Australia has a lot of foreign businesses and it has a lot of immigrants. Both earn Australian dollars and huge amounts would be sent back their country of origin.
His does Australia balance its books on something like this? How do the economics of it work? Would it lower Australian inflation but shortening the money supply, and raise inflation of the destination country as it prints more money to exchange the Australian dollar?
So all countries account for some amount of currency that is circulating outside their borders, even countries with strong capital controls account for it unless theyre dumb or corrupt.
Australia is a good example, let’s say some guy sends 1000 AUD to Vietnam, his family trades it for Dong, who wants to sell Dong for AUD? Probably someone who wants to buy something from Australia, since that’s the place where people sell goods and services for AUD. The currency exchange markets basically facilitate this roundabout way of getting the money to the person that’s going to spend it in the country it’s from. Whether the guy’s family goes to the airport to trade it or a remittance service trades it, ultimately it winds up in the hands of some guy that is going to spend it in Australia (or the Christmas islands or somewhere that uses AUD).
(Note: this is not exactly the case with USD and EUR and other currencies held by foreign countries as reserves and used by foreign countries as their currency, it’s a little different with regard to those)
What that winds up meaning is that at any given time, some percentage of circulating supply for AUD is outside of the country at all times. Keep in mind, in the above example, the Dong never leaves Vietnam. These relationships with other countries are asymmetrical; the countries one currency is remitted to isn’t reciprocated back and forth. There aren’t a lot of Australians sending Dong to Australia working jobs in Vietnam.
Also bear in mind the weak but existing relationship with export this has. Some portion of those people that want AUD in Vietnam are buying goods from Australia to import to Vietnam (or elsewhere), but not all. And the money is just a representation of wealth, the real wealth is the things we produce. So those imports and exports are what countries are actually concerned about, and what actually affect the economics of a country more than currency movement.
You are not logged in. However you can subscribe from another Fediverse account, for example Lemmy or Mastodon. To do this, paste the following into the search field of your instance: [email protected]
No such thing. Ask away!
!nostupidquestions is a community space dedicated to being helpful and answering each others’ questions on various topics.
Rule 1- All posts must be legitimate questions. All posts titles must include a question.
All posts must be legitimate questions, and all post titles must include a question. Questions that are joke or trolling questions, memes, song lyrics as title, etc. are not allowed here. See Rule 6 for all exceptions.
Rule 2- Your question subject cannot be illegal or NSFW material.
Your question subject cannot be illegal or NSFW material. You will be warned first, banned second.
Rule 3- Do not seek mental, medical and professional help here.
Do not seek mental, medical and professional help here. Breaking this rule will not get you or your post removed, but it will put you at risk, and possibly in danger.
Rule 4- No self promotion or upvote-farming of any kind.
That’s it.
Rule 5- No baiting or sealioning or promoting an agenda.
Questions which, instead of being of an innocuous nature, are specifically intended (based on reports and in the opinion of our crack moderation team) to bait users into ideological wars on charged political topics will be removed and the authors warned - or banned - depending on severity.
Rule 6- Regarding META posts and joke questions.
Provided it is about the community itself, you may post non-question posts using the [META] tag on your post title.
On fridays, you are allowed to post meme and troll questions, on the condition that it’s in text format only, and conforms with our other rules. These posts MUST include the [NSQ Friday] tag in their title.
If you post a serious question on friday and are looking only for legitimate answers, then please include the [Serious] tag on your post. Irrelevant replies will then be removed by moderators.
Rule 7- You can't harass or disturb other members.
If you vocally harass or discriminate against any individual member, you will be removed.
Likewise, if you are a member, sympathiser or a resemblant of a movement that is known to largely hate, mock, discriminate against, and/or want to take lives of a group of people, and you were provably vocal about your hate, then you will be banned on sight.
Rule 8- All comments should try to stay relevant to their parent content. Rule 9- Reposts from other platforms are not allowed.
Let everyone have their own content.
Rule 10- Majority of bots aren't allowed to participate here.
Unless included in our Whitelist for Bots, your bot will not be allowed to participate in this community. To have your bot whitelisted, please contact the moderators for a short review.
Partnered Communities
You can view our partnered communities list by following this link. To partner with our community and be included, you are free to message the moderators or comment on a pinned post.
Community Moderation
For inquiry on becoming a moderator of this community, you may comment on the pinned post of the time, or simply shoot a message to the current moderators.
Matrix Chat Room
To find & join our chat room, log into fluffychat.im(or any other matrix client) and put #nostupidquestions:matrix.org on the search bar.
Credits
Our breathtaking icon was bestowed upon us by @Cevilia!
So all countries account for some amount of currency that is circulating outside their borders, even countries with strong capital controls account for it unless theyre dumb or corrupt.
Australia is a good example, let’s say some guy sends 1000 AUD to Vietnam, his family trades it for Dong, who wants to sell Dong for AUD? Probably someone who wants to buy something from Australia, since that’s the place where people sell goods and services for AUD. The currency exchange markets basically facilitate this roundabout way of getting the money to the person that’s going to spend it in the country it’s from. Whether the guy’s family goes to the airport to trade it or a remittance service trades it, ultimately it winds up in the hands of some guy that is going to spend it in Australia (or the Christmas islands or somewhere that uses AUD).
(Note: this is not exactly the case with USD and EUR and other currencies held by foreign countries as reserves and used by foreign countries as their currency, it’s a little different with regard to those)
What that winds up meaning is that at any given time, some percentage of circulating supply for AUD is outside of the country at all times. Keep in mind, in the above example, the Dong never leaves Vietnam. These relationships with other countries are asymmetrical; the countries one currency is remitted to isn’t reciprocated back and forth. There aren’t a lot of Australians sending Dong to Australia working jobs in Vietnam.
Also bear in mind the weak but existing relationship with export this has. Some portion of those people that want AUD in Vietnam are buying goods from Australia to import to Vietnam (or elsewhere), but not all. And the money is just a representation of wealth, the real wealth is the things we produce. So those imports and exports are what countries are actually concerned about, and what actually affect the economics of a country more than currency movement.