A Gun in Every Hand, A RUB in Every Pocket.

Day 695, 12:46 • Published in USA USA • by dreaeuh

Make that two to five guns in the hand of every American. Firms associated with the US are in the process of distributing weapons to Americans who sign up at the following link:

http://eusforum.com/index.php/topic,12597.0.html

Currency Prices

HUF, RUB, and IDR fell today against the USD, the narrowing gap evidence that there is slow in the flow of currency around those nations. The spread between HUF and gold is approximately .727, or 2.25% spread, IDR to gold is .549 or 1.641% spread, while the RUB is at .158 or .55% spread, which is lower than the USD rate of .337 or .94% spread.

Narrowing margins suggest a decrease in demand for a certain currency. Factors such as trade volume, risk, and money supply factor into this demand. The US recently printed an extra 200,000USD which will further deflate the USD.

Trading Strategies - The Sliding Dollar

The age-old axiom of buy low, sell high plays an important role in the trading of currency in eRepublik. In the world of finance and economics, the concept of "arbitrage" is a very important role; that is, making a profit from trading a high price currency for a low priced currency.

In an efficient market, there should be no gap between the purchase price of gold for a currency and the inverse purchase price of currency for gold. In this case, the one USD should buy 0.025 units of gold and one unit of gold should buy 40 USD. Any gap in these (the price of USD to gold is 40.39USD to buy one gold) is an opportunity to make a profit.

However, the difference between an efficient market and an inefficient market becomes evident in this eRepublik when a government sets the sale price of gold at .025 units (to sell for less than this is an immediate loss and higher than that will never be sold).

This pegs the value of the currency to an intangible and irrelevant number rather than a calculated value, and the currency price stays inflated against the rest of the world. What results is low prices for goods elsewhere and no way for Americans to buy said goods as the rest of the world refuses to buy USD.

This information is evidenced as we view the trends of spread between the currencies. The USD is able to buy about the same (or a little less than) amount of other currencies as they have in the past two weeks:
(HUF (two weeks ago) 1.375🙁now) 1.356(-.019, 1.381% decrease);
IDR 1.335:1.357 (+.022, 1.647% increase);
RUB 1.66:1.689 (+.029, 1.747% increase);
ESP 1.3:1.265 (-.035, 2.692% decrease).

However, the foreign currencies are able to buy more USD per foreign currency:
HUF .7273: .87 (+.1427, 19.62% increase)
IDR .7491: .93 (+.1809, 24.149% increase)
RUB .6010: .758 (+.157, 26.123% increase)
ESP .7663: .919 (+.1527, 19.926% increase)

Thus, HUF has increased in value against the USD by 21%, IDR by 25.796%, RUB by 27.87%, and ESP by 22.618%! And what does the US do to combat this dramatic depreciation of the USD? Print more money!

Here is how you take advantage of this situation: Convert your paycheck to RUB, hold the RUB for about a week or two, and you will make a 27.87% profit by selling the RUB back for USD. Same goes for any other currency. Plus, selling off the USD will further depreciate it, as more and more USD will be on the market in the coming days.

Editor's Note:

I was asked earlier today what I thought the price of the USD to gold should be, and, doing a quick review of USD and gold stocks and trading volume, I would price the USD at about 0.017 (58.823USD) or 0.018 (55.556USD) gold currently. I feel only the income from the maturing American boom is keeping it afloat. This is only the editor's opinion.