Chapter 11

As I just recently visited France, I found this chapter intriguing as the fact that the dollar is significantly weaker than the Euro was definitely a hot topic of conversation for our group during our tour. In fact, Payton Kinkead traveled around with a calculator and the exchange rate to alert one of our group members just exactly how much they would be paying. We very early on decided it was best to buy something that we wouldn't think we would find or be able to buy in the United States because it was just not worth it. Reading this chapter reinforced that idea, because paying more out of pocket for something that you could find at any American mall becomes a big deal when the dollar is worth less than the Euro. It also reminded me that while I hear about the devaluation of the dollar, I don't really think much about it in my day to day life, apart from those 13 days in France. International companies really do care about the value of the currency, and I was shocked by the fact that when the "Japanese Yen appreciates the dollar by one yen, their annual operating earnings fall by $450 million". Or even more dramatically, Iceland's economic disaster when their banks failed but everyone was using multiple foreign currencies and unable to pay them back. I think the fact that so many countries are so dependable on different countries for financing that helps the Euro make sense because it is essentially as ridiculous as Illinois causing Iowa to go into recession. However, there is so much complexity and depth to the connecting monetary markets can have on each other and all of the possible solutions and outcomes, it's no wonder the challenge of aligning currencies still exist.