Quote:
Originally Posted by Tcoat
This is one of my pet peeves.
You don't convert or count exchange on price alone and try to compare. In Canada a Canadian dollar is worth one dollar, period. You can't say well that would be 80 cents in the US because you are not buying it there.
When comparing prices they are in effect exactly what they appear to be not reduced by exchange rates.
If an item costs $1 and the wage is $10 then any exchange would be applied to both. This means that after exchange the item may cost 80 cents but the wage goes to $8 so proportionally exactly the same.
Soooo.... when we pay $6 a gallon for gas it is exactly the same as you paying $6 a gallon, you do not apply exchange or try to reduce it in anyway.
Not to mention that there are times like a good part of last year where the Canadian dollar is actually worth more than the US one.
Does this make any sense to anybody but me?
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I don't think I follow your logic...
For the sake of example, let's say it's a 2:1 conversion (CAD/US).
If we are to assume that wages and cost of goods both scale with the same conversion, and if we had equal wages:
If I made $10,000, you would make $20,000. If I pay $6 US for a gallon of gas, that's 0.06% of my wage. If you pay $6 CAD for a gallon of gas, that's 0.03% of your wage. You should pay $12 CAD for the same gallon of gas that I pay $6 US for, if they were to cost the same.
So, if we're both paying $6 of our respective currency per gallon of gas, I'm paying a lot more for my gas than you are. Double, to be exact.
Your argument of "a dollar is a dollar" is only true if you never look outside your own currency ecosystem for comparison.
Beyond that, my point was more that the cost of goods is not constant across borders. I have heard many times that, conversion aside, certain goods cost more or less in different countries.
Another example, again let's assume a 2:1 CAD/US conversion: I buy a new TV for $500 US. That same TV should cost $1000 CAD, for it to have the same cost ratio. However, if that TV actually sells for $1200 CAD, you're paying more for it than I am. I've had people cite examples exactly like this.
There are reasons, of course, beyond the currency exchange. Import taxes, tariffs, trade negotiations, etc.
I was with a group of colleagues from the UK last year in San Jose for a conference. They insisted on making a run to Best Buy to buy electronics. Even at inflated RETAIL prices, they said it would save them significant money to buy here and transport home (including paying the duty taxes) than buying at UK prices, and these are very smart nerd types, so they did the math on the exchange vs. cost/value ratio.
In either case, I can afford a beer in either currency, so I owe you one.
