On 2007.09.22 20:57:31 +0100, Thomas Dalton <thomas.dalton(a)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).
--
gwern
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