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Old 11-24-2008, 01:36 PM   #1
Einzelherz
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Default how do exchange rates work?

I understand the rate part, but what decides a rate? Why is 1 brittish pound 1.5 USD?
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Old 11-24-2008, 01:39 PM   #2
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Quote:
Originally Posted by Einzelherz View Post
I understand the rate part, but what decides a rate? Why is 1 brittish pound 1.5 USD?
The more t's a particular currency has, the stronger it is against the dollar.
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Old 11-24-2008, 01:39 PM   #3
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supply & demand
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Old 11-24-2008, 01:40 PM   #4
Einzelherz
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so i guess i'm moving to lichttensttein then.
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Old 11-24-2008, 01:41 PM   #5
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Quote:
Originally Posted by Einzelherz View Post
so i guess i'm moving to lichttensttein then.
A well-played comeback.
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Old 11-24-2008, 01:41 PM   #6
under pressure
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CAD 4 Lyfe.

But seriously, it was kinda cute to see them get all excited for a few months.
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Old 11-24-2008, 01:43 PM   #7
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How does Google work?
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Old 11-24-2008, 01:44 PM   #8
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Old 11-24-2008, 01:53 PM   #9
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as demand for a particular currency increases, its price increases, and vice versa.
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Old 11-24-2008, 01:55 PM   #10
Einzelherz
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Quote:
Originally Posted by Kaiser View Post
A well-played comeback.
it's hard trying to come up with a country that ACTUALLY has more than one T in its name.

it's harder when you're a moron
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Old 11-24-2008, 01:56 PM   #11
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Old 11-24-2008, 01:57 PM   #12
Einzelherz
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Quote:
Originally Posted by INFIDEL View Post
as demand for a particular currency increases, its price increases, and vice versa.
so that means it's directly tied to that economy? If all of us stop shopping at walmart the yuan will go down?
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Old 11-24-2008, 02:00 PM   #13
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Old 11-24-2008, 02:04 PM   #14
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Quote:
Originally Posted by Einzelherz View Post
so that means it's directly tied to that economy? If all of us stop shopping at walmart the yuan will go down?
It might for a short time, until China starts unloading their trillions of USD, and drops the USD to match.
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Old 11-24-2008, 02:11 PM   #15
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It might for a short time, until China starts unloading their trillions of USD, and drops the USD to match.
The Chinese own bonds which can't just be "unloaded."
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Old 11-24-2008, 02:16 PM   #16
Brad Pittiful
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Quote:
Originally Posted by Einzelherz View Post
it's hard trying to come up with a country that ACTUALLY has more than one T in its name.

it's harder when you're a moron
how about

the united states

and liechtenstein has only 2 ts
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Old 11-24-2008, 02:24 PM   #17
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the intersection of the commodities market (IS) and the money market (LM) determines the output of the economy, GDP (Y), and the interest rate (r). The interest rate also determines the expected exchange rate Ee.

Basically, if interest rates go up, the currency becomes stronger, and if interest rates go down, the currency becomes weaker.
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