Help me settle argument: currency

I'm not the brightest tool in the shed
Plus I don't have a degree in economics.

But one thing I'm 99% sure (I hope I'm not going to make a fool out of myself)
Is the following: going to keep it as short as possible.
So please help me out.

I have heard so many people, say stuff like. Oh the Malaysia ringitt is now 3 to the dollar. There fore it's 3 times more expensive

Look how powerful the Australian Dollar it's worth 10000 Indonesia rupiah. Oh the hk currency is 5 times aus dollar. It costs 5 times as much to live there.

And each time I try and explain to them it doesn't matter how much the aussie dollar is worth compared to your currency. Being 1:1 doesn't mean anything. Being 100:1 means nothing.
To get relative strength of aud is to compare what the ratio used to be vs now

I even say to them so what about the Japanese yen ? 1 aud is worth almost 100 yen! And yet it means nothing based on this single factor


Am I wrong?

The most annoying I here All the time is " oh you guys are so lucky back in Malaysia we pay 3 times as much as it's 3 to 1

And

" wow look how strong the aud is to Indonesia. It's 10,000 times"

 

It really doesn't matter. But when it costs something with a stupid number of zeroes to buy an item as simple as a can of drink it makes it hard for me to buy something as I am always calculating the AUD equivalent which is exhausting.

A few years back I bought a mobile phone in Laos (IIRC)... my original phone from home had a problem. I came out of a bank with a huge wad of notes to buy it because the largest denomination note I could get was 100,000 kip. Which is equivalent to about AUD $17.

 

Yes, all you are hearing is nonsense, the literal number of one currency to exchange to another is meaningless without further context. Change in the cross rate over time is more meaningful. I hear the same unuseful discussion about shares i.e. someone suggesting how undervalued a 1c stock is compared to a 50c stock just based on share price, while ignoring the shares on issue / market capitalisation. The 1c company could be worth more than the 50c company!

 

Point them to the Big Mac Index.

Big Mac Index - Wikipedia

 

You need new friends.

 

You sack your friends based on their understanding of currency? Or that they are discussing currency?

 

By the sounds of it, and as headsonbeds is inferring, what you're referring to is "purchasing power".

 

To be honest. You get used to I
Currently Indonesia currency is 10k for 1 dollar
So yes a can of coke costs 15k. But you get used to it by taking off 3 zeros

I find If hard when it's euro or yen.
When you have to offer start adding 20% or subtracting 30%

 

Some of them are friends some of them are random a but whenever I try and explain it to them they look at me like I have 3 heada

 

Exactly. When a 10c share drops to 9c they don't bat and eyelid but when a share drops from $70 to $68. It's a OMG the share dropped by a massive $2!!!
A little more of a drop and it will be the same price and good value as it's competitor at the same price

I ask. Doesn't it depend on how many shares are actually issued??

This time my 3 heads turns in to 6 heads

 

You can buy 'Coke' in cans? Openly? We can only get it in small plastic sleeves of % of a gram.

 

Would you like some headphones from Colombia?

 

I didn't pass grade 3 maths. .........

 

Is this a send up

 

I started writing stuff and then realised after a long paragraph how complicated the reality is. I deleted what I wrote and want to simply say: it's complicated and to try to understand it you need to get to grips with macro economics, national economic outlooks, government bonds, national debt etc. Google might be your friend.

 

Buying/selling power, geeezzzze, how hard is it?

I see why TMNT keeps friends like this, the friends that never "make it", as discussed in Jan Somers books. It pays to keep at least one or two of these friends to keep you grounded as to how the majority of the population operates.

The go and do exact opposite.

 

Great when I went to US in 2012 AUD to USD was basically equal. 5000 AID converted to 5070 USD. Dad and I laughed that I made 70 bucks.

Such an awesomely cheap first world holiday