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Mar 1, 2015

Currency Value

Posted By Snow at 3/01/2015

Why currency value fluctuations seems...

The table shows a simplified imagined trading between nations - where America buys oil from Saudi, and Saudi buys luxury items from Britain. If this table is right - say when the US$ decreases in value - since Saudi sells oil using the US$, even when they sell the same amount of oil at the same price, their money devalues so much until they can't afford luxury items from Britain anymore.

With
RM300
I am a millionaire
in Indonesia
And see how profit can be made simply by exchanging money - without the need to deliver commodities. When profit (or loss) can be made like this, it seems it will increase (or lose) money, out of thin air.

So that's the power of currency exchange? Did I understand it right?
If so, don't you think it is... wrong... (=-=)v والله أعلم

A plate of delicious biryani RM10
KWD0.82   GB£1.79   EU€2.47   US$2.77   TR₺6.94
AED10.16   SAR10.38   CN¥17.35   JP¥331.08

Buy 30 with 7% discount at 1 million Rp

BTW when oil price falls, does this mean supply exceeds demand?
I'm happy if there's less demand for oil | But if its greater supply, from who...
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3 comments on "Currency Value"

Snow on Mar 2, 2015, 10:55:00 AM said...

Why do I feel the currency market is like playing Drug Lord...

Snow on Mar 4, 2015, 10:54:00 AM said...

Is this why foreigners own properties when they don't even live there;
while the locals who actually do cannot afford the houses?

Big Red X

. the government is to protect its citizens

. the housing projects are to shelter the locals first as they live there
     . all citizens deserve to afford a home for their families
     . homelessness should not happen when there are vacant houses

. the priority is less on foreigners as they don't live there, they probably:
     . treat it as vacation house
     . rent it (outward cashflow), or
     . transact it for profit (profiteering)

Imagine it like exporting your food for higher price, but then your citizens become starved. So please, it's not all about the money - this is a humanitarian issue. ♥

Snow on Mar 7, 2015, 10:32:00 PM said...

Real businesses can be wrecked by currency exchange. It can cease businesses.
When businesses cease, it lessens the production of commodities:
. Less commodities → more demand → price inflation
. Less commodities → less jobs → more unemployment

I'm afraid if the warped money circulates mostly among the super rich.


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