5 ms·
> In the west, we take fungibility for granted. The fact that a dollar is worth the same in Los Angeles as it is in New York, or Vancouver as it is in Halifax,
by ebg13 6y ago
> In the west, we take fungibility for granted. The fact that a dollar is worth the same in Los Angeles as it is in New York, or Vancouver as it is in Halifax, is worth celebrating.
Except that this is both blatantly false and also not at all analogous. First, a currency's "worth" is expressible solely in terms of what you can buy with it, and the price in dollars of a McDonalds Quarter Pounder is absolutely not the same in different locations. And second, the Yemeni city isn't the important distinction between the different Yemeni bills; the minting authority is.
A comparison between French Euros and Spanish Euros would have been far more reasonable, as they're produced by separate minting authorities but still both Euros.
- mumblemumble 6y agoOne could argue that it's not that the value of a dollar varies by location, but that the value of a quarter pounder varies by location. And I think that might be a more practical perspective, since a variable-value dollar would present an easy arbitrage opportunity, whereas buying quarter pounders in Manhattan and reselling them in Peoria is a scheme that would run afoul of some technical challenges. I think that I like the way that the World Bank measures the value of the two rials better. The US dollar (or any other large stable foreign currency) theoretically represents a fairly stable measuring stick that's going to be a little bit more resilient to regional effects than a commodity good.
- thaumasiotes 6y ago> One could argue that it's not that the value of a dollar varies by location, but that the value of a quarter pounder varies by location. And I think that might be a more practical perspective, since a variable-value dollar would present an easy arbitrage opportunity, whereas buying quarter pounders in Manhattan and reselling them in Peoria is a scheme that would run afoul of some technical challenges. You could make that argument, but it wouldn't be a very good argument, since the value of everything is systematically higher (measured in dollars) in Manhattan than in Peoria. The obvious model is that the value of the dollar is lower in Manhattan. (Also, you seem to have mixed up where you would be buying the hamburgers and where you'd be selling them.)
- leetcrew 6y agothis might seem obvious, but it doesn't really describe the situation well. things are expensive in manhattan because it is expensive to live in/around manhattan. even the lowly mcdonalds employee gets paid about twice as much to work in manhattan as in peoria. if you buy something that doesn't require local storage/labor, it will cost the same as it does in the rest of the country.
- thaumasiotes 6y ago> things are expensive in manhattan because it is expensive to live in/around manhattan. even the lowly mcdonalds employee gets paid about twice as much to work in manhattan as in peoria. All of this supports the idea that the value of a dollar is lower in Manhattan than elsewhere. Indeed, it doesn't just support the idea; it is a restatement of it.
- leetcrew 6y agoonly if you ignore why it's more expensive to live in NYC. it's more expensive because it's more desirable to live in NYC than Peoria. waterfront property is also more expensive than similar inland properties. the water doesn't locally inflate the dollar; it's a feature that people pay extra for. if you accept that the real value of a dollar is less in NYC, you also have to accept weird consequences like a CPU from amazon is worth less there as well.
- ebg13 6y ago> since a variable-value dollar would present an easy arbitrage opportunity It is an easy arbitrage opportunity! That's why young adults working in San Francisco can retire earlier if they leave with their earnings.