How the Currency Wars can double your profits without increasing sales!

24 October 2015 (20:58 UTC-07 Tango 01, 23 October 2015)/02 Aban 1394/10 Muharram 1437/12 Bing-Xu (9th month) 4713

“Monetary authorities in Sweden have limited policy options that would assist in weakening the Krone, and we doubt the ability of the central bank to meaningfully weaken the currency. Overall, we forecast a mild depreciation in the currency against the euro to 9.60 by the end of the year.”-Lloyds Bank

The Sweden based manufacturer best known for vehicles, Volvo, just reported a sudden doubling of profits without a significant increase in sales.

Volvo sales have been so bad in the United States they’re slowly getting the hell outta Dodge. In 2014 Volvo eliminated 4-thousand 4-hundred jobs globally (on top of the 3-thousand they got rid of in 2013)!  In April Volvo shutdown its distribution operations in Orange Township, Ohio, U.S.A.

Now Volvo reports a 9% increase in global sales (it would have been higher if it weren’t for a 33% crash in South American sales), not enough to double profits.  Administrators do credit part of their profits on their massive job killing program, but the real reason is a 70% increase in revenue caused solely by the value of their currency!

Several Swedish corporations are reporting increased profits simply due to the strength/weakness of the SEK versus the USD and EUR.  Ericsson reported a weak 3% net increase in global sales, but a 16% increase in profits.

Although Sweden is a member of the European Union it still uses its own Swedish Krona (SEK) for cash.  Last week currency investors were being told to “go long” with the SEK and dump the stronger USD!

This is an example that a weak currency can greatly increase profits without significantly increasing sales (which is more complicated than I can explain), in relation to the simplistic mainstream news explanation that a weak currency increases profits solely by increasing international sales.   The Swedes are now making big profits without doing anything!

$$ Tesla $$ bites the electric dust on Reliability!