The 1:1 thing is psychology, but it’s not really in question here. The important thing is relative movement. If today I can take $1 and buy ₽1 worth of Big Macs, great. But tomorrow, if I can take that same $1 and buy ₽2 or ₽4 worth of Big Macs, I get more Big Macs with that same dollar. That means the dollar has more buying power than the ruble.
How is that at all relevant given that Russia doesn’t trade in dollars though? Also, as a follow up question, do you think having a weak currency hurts or helps when you’re a major commodity exporter?
The reality is that Russians are not actually affected by this because pretty much nobody in Russia holds western currencies, and the domestic economy is largely self sufficient. The only context this matters in is trade, and Russia is a major exporter, which means that domestic revenue for the government goes up when rouble is weak. Hence why rouble gets intentionally depressed pretty much every years, and people always get really excited about it.
They just state inflation would be an outcome without actually explaining how that would happen. It’s pretty clear these people are just parroting things without understanding them.
Why do people focus on 1:1 ratios like that? Doesn’t this depend on the currency in circulation?
It feels like comparing Celsius to Fahrenheit and Kelvin, different numbers can still equal the same thing no?
The 1:1 thing is psychology, but it’s not really in question here. The important thing is relative movement. If today I can take $1 and buy ₽1 worth of Big Macs, great. But tomorrow, if I can take that same $1 and buy ₽2 or ₽4 worth of Big Macs, I get more Big Macs with that same dollar. That means the dollar has more buying power than the ruble.
How is that at all relevant given that Russia doesn’t trade in dollars though? Also, as a follow up question, do you think having a weak currency hurts or helps when you’re a major commodity exporter?
You tell me, you’re the one comparing them.
I’m simply pointing out the idiocy here https://lemmy.ml/post/23076839
The reality is that Russians are not actually affected by this because pretty much nobody in Russia holds western currencies, and the domestic economy is largely self sufficient. The only context this matters in is trade, and Russia is a major exporter, which means that domestic revenue for the government goes up when rouble is weak. Hence why rouble gets intentionally depressed pretty much every years, and people always get really excited about it.
Most, as you put it, “experts” point to inflation as a consequence, but I know shit about economics and don’t know the mechanism behind it.
https://www.newsweek.com/what-does-rubles-sharp-fall-mean-russias-economy-1992933
They just state inflation would be an outcome without actually explaining how that would happen. It’s pretty clear these people are just parroting things without understanding them.