A thought exercise on value of money.

[The Conservative]

The American Dollar is worth $1.00 in theory, but at the same time, if you go to CA, then to TX, then to FL, to lets say Chilis. The price of the same meal is different. Yet the portions are the same, and in many cases so are the personalities...

So why doesn't the $1.00 get the same "value" from coast to coast?

[K@th]

Supply & demand. Renting a 1,000 SF shop in downtown Manhattan to sell sandwiches is going to be far more expensive than that same spot in Rural, KY, population 7,000.

Owner of sandwich shop has to eat, so a $3 sandwich in Rural, KY is going to cost you $14 in NYC. If the landlord in Rural, KY starts seeing people clamoring for space, he gets to raise his rent and then your sandwich price increases.

[The Conservative]

Supply & demand. Renting a 1,000 SF shop in downtown Manhattan to sell sandwiches is going to be far more expensive than that same spot in Rural, KY, population 7,000.

Owner of sandwich shop has to eat, so a $3 sandwich in Rural, KY is going to cost you $14 in NYC. If the landlord in Rural, KY starts seeing people clamoring for space, he gets to raise his rent and then your sandwich price increases.

So when exchanging money to lets say a Euro, why doesn't the same logic work?

[K@th]

Same concept, just on a global scale. US dollar is strong, our money is worth more in other countries. If the dollar is weak, we get less for our money in other countries.

[Speaker to Animals]

Supply & demand. Renting a 1,000 SF shop in downtown Manhattan to sell sandwiches is going to be far more expensive than that same spot in Rural, KY, population 7,000.

Owner of sandwich shop has to eat, so a $3 sandwich in Rural, KY is going to cost you $14 in NYC. If the landlord in Rural, KY starts seeing people clamoring for space, he gets to raise his rent and then your sandwich price increases.

So when exchanging money to lets say a Euro, why doesn't the same logic work?

It does work like that. Different countries have different costs of living as well, and within those countries the cost of living can vary between regions.

The exchange rate between currencies is determined by supply and demand on a currency exchange market. The cost of a meal or rent is determined by supply and demand within the market in which you purchase those things.

[The Conservative]

Same concept, just on a global scale. US dollar is strong, our money is worth more in other countries. If the dollar is weak, we get less for our money in other countries.

So then, with all of this in place, a $15/hr living wage would only work well in states where the income is inherently lower correct?

[Montegriffo]

Supply & demand. Renting a 1,000 SF shop in downtown Manhattan to sell sandwiches is going to be far more expensive than that same spot in Rural, KY, population 7,000.

Owner of sandwich shop has to eat, so a $3 sandwich in Rural, KY is going to cost you $14 in NYC. If the landlord in Rural, KY starts seeing people clamoring for space, he gets to raise his rent and then your sandwich price increases.

So when exchanging money to lets say a Euro, why doesn't the same logic work?

Exactly the same, you will get a lot more for your Euro in Prague or Athens than you will in London or Paris.

[The Conservative]

Supply & demand. Renting a 1,000 SF shop in downtown Manhattan to sell sandwiches is going to be far more expensive than that same spot in Rural, KY, population 7,000.

Owner of sandwich shop has to eat, so a $3 sandwich in Rural, KY is going to cost you $14 in NYC. If the landlord in Rural, KY starts seeing people clamoring for space, he gets to raise his rent and then your sandwich price increases.

So when exchanging money to lets say a Euro, why doesn't the same logic work?

Exactly the same, you will get a lot more for your Euro in Prague or Athens than you will in London or Paris.

We are talking about different countries in this case, not states though. Also, lets be real here, I am sort of playing Devil's advocate here.

[Montegriffo]

I thought we were talking about the value of money?

[K@th]

I am sort of playing Devil's advocate here.

Devil's advocate about what point? Supply & demand is what it is. If you have people willing to pay more, you get to charge more. If demand is low, you can't charge those high prices, because nobody will buy.