Dollars are everywhere. U.S. dollars, we mean. It’s the #1 currency of the world. It’s very common that other currencies are quoted in terms of USD.
So...how much is a dollar worth? If everyone else’s currencies are being compared to the U.S.’s, what do we compare the USD to?
Well, we just compare the USD to...everyone else. The U.S. Dollar Index (USDX) measures the value of the dollar relative to a basket of foreign dollars. This index is trademarked and published by ICE, a.k.a. Intercontinental Exchange, Inc.
The basket is a weighted geometric mean relative to the U.S.’s biggest trading partners: the euro, Japanese yen, pound sterling, Canadian dollar, Swedish krona, and Swiss franc. Since the Euro covers the eurozone, its weight in the basket is over 57%.
That’s how economists know if the U.S. dollar has gained value (the index goes up) or lost value (the index goes down). USDX took the helm when the Bretton Woods system collapsed. The Bretton Woods system was the world’s attempt to manage the exchange rate between the world’s leading currencies when the dollar once got too strong...but it just didn’t work out. No hard feelings, guys.
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Finance: What is a Pension?31 Views
finance a la shmoop. what is a pension? well it rhymes with tension, and likely
for good reason. if you're a teachers pension or a fireman's pension or [person wearing dark glasses writes something down]
another state employees pension that's backed up by a state that's going
bankrupt. Hi, California, Hi Illinois. well we're looking at you. all right people
well a pension is another term for a retirement fund. but what's special about
a pension is that the employer essentially forces you to put away money
for your retirement and then they invested for you.
how nice. or at least be sure you invest it well on a salary of 75 grand a state [gambling table shown]
employed ditch-digger might get a contribution of say 10 grand a year into
her pension, and that's each year 10 grand of forced savings for as long as
she you know digs ditches for the state. and in some states where the unions are
strong in the governing financial knowledge is weak the government
guarantees a minimum financial return on the pension investment made on behalf of
the employees. that is in California for example the state guarantees a 10% per
year return on their invested pension savings. if the invested return like [equation]
investing it in Wall Street and stocks and bonds and private equity funds and
all that stuff well if that invested return is less than that number less
than that 10%, then the state rights to the pinch and a check to cover the
incremental difference. yeah it's a huge Delta and it's well pretty much why you
a Californian Illinois you're going bankrupt remember. Jesus Saves
but Moses invests. [ Moses, holding stone tablets glares and demands interest]
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