Re: Yen dollar exchange rate

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Article #2949

#2949

From: sinister
Date: Fri, 01 Jul 2005 12:08

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<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.

>
> -- Roy L

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From: "sinister" <sinister@nospam.invalid>
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