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Strong Yen Weak Dollar

During my recent trip back to the States, I engaged in an engaging conversation with a learned compatriot, the staunchly patriotic father of one of my best friends.  I bragged about my enjoyment of the current strong yen / weak dollar situation.  I am a rich man in my home country--almost as rich as Scrooge McDuck from "Duck Tales."  As such, I spoiled myself with flower pedal walkways, palm leaf fan-downs, direct-to-mouth grape feedings, and many a decadent shopping spree during my visit.  I even bought a pony!

My learned compatriot asserted that the dollar is not weak.  How can it be when a single dollar purchases 78 yen?  Meeting the first person not to be convinced of and vehemently jealous of my sentiments, I became dizzy and confused and drunk with dizzy confusion.  To reassert my argument, I again pointed out my newly-purchased flashy Mr. T-ish gold chains.  He finally acquiesced that the dollar is not as strong as it used to be (a single dollar used to purchase 117 yen or so), but it still has the markings of a strong currency.

Unfortunately, my semi-drunk state at the time ("sailor's choice" as my best friend calls it) prevented me from presenting a convincing counterargument.  Thus and therefore, I present it below.

My counterargument is that comparing the dollar to the yen is an apples to oranges comparison.  The dollar's smallest denomination is actually the cent (1/100th of a dollar), while the yen has no such smaller denomination.  1 yen is as small as you can get, but 1 dollar is not.  Therefore, a more appropriate currency strength comparison would be yen to cent.

Back when the dollar was trading at around 117 yen, 1 cent would buy 1.17 yen.  That's strong.

Nowadays, the dollar is trading at around 78 yen, which means 1 cent buys only 0.78 yen.  That's weak.

Got it?

If not, I'll buy your soul with my strong yen.

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  • Guest - da99

    Just to give you even more ammunition: I remember hearing there was a time (some time in the past 30 years) when the dollar would buy 240 yen. I also remember when you could buy a 1 oz gold coin for less than $400 USD! Now, you need $1600-$1780.