Questions tagged [currency]

a generally accepted form of money, including coins and paper notes , which is issued by a government and circulated within an economy.

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1answer
119 views

The link between US debt of $250 Trillion dollars and “Promise to pay” on US Dollar currency

Giving background to my question: a prominent economist was discussing the problems of the US currency and predicting it's collapse, said the following: "...a currency is a store of value, it's a ...
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Is there merit to the argument of reducing the US trade deficit

Is the merit to the argument of reducing the US trade deficit and the inequitable tariff regime imposed by its trading partners that works unfavorably towards the US. Does this give merit to the ...
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What are the known / alleged problems against using energy as currency?

What are the known (and alleged) problems of using Joules (i.e. a measure of energy/work) as a currency? I tried to find such idea in Google (searched terms like "technocracy", since someone told me ...
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how does the USA maintain the value of it currency in light of $800 billion trade deficits

In light of its Reserve currency status, How does the USA maintain the value of it currency in light of $\$800$ billion trade deficits that have accumulated to over $\$12$ trillion as pointed out by ...
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70 views

Considering how USD enters the market, is the USD actually unbacked? Could the USD represent a unit of a “fund” of securities held by the Fed?

From my understanding, all new money enters the market either 1) by the Fed lending it to banks, so the Fed essentially owns bonds in the exchange, or, 2) The Fed purchasing other financial assets. So ...
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1answer
347 views

How does Egypt prevent people from arbitraging their currency?

Apparently Egypt uses a fixed exchange rate so there is a substantial difference between the government rate for the Egyptian pound and the price on the street. What prevents someone from just buying ...
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3answers
552 views

How can a country ensure its national currency is used by its citizens?

I am wondering how countries are able to force everyone to use its own currency, instead of some external currency (like the U.S. dollar or Bitcoin or cookies or something else not under government ...
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71 views

What may have caused these blips in the value of Euro vs. US dollar

I was looking at the USD/EUR exchange rates a few minutes ago (Saturday evening, Eastern Time Zone here in USA) at xe.com and noticed some sharp blips on it from earlier today. The graph looked as ...
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Central Banks Currency being used as value keeping hypothesis

I recently came up with the idea that all the worlds currencies with central banks may be being used as a way to steal value from people who give value to them. And no, im not talking about inflation (...
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1answer
135 views

Currency Value Formula

I recently have gained interest in the way currency value is derived in crypto-currencies and have researched the ins and outs of supply and demand. Is there a particular mathematical formula to ...
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In a closed system, what is the relationship, if any, between currency supply and market capitalization?

Assuming: A world in which the market value of publicly traded companies is known Any transaction to buy or sell stock of said companies can only be consummated with a new currency X, which is freely ...
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625 views

How many US Dollars are lost or destroyed annually?

Are there any estimates on how many US Dollars are lost or destroyed annually? By "lost or destroyed", I mean permanently removed from circulation because the currency is no longer usable For ...
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259 views

How could the Roman sestertii/sesterces be converted into modern terms (say 2017 US$)?

Of course, the value of the sesterti must itself have fluctuated over the centuries it was in use. And so if I must narrow it down, I am particularly interested in its value during the time of ...
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139 views

How do economic and financial policies in government deal with cryptocurrencies?

Given the decentralized nature of cryptocurrencies like bitcoin and ethereum, how can centralized organisations like banks and the government create policies around it without changing the way ...
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156 views

Why are different currencies able to purchase different amounts?

I am baffled by this for so many years! Kindly, explain this in layman's terms (i.e. to a guy who never studied economics at a university): I can purchase one dozen of eggs for €3.52 in Frankfurt, ...
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Is it possbile central banks are outside of books getting money from deflation? [duplicate]

Is it possile that central banks are secretly stealing from the economy by printing money when the the dollar deflates, so the dollar stay the same value and nobody notice it? What if the dollar ...
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1answer
365 views

Financial Smart Contract on Ethereum: can an Ether Futures contract be priced in Ether?

BACKGROUND This is more in the wheel-house of economics than programming, but after a few different titles, I thought it best not to skirt around the root of my question OR create a oddly phrased USD ...
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842 views

What's the economic effect of a country reducing its imports?

If a country enacts a program that successfully reduces its imports, eg: A 'buy local' advertising campaign A program of training mechanics to maintain older cars, rather than buying new imports An ...
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106 views

Why would Switzerland, with its export-driven economy, worry about weakening against the dollar?

I was reading about the SNB's decision to abandon the peg in 2015, and among the various articles I read, one from CNBC quoted the SNB president saying the following "The euro has depreciated ...
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1answer
239 views

Is it valid to compare cryptocurrencies by using their smallest divisible unit?

I'd like to compare the relative value (in USD) of three cryptocurrencies: Bitcoin, Ethereum, and IOTA. (See spreadsheet below.) Specifically, I'm comparing the price of each currency's smallest unit ...
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381 views

Is there something that does not change its value that can be used to measure currency inflation?

Currency is represented as an exchange for something valuable, whether it be an object or work. Prices for objects can change over time, depending on demand and supply, making objects unreliable to ...
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Why Yen grew stronger after North Korea's H-bomb threat? [duplicate]

Financial markets have had only a muted reaction to the dispute in recent months, but on Friday assets regarded as havens for investors jumped immediately after the news of North Korea’s latest H-...
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Uncovered Interest Parity question

I am trying to understand the fact that, given that the uncovered interest parity holds, a rise in dollar interest rates will cause the dollar to appreciate. Is this a good intuition? Uncovered ...
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1answer
351 views

How can the HKMA peg the Hong Kong dollar at 7.8 HKD/USD for so long?

A lot of pegged exchange rate systems don't stay pegged for so long (e.g. because the central bank run out of reserves to maintain their values) So far I understand that the HKD is 100% backed by the ...
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1answer
239 views

How would unlimited free energy affect the global market? [closed]

What will the effect on today's global market if a new source of free unlimited energy was to be discovered? How badly will it disrupt today's global market and how badly will it affect our currency? ...
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Why do Higher Interest Rates attract Foreign Investors?

I am reading the following Article at Investopedia which states Generally, higher interest rates increase the value of a given country's currency. The higher interest rates that can be earned ...
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896 views

What effect would removing the lowest denomination currency have?

Here in New Zealand our lowest denomination coin is 10c after the 5c was removed about 10 years ago. I think generally the public is pretty happy about the move. It's quite a common argument to ...
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190 views

Why is JPY considered a “safe currency”?

When the economic prospect around the world feels getting worse and/or getting higher uncertainty, usually the value of JPY is getting higher, because investors are said to start to buy JPY to shelter ...
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91 views

What are the constituents of a country's inflation

If we assume a country where only demand pull inflation holds, that is no imports cost inflation or currency fluctuations are a risk, then we can assume that inflation is determined by: Consumer ...
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161 views

Norway inflation and exchange rates

I am looking at Norway's economy, and I'm trying to make sense of some of the data I see. Norway's economy has a very close relationship to crude oil, and in 2014 crude oil had a massive drop. Looking ...
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98 views

Can banks maintain Euro accounts if the country they're in leaves the eurozone?

If a country forcibly leaves the Eurozone, is it possible for banks within this country to maintain existing euro deposits? Or does leaving the eurozone mean those deposits are automatically ...
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3answers
1k views

Why is the Euro a bad idea compared to other currencies?

Many economists, including Nobel laureates Paul Krugman and Joseph Stiglitz, have said that the Euro was a bad idea from the beginning and is a major reason for all the current economic problems. My ...
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196 views

Why are European countries happy to be outside Eurozone?

In EU countries like Poland, Czech Republic, Hungary, etc, people are happy that they are not in Euro zone and Euro crises like that of Greece do not affect their economics. However, some European ...
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2k views

How do countries create their own currencies (and give them meaningful value)?

Regardless of why they'd do it, what do countries do to make their own currency, replacing the old one, and give their new one value? I sorta get how it works, but this kind of economics is still ...
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Creating a currency

I have been given an assignment for creating my own currency in economics. I am curious what one should know when doing this. It doesn't have to be too elaborate but I would like some advice. I know ...
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56 views

Inflation-adjusted units of account

In Chile, most of prices are measured in the local currency, the peso (currency code CLP). However, there are two other units of account. These are the UF and the UTM. These keep track of the real ...
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What are some benefits of local currencies?

Lets say that we have in my country Greece there is an Island Crete that it has big production (agriculture,small banks etc.) and produces big surplus compared with other parts of Greece and the ...
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32 views

Where can I find historical (very old) USD printing data?

Where can I find historical/very old USD printing data? Charts can be useful, but I want numbers. It is for a project.
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1answer
102 views

Econometrics for currency valuation?

Different assets have different motivations and components for price determination. For example, an equity stock price might be considered to be include the value of underlying company, its potential ...
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1answer
96 views

Why is Japanese Currency tied to gold?

I was listening to a Bloomberg market update, and the journalist mentioned that the Japanese currency was down as Gold rose. I've heard that investors park their money in Yen. Is the reason the Yen ...
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1answer
77 views

Given fractional banking and the multiplier effect, for every dollar in circulation, how many dollars in spendable money exist?

The fractional banking system, in a nutshell, allows banks to invest the money deposited in them, and then for whoever ends up with that invested money to deposit the money back into the bank, which ...
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186 views

What are the main differences in a macroeconomic model, i.e. New-Keynesian DSGE, under a currency substitution (full dollarization) scheme?

I have searched arround the web and economic journals trying to find out research related to a macroeconomic model in which the country is fully dollarized, but I haven't had any luck. My main concern ...
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Can a weaker currency be used to offset lower productivity of labour in an economy?

Can a weaker currency be used to offset supply-side (specifically low productivity of labour) problems of an economy to restore international competitiveness?
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110 views

Are there plausible scenarios for the U.S. dollar to fall out of use as the world's reserve currency?

The U.S. has maintained an overall trade deficit for decades, essentially exporting money. For many countries this fund of 'ex-patriated' dollars has been a big tool of trade. Everyone accepts dollars....
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1answer
217 views

what in real terms causes one nations currency to be more valuable than another?

I would like to understand in atomic terms what makes the value of one nation's currency change with regard to another. Read that, without citing complex terminology but in basic terms. Obviously, ...
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1answer
262 views

What do the numbers in the ISO 4217 currency codes mean?

The International Organization for Standards (ISO) has a ISO 4217, which delineates currency codes, country codes, etc. for, well, international currency. Alongside this, each country is given a ...
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Forecasting future currency exposures

I have a data set (about 60 observations for each variable) for monthly operating income for a Japanese company denoted in EUR, USD, and JPY, and their respective currencies. I believe there is linear ...
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867 views

What made The Wörgl Experiment successful?

Background: In 1932, in the midst of the Great Depression, the small town of Wörgl in Austria successfully experimented with its own local currency (in the form of a stamp scrip) ... They not only ...
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Why was there a sudden rise in trade-weighted US dollar value in 2014-2015?

I was trawling the web and happened upon this graph: https://fred.stlouisfed.org/series/DTWEXM . The value of the trade-weighted US dollar was going steady until 2014-2015, rose rapidly, then it sort ...
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Currency Denominations Affecting Prices

My question regards how currency denominations might artificially affect prices. For example, a baseball game that determines a good pricing scheme for parking would be charging 7 dollars per person. ...