Quote:
Originally Posted by Cowboy89
You can't use rates from when the exchange rate was pegged or under the gold standard for purposes of comparison. You can only use rates from 1970 onwards when the dollar was allowed to trade freely. That average is much below 0.98! You're right the 90s was low, but today is high.
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The rate was pegged from 62 to 70, I see no reason why 1900 to 62 shouldn't be taken into account. In fact I see no reason why the pegged rate shouldn't be taken into account either, it may have been pegged but obviously the rate was about right.
The exchange rate is the exchange rate, regardless of gold standard or Bretton Woods or whatever, we may find ourselves entering a N American common market with a fixed exchange rate in the future, there is no more reason to think that we will continue to maintain a floating rate anymore than not historically.