SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Currencies and the Global Capital Markets
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Frodo Baxter who wrote (593)9/7/1998 8:26:00 AM
From: Robert Douglas  Read Replies (1) of 3536
 
Lawrence,

I'm not at my office today, so I don't have my books to look at, but let me just clarify what you are saying. You are saying that the dollar/yen exchange rate back in 1985 was a "correct" rate and the Plaza Accord was a wrongheaded policy that has resulted in 13 years of wrongly valued currency rates.

Hummm, that's one I'll have to stew on. You make some good points to consider.

You further state:

The rate was 250 back then. Factor in a dozen years of awesome economic growth in the U.S., and not much of anything from Japan, and you realize that equilibrium will be restored when dollar-yen hits 300 or so. Right???

I believe it is here your thinking takes a wrong turn. The pertinent numbers to compare wouldn't be growth rates but rather rates of inflation. I'll look up the numbers later, but I'm almost certain that during this time frame Japan ran much lower rates of inflation than did the U.S. This would mean that even if 250 was correct back in 85 that the correct exchange rate today would be less than 250 and not more.

Of course such an analysis is fraught with perils since each country uses different methods of calculating inflation, both of which are probably flawed. I'm not quite the critic of government numbers that say, Jimmy Rogers is, but I know how crude they are.

More later.

-Robert
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News