On 2007.09.22 20:57:31 +0100, Thomas Dalton thomas.dalton@gmail.com scribbled 25 lines:
I've just looked up the numbers. So far this year, 26% of donations have been in something other than USD. In 2006, Salaries and Wages and Operation, which are the only two things that would change currency (and not all of them, at that), constituted 20% of total expenditure. This is not a particularly accurate way of working out how a change of currency would affect things, but I think it's close enough - the change in currency would not be a serious issue.
Exchange rates alone have their effect over a much longer period of time. The Euro and US$ were last at par in 2002; now the Euro buys US$1.36. At the peak in June 2001 the Euro bought US$0.85. So what would represent 26% of revenues now would have represented 20.3% when the U.S. dollar was at its peak. That 6% difference may not seem like much, but that's because other country fundraising is still relatively small. This is a simplified calculation because I have only considered Euros, but similar things would happen with other currencies.
You can't just look at the exchange rate, you have to look at how the exchange compares with purchasing power. If the value of a dollar drops by 10%, but the price of everything denominated in dollars increases by 10%, then it makes absolutely no difference to anyone that isn't a currency speculator. Exchange rates and purchasing power move separately (the former usually much faster than the latter), but they do tend to converge over time.
I don't think that's true. There are a lot of reasons inflation is considered bad even if the economy adjusted ideally (that is, all sectors' prices increased the appropriate amount). For starters, there's the cost just of increasing prices, and there's any inefficiences suffered while prices are increased.
More importantly, it's deeply unfair to holders of capital and especially fixed-return assets and everyone on fixed-incomes (like bonds or Social Security, or I think annuities are generally fixed).
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