When a currency drops, the nominal price of hard assets in that currency generally rises.
In the absence of convertibility into specie, there must be a monetary rule to anchor the nominal value of paper currency.
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When currency weakens, nominal prices rise.
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In economic textbooks currency movements counter the differences in nominal interest rates between countries so that investors get the same returns on similarly safe assets whatever the currency.
Conversely, if a currency is cheapened, the nominal cost of everything rises.
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In normal circumstances, in order to cut real wages, devaluing the currency is more palatable than reducing nominal wages.
In terms of this decade, currency weakness has driven up the nominal prices of commodities ranging from gold to steel to oil, and investment has followed.
Unlike urban middle-class families on the main island of Java, these farmers have benefited from the collapse of Indonesia's currency, since that raised the nominal value of cash crops such as coffee, palm oil and rubber.
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The simplest way to do that is for the currency to strengthen, but the peg prevents nominal appreciation.
This may be especially true in a currency union, where the usual route - a nominal devaluation - is blocked.
Morgenson and Rosner would have a point if the housing mania had been endemic to the United States, but with housing in nominal terms having skyrocketed around the world, we must look to currency policy for the answer.
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Of course if the franc, yen or yuan are rising, then the nominal cost of imports necessary to make that which they produce declines in currency terms.
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The act of central bank money printing temporarily drives down nominal interest rates, while at the same time creating inflation and lowering the intrinsic value of the currency that is printed.
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