Tuesday, July 21, 2009

Is the internet dollar higher in value than the American dollar?

Internet dollars is revenue that is earned from sales of goods and services from websites across the internet that is deposited into an internet bank like Paypal. By comparison internet money of $1 can have a higher value than $10 of local American dollars. Let us see how this is possible.

The cost of living in various countries across the world is different from county to country and the workers within a country are paid according to the cost of living standards within that country. Some of the factors that filter into the cost of living are housing cost, labor cost, interest rates on loans and investments (savings), and taxes. So a person that lives and works in Mexico is paid much less for the same work as someone that lives in New York City, in the United States. The lower wage rate adjusts the general price of merchandise, products, and services in that country. The person living in Mexico may pay $10 per month for a one bedroom apartment, whereas the same or equivalent one bedroom may cost $1000 in New York.

So by this analogy $1 in Mexico has the same value as a $100 dollars in New York. But let us assume that the person living in Mexico has an internet business and is paid in dollars into an internet bank with the funds available everywhere worldwide. If the person living in Mexico sells a product on the website for $10 he has actually earned the equivalent of $1000 of revenue of someone living and working in New York. Better yet if that person living in Mexico were to earn $1000 over the internet in a month, that person is now richer, and economically wealthier than someone living in New York City that also earned $1000 over a period of one month. The person in Mexico can now afford to live a lifestyle and buy merchandises which the person living in New York City cannot afford to live or buy. The person living in Mexico could literally be living like a King or Queen compared to the one living in New York City.

The internet is bridging the gap of the world economy and soon future generations will no longer find it necessary to travel to far off countries to find higher paying jobs. The internet technology at the present is tilting the economies of nations in favor of the third world countries until the third world countries and the first world countries reach an equilibrium standard of living; then the internet dollar across all nations will be equal.

At this rate foreigners that have travelled to far off lands for the sake of labor and jobs will find it advantageous to return to their countries and work for an internet corporation. The internet market is leveling the playing filed of the market place in such a way that the most advanced countries like Japan, United States, Germany, England, China, France, and most of the first world countries will find their economy on the decline while the economy of the third world countries are on the rise. This shift in the economies of the first and third world countries will eventually correct itself but unfortunately it will take a while for the third world nations to rise up to the standards of the first world countries, while the first world countries suffers the decline in value of real estate, pricing of goods, unemployment, and lower interest rates in loans and mortgages. The middle man shaping all these is the internet giant sitting in the market place which is now a permanent negotiator of our way of life.

Commercial real estate is on the decline in the first world countries as store owners close their shops for slow business. Residential real estate is on the decline as people either return to their homeland countries, relocate to different areas for job opportunities, or simply change their style of living from owning a home to renting a small apartment for a family.

For the first world countries to quickly adjust to what is happening on the market place, then rather than increasing the cost of living, they may have to rather lower the cost of living by lowering prices across the board from transportation, gas prices, real estate rental rates and all areas across the board. In so doing the gap between the first world countries will quickly even that of the third world countries and the internet dollar in the internet banks which will eventually rule the market place will quickly become even with the local American dollar.

A challenge plays!

Ken Nunoo

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