Gyroscopic Investing

Kshartle wrote:

MachineGhost wrote: I think we are merely arguing over semantics of how short-term short-term is and how long-term long-term is.

That might be the case but I think if you're saying that you can't have long term purchasing power gains in one currency over another, I just don't understand where that is coming from.

Some currencies gain in purchasing power over time and some lose purchasing power. Certainly you can compare two currencies over any time period and have a difference in the exchange rate and the interest rate returns. PPP is only about the present time...that at any given time there shouldn't be an arbitrage opportunity between two currencies whereby you could exchange one for another and buy goods cheaper then sell them in the other currency and reap an arbitrage gain. Either the rates will move or the prices of the goods will move to eliminate this.

PPP deals not only with exchange rates but the prices of goods.

The gains of one currency vs another are not related to the price of other goods though, just the exchange rate changes over time coupled with the interest returns. For example the Yen used to be 360 to the dollar. The Swiss franc used to be $0.23 now it's what....$0.90?  The loonie when I was a kid was $0.60, now it fluctuates around $1 even.

PPP is not realted to long term changes in the relative value between two currencies it's about how much stuff they can buy at the present time and why you shouldn't be able to just do a currency change and buy more stuff now.

If any readers of the thread who think they understand this can clear up the dissagreement I would appreciate the thoughts. If I'm mistaken I'd like to understand and correct it.

Libertarian666 wrote: No, you are right, other than that the CHF is actually about $1.10 at present.

Kshartle wrote:

Libertarian666 wrote: No, you are right, other than that the CHF is actually about $1.10 at present.

Thanks Tech, no one else would help out. My question was rehtorical though, I knew I was right 

I mixed up the exchange rate on the Swissy and quoted the USD in Swiss terms. the ole forex switchero.

One of my favorite things here is to see people use economic theories to prove their points. It's always a train wreck of missunderstanding.

buddtholomew wrote:

Kshartle wrote:

Libertarian666 wrote: No, you are right, other than that the CHF is actually about $1.10 at present.

Thanks Tech, no one else would help out. My question was rehtorical though, I knew I was right 

I mixed up the exchange rate on the Swissy and quoted the USD in Swiss terms. the ole forex switchero.

One of my favorite things here is to see people use economic theories to prove their points. It's always a train wreck of missunderstanding.

...but you spelled rhetorical incorrectly.

Kshartle wrote:

buddtholomew wrote:

Kshartle wrote: Thanks Tech, no one else would help out. My question was rehtorical though, I knew I was right 

I mixed up the exchange rate on the Swissy and quoted the USD in Swiss terms. the ole forex switchero.

One of my favorite things here is to see people use economic theories to prove their points. It's always a train wreck of missunderstanding.

...but you spelled rhetorical incorrectly.

how about switchero?

buddtholomew wrote:

Kshartle wrote:

buddtholomew wrote: ...but you spelled rhetorical incorrectly.

how about switchero?

i didn't want to pile on...you know, kick a man/woman when he is down