[tw]

Originally Posted by slang

Thank you all for your comments and explainations.

A co-worker complained in a conversation a while ago something like..."it's ridiculous that the people in countries other than the US (or other countries with higher valued currency) should have to work such a long period of time to earn the money required to pay for common, low cost items that we here in the US find easily affordable".

A simple example maybe found in The Economist's Big Mac Index

From The Ecomomist of 11 Jan 2001:
The Economist’s Big Mac index offers a light-hearted guide to whether currencies are at their correct levels, according to the notion of “purchasing-power parity”. Under PPP, exchange rates should adjust to equalise the price of a basket of goods and services across all countries; the Big Mac PPP is the exchange rate at which hamburgers would cost the same in America as in other countries. The chart shows the under- or overvaluation of emerging-market currencies, the euro, sterling and the yen against the dollar. Dividing the price, in shekels, of a Big Mac in Israel by the price, in dollars, of an American Big Mac produces a Big Mac PPP of 5.68 shekels to the dollar. Since the market rate is 4.13, this suggests the shekel is 38% overvalued. At the other extreme, the Philippine peso is almost 60% undervalued: the market rate is 51 to the dollar, against a Big Mac PPP of 21.

Their latest survey as of 9 Jun 2005: