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should the US consider a currency redenomination? (lemmy.zip)

submitted 10 months ago by shortwavesurfer@lemmy.zip to c/personalfinance@lemmy.ml

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Prices of things are becoming absolutely insane. $800+ rent, $30,000 cars, $10 sub sandwiches, etc. It would be nice to do a 3/1 split and cut everything by 2/3. Then we would have $266 rent, $10,000 cars, and $3.33 sub sandwiches. Wages, debts, everything would drop to 1/3 what they are now. It would also make coins useful again since a vending machine soda would be 2 quarters again.

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[–] DeadNinja@lemmy.world 2 points 10 months ago* (last edited 10 months ago) (1 children)

It's an interesting idea, but the caveat here will be to do this for all currencies in the world, otherwise the concept of foreign exchange rates would get fucked up.

One of the primary parameters for determining exchange rate between two currencies is to first determine how much the same service/product/lifestyle cost in those two currencies.

Unless you "adjust" both the currencies (and in turn, all the currencies in the world), one currency (or country) would spiral into an economic abyss.

[–] shortwavesurfer@lemmy.zip 0 points 10 months ago (1 children)

wouldn't the same logic apply. So for example, a euro would be $0.36? That should be easy for computers to handle

[–] DeadNinja@lemmy.world 1 points 10 months ago (1 children)

Correct, but only if you can make the European Union to agree to slash the value of 1 Euro from $1.09 as of now, to $0.36 ( what you proposed) - and then get every other currency in the world to follow suit.

Good luck with that.

[–] shortwavesurfer@lemmy.zip 0 points 10 months ago

The European Union wouldn't have anything to do with it. The market would, because the dollar would triple in value and therefore the euro would be one-third its value compared to the dollar.