An exchange rate will tell you absolutely zero about one currencies relative worth to another. By your logic, someone in Japan, whose currency trades about 100

An exchange rate will tell you absolutely zero about one currencies relative worth to another. By your logic, someone in Japan, whose currency trades about 100 to 1 USD, would have about the same buying power as you per USD, when in fact, assuming you're both earning the same in USD, you would almost certainly have much, much more purchasing power. To accurately compare purchasing power among currencies, you need to use a metric like Purchase Power Parity (PPP): http://en.wikipedia.org/wiki/Purchasing_power_parity http://en.wikipedia.org/wiki/Purchasing_power_parity