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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (65509)7/7/2006 2:41:54 PM
From: gregor_us  Read Replies (2) | Respond to of 110194
 
The Big Mac Index has for years been a great way to disabuse

oneself of the notion that a currency's strength is measured only against other currencies. I would think more and more, people will become familiar with PPP, as the USD's purchasing power dwindles over the coming years, while maintaining what mistakenly appears to be untroubling levels, "against other currencies."

PPP hit home for me when I started living in the U.K., and travelling to Europe and also AUS/NZ.

No doubt you've thought about this as well, given all the travelling you do.

Best,

G



To: GST who wrote (65509)7/7/2006 7:16:15 PM
From: Gib Bogle  Read Replies (2) | Respond to of 110194
 
"<50% drop in a year or two> We have already seen it happen in relation to commodities like oil and copper and gold"

But a 50% drop means a drop against a basket of other currencies, doesn't it? And haven't the prices of those commodities also increased in those other currencies? How does increasing commodity price drive the dollar down against other currencies? Am I missing something?


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