🚀 go-pugleaf

"Curt Fischer" <tentrillion@gmail.NOSPAM.com> wrote in message
news:3il9pvFlu16bU1@individual.net...
> sinister wrote:
> > <royls@telus.net> wrote in message
news:42c4be4f.40409986@news.telus.net...
> >
> >>On 30 Jun 2005 20:18:40 -0700, "TXZZ" <superoutland@aol.com> wrote:
> >>
> >>
> >>>Yea how does the yen/dollar exchange rate affect pricing?  I mean,
> >>>shouldnt the exchange rate instead be adjusted?
> >>
> >>It is constantly being adjusted by market participants.
> >>
> >>
> >>>ok, if you cant tell where Im going with this, for a hypothetical
> >>>question, they always use examples like"the yen is 360 to the dollar,
> >>>so you could by 3 books.  But now its only 120 to the dollar so you can
> >>>only buy one book".  This sorta logic is used when discussing
> >>>economics, but doesnt that just mean the dollar/yen exchange rate would
> >>>be wrong?
> >>
> >>Why would it be "wrong"?
> >
> >
> > Of course, there is no "wrong".
> >
> > But the original poster's question does hint at a question that AFAICT
> > economics hasn't been able to answer:  why exchange rates fail to
normalize
> > in terms of PPP even over the long haul.
>
> I thought the standard answer was that many forms of capital are not
> mobile, even over the long haul.  Things like a country's legal system
> and the average education of its participants affect the value of
> capital in an economy too, do they not?
>
> --
> Curt Fischer


Do not forget that governments can influence money supply thus affecting
exchange rates.