- wheat farmers, black-market money-changers, writers and poor women bargaining for tiny white eggplants in musty souks. Beginning before dawn in Tokyo on Monday, The Times followed the dollar around the globe until the sun set in North Hollywood.
The low dollar keeps Japanese seafood buyers happy. It encourages New England fishermen to sell stocks of coveted Atlantic bluefin tuna in Japan, where they can be paid in more valuable yen. This is spurring Kazuaki Shimura, a deputy general manager for Daito Gyorui, one of Tsukiji's powerful trading houses, to take advantage of the U.S. currency to offset high oil prices and shrinking fish stocks. His company will send buyers to Boston this year to guarantee the inventory.
"If the Americans get a good catch, we'll go in August," he says, leaning back in his chair as company accountants tally the day's take. "We have to seize the opportunity while the dollar is still down."
Similar strategies are devised countless times a day. Scribbled into ledgers, typed into computers, flashed onto tote boards, the dollar's travails are an enduring, unpredictable narrative. Some curse the U.S. currency, others revel in the rewards its shrinking stature offers, yet they are all connected to the world's most recognizable symbol: George Washington's face on a swatch of green.
In a region of china that manufactures Christmas for much of the world, Du Xiufeng is not a jolly man. He once made $62,000 selling 120,000 snowman stockings to Wal-Mart. Much has changed in the two years since, and Du, who speaks through clenched teeth and has become as thin as his wallet, can't even turn a penny profit on such orders anymore.
The dollar has fallen so fast against the yuan in recent months that Du winces at the currency rate updates arriving on his cellphone. Last October, he won an order to make 150,000 travel blankets for Target. Du calculated that after production costs he'd a earn nickel profit on each. But the adjusted exchange rate wiped out the entire $7,500 he was hoping to pocket.
"Di, di, di" - down, down, down, he says in his warehouse in Yiwu, a city in eastern China's Zhejiang province. "Every falling cent is like cutting flesh from me."
Hundreds of factories here, many of them no more than home workshops, make Santa hats, Christmas tree ornaments and other holiday decorations. The owners and seamstresses are battered by market whims: Beijing has allowed the dollar to fall 14% against the yuan since 2006, which has forced some factories to close and others to fire workers. Du has let half his 120 employees go while contending with surging oil prices and the escalating cost of materials.
He used to take Sundays off, visiting teahouses and driving with his wife and 6-year-old daughter in their BMW sport utility vehicle. No more. Now it's 11-hour shifts, seven days a week. He shuttles between his cluttered warehouse, a small sewing shop in the city and a bigger operation in farmland 60 miles away. He sits in front of a computer trying to make the numbers work. They don't.
"The pressure's getting bigger and bigger," he says, moments after his cellphone announced that the dollar had fallen another notch. "It's cruel, isn't it?"
Smoking a pipe in an inner sanctum reached through two electronically locked doors, Asoke K. Laha heads an army of software engineers whose ingenuity knows no national boundaries. Eyes fixed on hundreds of glowing computer screens, they write the programs that help companies such as Universal Studios and Amtrak keep their operations running smoothly.
The growing U.S. reliance on such small- to medium-sized IT companies propels India's booming economy. But that connection also leaves the companies vulnerable. With 90% of its business from American clients, Laha's Interra Information Technologies earns nearly all its money in dollars. Yet the company's rent, salaries and transportation costs are in Indian rupees. With the fall of the greenback, many firms are faced with dropping revenue.
"For my business, the dollar has a serious impact," says Laha, who jets between India and Interra's U.S. headquarters in San Jose. The firm's Indian operations grew from a few rooms in Laha's New Delhi home to two floors of an office building in an industrial park in Noida, a burgeoning satellite city.
The dollar's plunge halved Laha's profit and forced him to lay off 20 employees. The currency hasn't fallen as far as he had feared, but these are uncertain times in an industry interlaced with the American economy.