I'm glad you brought this up, Joe. It's not the *absolute* value of one currency
vis-a-vis the other that matters here, but the *relative* one. Please let me explain.
Scenario 1: country A's GDP: 1 T$; country B's GDP: 1 TF. Exchange rate: 1 $ = 1 F.
*Relative* "strength" between these 2 countries: exactly evenly matched!
Scenario 2: country A's GDP: 1 T$; country B's GDP: 1 PF. Exchange rate: 1 $ = 1000
F. *Relative* "strength" between these 2 countries: exactly evenly matched, too!
Therefore, I was evidently referring to currency devaluation *relatively* to a
country's productive capabilities as measured by GDP, for instance.
As a closing example of my original illustration please allow me to cite Brazil
(again). Before our currency started to get "hammered" by speculators (even as
recently as NOW!) our GDP was (in $ terms) about 9th in the world (if my memory
doesn't fail me). But now, due to an incredible accumulated 24% loss since the
beginning of the year (which wasn't followed by a countervailing increase in
productivity, mind you!...) we dropped to somewhere perhaps below 12th now!
This is the kind of ill-effect that I was referring to ("first-hand" *practical*
example as demanded by John earlier) when I tried to address the currency valuation
business in my original "essay" here.
Marcus
On Mon, 24 Jun 2002 16:22:12
Joseph B. Reid wrote:
>Kilopascal's post in USMA 20511 led to 20514 and 20523 from M.R., 20520
>from Louis, 20523 and 20601 from Ma Be, and rebuttal in 20577 and 20578
>from Kilopascal. USMA 20601 was of record length.
>
>Beside these being off-topic, I still don't know which country is better
>off: UK with the pound sterling at $1.50 or Japan with its yen at $0.0082
>
>Joseph B.Reid
>17 Glebe Road West
>Toronto M5P 1C8 Tel. 416 486-6071
>
>
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