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Currency appreciation & depreciation

 
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Justin Phillips



Joined: 21 Oct 2014
Posts: 2
Location: Chicago, USA

PostPosted: Tue Oct 21, 2014 5:17 am    Post subject: Currency appreciation & depreciation Reply with quote

I know this may sound silly but I'm confused about the word play regarding the appreciation & depreciation of currency. For instance, does a 'fall in exchange rate' mean a 'fall in the value of the currency'? Or is it the opposite? Thanks! Smile
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Simon McKenna



Joined: 09 Jul 2012
Posts: 80
Location: Canterbury, Kent, UK

PostPosted: Tue Oct 21, 2014 8:45 am    Post subject: Reply with quote

Yes, it means a currency has become less valuable compared to other countries'.

Why it matters that a currency would appreciate or depreciate is slightly more difficult to answer! At least it presupposes international money markets where money can be traded as a commodity.

Whether money should be regarded as a commodity, or not, is aparently open to debate. Karl Polyani suggests that money, land and labour are not commodites at all. They are only treated as such when the equal distribution of wealth, nature and human lives come second to making a profit. Henry George says this, too, for example, when he describes the plight of the poor as more important to the happiness of man than the profits of a few landlords.
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