Post
Topic
Board Economics
Re: One of the biggest problem Now with currencies
by
teosanru
on 08/10/2020, 20:50:06 UTC
The third world countries such us kyrksitan is that the currencies has no value.
So You Can't Even Exchange them to other currencies... What They do about it?

Its Not spoken problem much but its a problem
I think first of all you are talking about Kyrgyzstan. Well it has a well defined currency Pegged at 80 Som to 1 USD. What makes you say it's a worthless currency?
What are you currently using to trade if the currency doesn't have an international rate, can you still use it?

How much is food for example on average per person per month (or how much is a kilo of sugar, flour, potatoes (or equivelant)... Etc?

What's the priblem with not being able to convert? Does no one sell usd for it?


But who will want worthless currencies? 
Actually nobody!
You don't see a world's currency value with respect to other currencies but you see it in respect to the purchasing power parity of that country. If we go by what you say 1 USD = 42000 Iranian Rial but does that makes their currency worthless? No it doesn't because the price level of the economy is adjusted accordingly and 42000 Rial would buy you pretty much the similar things that you could buy using 1 USD. You are comparing 1 ADA to 1 BTC and saying ADA is worthless. Which doesn't makes sense.



I compare with usd and eur world strongest currencies and most trusted currencies.

You are not getting the point just because a currency is pegged stronger to other doesn't means it is more valuable. The Kuwaiti Dinar is the highest valued currency yet the economy of Kuwait is far behind many. Think of it like this two companies start business with $1000 capital each. One company issues 100 shares of $10 each while the other issues 1000 shares of $1 each. Now how can you compare both companies by saying the $10 company is more powerful? Similarly in case of currencies the shares are the total money in circulation which means the value of single unit is low yet a person has full purchasing power because he has adjusted higher units of that currency. Many countries even slash the zero at the last to correct this thing you are talking about.