The 6 Pack Economist

I see that the dollar is in a downward spiral again.  Which if you understand what money actually is seems completely rational.  We knock the interest rate to near nothing which will essentially put more dollars in the pool and with more dollars chasing the same amount of goods and services you have inflation.  This is what is happening with foreign currencies and the dollar now. 

I am not sure why the Euro is worth anything either as when was the last time you purchased an good or service (Amsterdam red light district excluded) from Europe that was not a super luxury item?  Volkswagen maybe but they are made in México usually. 

This brings me back to my point.  Money is merely a medium to allow an easily exchangeable representation of your good or service.  And when taken on a national level the goods or services you can purchase with the money of that nation.  If that was confusing let me give you a little story.

Tom works for a week at Widget Inc. USA for a week.  He earns 500 US dollars.  Tom then wins a free trip to some country in the EU.  Tom then takes his 500 US dollars and exchanges it for 370 Euros.  When Tom uses those Euros he should be able to buy things made by the Europeans in what he feels is equivalent to his week of work.  This does not mean that some European worked for a week to give Tom something specifically, it means that Tom agreed to an exchange of his week of work via the currency medium for some amount of some Europeans time. 

I will continue the discussion of worthless money in other posts.  And just remember that time is money.