ShmoopTube

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Finance a la shmoop what is an ex change rate? alright I give you two cleary's for

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one cat eye you give me to come quat's for one banana with the peel on this [Person trades come quats for banana]

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time thank you I give you forty two thousand three

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hundred eighty two dollars for this new Ford Hemi truck with the awooga horn yep

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these are all exchange rates marbles for marbles fruit for fruit and well dollars

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for trucks with awooga horns in place just do what you know... people off well in

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more common financee parlance exchange rates focus on the trading back and

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forth of national currencies while each country or region generally has its own [Selection of currencies appear and man holding an Uzi]

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currency printing more of that currency lets the government pay its bills more

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easily if it's not collecting enough dough in taxes but if it prints too much

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of that currency well then it falls in value relative to the currencies of

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other countries think about that you print lots of dollars and you have lots

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of debt well then it's easy to pay back your debt right but if you do that too [Money transfers into debt]

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long people don't trust your currency and then it creates all kinds of havoc

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when you want to trade with them well when all that happens and it's volatile

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currencies back and forth the goods of the inflated country seem cheap to other

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countries and in theory well then they buy more stuff from the country that's [Other countries trading from inflated country]

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got cheap currency and it makes it much more expensive for the inflated currency

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country to then buy more from the we don't print too much currency country

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one euro cost about two US dollars when it first came out in the early 90s a

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nice hotel that was 250 a night in Paris cost a US currency holder about 500

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bucks right like it was 250 euros it was 500 US dollars pay for that same hotel

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so you can imagine there were not a whole lot of US tourists anxious to rent

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Hotel nights from Rue de la blah blah blah but when Europeans looked at buying [eBay website appears]

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american-made speedo swimsuits oh yeah they were cheap and clearly too many

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Europeans bought them but then the euro fell into closer parity with the US

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dollar in part because faith in their economic union fell and because the US

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appeared to be printing money at a slower pace than worthy Europeans and

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the public kind of wanted US dollars instead of euros because they thought

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the US a little bit more secure so what happened well the relative

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inflation of the US was in better shape than that of Europe

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so today the exchange rate after a long time decades is now about one to one [Man discussing exchange rates]

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meaning one US dollar buys you about one euro and same vice versa yeah so

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you'd say that the rate of euros to dollars is about even and coincidentally

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a US dollar buys you about 100 new Japanese yen and a US dollar buys about

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600,000 Zimbabwean dollars and let's see US dollar also buys fourteen thousand

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galleons if you know you're vacationing at Hogwarts lovely time [Hogwarts castle appears]

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