[julianlam]

A currency exchange is a zero sum transaction. Whether it is US dollars or Philippine pesos makes no difference, the value stayed in-country.

When it gets sent overseas, it leaves the country and is spent elsewhere, so that is a loss in value for the originating country. The only value remaining would be whatever fee was charged on its way out.

[triceratops]

A currency remittance is potentially zero-sum. A currency exchange, that is changing one currency for another, is theoretically neutral.

[EliRivers]

I disagree.

If the US prints a million dollars, and some does a million dollars' worth of work in the US (or someone outside the US sends over a shipload of electronics in exchange for that big back of dollars) and moves that million dollars overseas, and those dollars never come back to be spent in the US, the US has gained. The US got a whole lot of work done, and did not have to give anyone goods or services in exchange.

The US has been doing this with a trade deficit for decades; giving people paper (or just numbers), which the US can make almost for free, in exchange for actual goods and services which people overseas happily send to the US. A trade deficit is free stuff. It's only a problem if the holder of all that paper comes back some day to spend it.

"When it gets sent overseas, it leaves the country and is spent elsewhere, so that is a loss in value for the originating country."

What value? The US did not give anyone goods or services, no goods from the US were transported to another country. What value was lost to the US? In the future, someone might come back with those dollars and exchange them for goods and services which they move outside the US. That would be a loss of value for the US, watching real goods and services go overseas.

[triceratops]

> In the future, someone might come back with those dollars and exchange them for goods and services which they move outside the US.

That's pretty much the only reason anyone has for taking any foreign currency.

[EliRivers]

I disagree. A lot of the US dollars that are held outside the US seem to be held not with an intention of spending them in the US, but out of trust that everyone will always agree they're valuable.

[triceratops]

USD has inherent value* because it can be exchanged for goods, property, and services in the US. Or to pay US taxes. The US has a lot of goods, property, and services that people want. US taxes are not a consideration for most people outside the US.

*Since most global trade is denominated in USD, and many countries use USD as their official currency, it can also be used to pay for goods, property, and services outside the US. But arguably it wouldn't have this global status if the US itself didn't have valuable goods, property, and services.