How
would inflation in a foreign country affect the value of foreign
profits for a U.S investor?
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Economics
Howwould inflation in a foreign country affect the value of foreignprofits for a U.S investor?
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Before going ahead we have to understand what does inflation means Understanding inflation is often complicated by the fact that the cause and the effect are often muddled together in peoples minds due to the lazy way we often refer to inflation The effect of inflation is what people see when they go shopping and see increases in the general price of goods and services When the individual prices of just a few goods go up that is not necessarily inflation it could simply be a supply or demand issue But if many goods and services across the economy are rising in price we have what we call price inflation How Does Inflation Affect Foreign Exchange Rates Inflation affects every consumer business person and investor in some way or other Inflation is one of the key factors that affect consumer prices financial markets including Stocks Bonds and Forex As such it is important for consumers investors and traders to get a deeper understanding of what is inflation and what causes it How would inflation in a foreign country affect the value of foreign profits for a US investor This can be explained with the help of below mentioned 2 examples of companies like Walmart IBM American multinationals dominate the world stage and their reach is growing Ten years ago almost none of WalMarts sales came from outside the United States today that figure is 14 In the same period GEs foreign sales grew from 16 to 33 and Procter Gambles
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