Can Currency Pair Go Zero ? | Forex Factory

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Can Currency Pair Go Zero ?

  • #1
  • First Post: Mar 22, 2007 1:25pm Mar 22, 2007 1:25pm
hello ..i have a big question MAYBE .. or funny question

- em can currency pair go to zero ..
examples .. GU NOW 1.9644 then 10 years or 20 years .....
GU go to 0.0010 or 0.0000

It can be ???? yes or not give me u reason with fact... thankzzz
  • #2
  • Mar 22, 2007 1:36pm Mar 22, 2007 1:36pm
nuclear war??
  • #3
  • Mar 22, 2007 1:42pm Mar 22, 2007 1:42pm
Quoting MAKANFOREX
hello ..i have a big question MAYBE .. or funny question

- em can currency pair go to zero ..
examples .. GU NOW 1.9644 then 10 years or 20 years .....
GU go to 0.0010 or 0.0000

It can be ???? yes or not give me u reason with fact... thankzzz
You don't have to worry about that, if the currency is near zero, the OTHER currency (remember, we trade with currency pair) will now be worth millions
  • #4
  • Mar 22, 2007 1:45pm Mar 22, 2007 1:45pm
confederate currency
  • #5
  • Mar 22, 2007 1:48pm Mar 22, 2007 1:48pm
Quoting MAKANFOREX
hello ..i have a big question MAYBE .. or funny question

- em can currency pair go to zero ..
examples .. GU NOW 1.9644 then 10 years or 20 years .....
GU go to 0.0010 or 0.0000

It can be ???? yes or not give me u reason with fact... thankzzz
Conceptually or technically? It makes a huge difference...
  • #6
  • Mar 22, 2007 1:54pm Mar 22, 2007 1:54pm
Quoting Darkstar
Conceptually or technically? It makes a huge difference...
can u explain what that difference ?? then what u think about my question ?? . thankz
  • #7
  • Mar 22, 2007 2:00pm Mar 22, 2007 2:00pm
Quoting turbokaos
confederate currency
what it mean ?
  • #8
  • Mar 22, 2007 2:07pm Mar 22, 2007 2:07pm
Quoting turbokaos
confederate currency
this stuff is worth allot to collectors now..
Keep it simple stoopid....
  • #9
  • Mar 22, 2007 2:08pm Mar 22, 2007 2:08pm
Quoting MAKANFOREX
hello ..i have a big question MAYBE .. or funny question

- em can currency pair go to zero ..
examples .. GU NOW 1.9644 then 10 years or 20 years .....
GU go to 0.0010 or 0.0000

It can be ???? yes or not give me u reason with fact... thankzzz
Just think - BOOM BOOM - but if that happens the spot price of the curreny wont really matter.
Keep it simple stoopid....
  • #10
  • Mar 22, 2007 2:10pm Mar 22, 2007 2:10pm
Quoting MAKANFOREX
can u explain what that difference ?? then what u think about my question ?? . thankz
Technically no currency can ever drop to zero because of the way prices are calculated. Take USD/JPY for example. The USD is always valued at 1. Even if the value of USD drops, in relation to JPY it remains 1 forever.

Let’s say that 1 USD is equivalent to 118 JPY. If the value of USD drops precipitously, the number of yen it is capable of purchasing is the only figure that drops (say it moved to 100). If it fell far enough at some point it could achieve parity with JPY (or 1 usd = 1 jpy). But this still isn't a floor of any sort. A continued price decline would simply change to a decimal value (ie- USD/JPY would be priced at 0.9999). Because decimal values can be infinitely small, you can technically have the value of the dollar drop forever with no floor.

If the JPY value were to drop precipitously it would just work in the opposite direction. 118 could rise to 999999999999, but that still wouldn't be any kind of cap. Numbers could be infinitely large so there is no hard limit on the relative value.

So technically no, a currency can never really have zero value. Were either of these scenarios to occur, the actual purchasing power would be so low as to cause political revolution. This is the conceptual part. When a currency is worth so little that its users abandon it for something better, it has lost all value. It is the termination of use that eliminates all value, not the current price thereof.
  • #11
  • Mar 22, 2007 2:24pm Mar 22, 2007 2:24pm
Quoting Darkstar
Technically no currency can ever drop to zero because of the way prices are calculated. Take USD/JPY for example. The USD is always valued at 1. Even if the value of USD drops, in relation to JPY it remains 1 forever.

Let’s say that 1 USD is equivalent to 118 JPY. If the value of USD drops precipitously, the number of yen it is capable of purchasing is the only figure that drops (say it moved to 100). If it fell far enough at some point it could achieve parity with JPY (or 1 usd = 1 jpy). But this still isn't a floor of any sort. A continued price decline would simply change to a decimal value (ie- USD/JPY would be priced at 0.9999). Because decimal values can be infinitely small, you can technically have the value of the dollar drop forever with no floor.

If the JPY value were to drop precipitously it would just work in the opposite direction. 118 could rise to 999999999999, but that still wouldn't be any kind of cap. Numbers could be infinitely large so there is no hard limit on the relative value.

So technically no, a currency can never really have zero value. Were either of these scenarios to occur, the actual purchasing power would be so low as to cause political revolution. This is the conceptual part. When a currency is worth so little that its users abandon it for something better, it has lost all value. It is the termination of use that eliminates all value, not the current price thereof.

nice thankz bro
  • #12
  • Mar 22, 2007 4:17pm Mar 22, 2007 4:17pm
Quoting Kurka Fund
this stuff is worth allot to collectors now..
LOL maybe, I hope they don't try and pay their mortgage with it
  • #13
  • Mar 22, 2007 4:22pm Mar 22, 2007 4:22pm
Quoting MAKANFOREX
what it mean ?
it just a currency that has gone to zero for what ever reason.

same as Spanish peseta, becasue they use the Euro now
  • #14
  • Mar 23, 2007 5:04am Mar 23, 2007 5:04am
Quoting turbokaos
it just a currency that has gone to zero for what ever reason.

same as Spanish peseta, becasue they use the Euro now
bro can u give what spanish peseta price before they use the euro ..or other currency about that ...emmm how about trader who was open post at peseta currency ??.. thankz
  • #15
  • Mar 27, 2007 3:47pm Mar 27, 2007 3:47pm
I think a currency can approach but never run to zero (what mathematicians call an asymptote). For example, Zimbabwe is experiencing hyperinflation at the moment, meaning that every day one US dollar buys exponentially more of the local currency and one Zimbabwe dollar is worth an amount in US dollars that gets closer and closer to zero every day (but can never reach it).

What this means in practical terms is that the local currency becomes virtually worthless for foreign exchange purposes, but may still be useful within the country. In Cambodia, for example, there's a dual-currency system in which locals do business in Cambodian riel (about 4,000 to the dollar) and tourists pay in US dollars. If you can get the 'local price' for a meal, it ends up costing a negligible amount if you convert the riels into USD.

Confederate currency was issued by the Confederate States of America (i.e. the South) during the Civil War to finance the war effort. Its value was based on the future ability of the Confederacy to redeem it for gold, so as confidence in the Confederacy's chances diminished the value of the currency fell, meaning that it was virtually worthless by the end of the war. Limited access to currency printing presses meant that the notes were of poor quality and thus easily counterfeited, which also devalued the currency. A similar phenomenon occurred during colonial times, when the 'Continental Currency' issued by the rebels saw its value drop during the Revolutionary War.
  • #16
  • Apr 20, 2007 7:54am Apr 20, 2007 7:54am
a pair currency can't go to zero because you'll have to be dividing by zero eg: for usd/jpy to equal zero usd value haas to be zero ie: that currency no longer exists
  • #17
  • Apr 20, 2007 8:03am Apr 20, 2007 8:03am
Quoting Darkstar
Technically no currency can ever drop to zero because of the way prices are calculated. Take USD/JPY for example. The USD is always valued at 1. Even if the value of USD drops, in relation to JPY it remains 1 forever.

Let’s say that 1 USD is equivalent to 118 JPY. If the value of USD drops precipitously, the number of yen it is capable of purchasing is the only figure that drops (say it moved to 100). If it fell far enough at some point it could achieve parity with JPY (or 1 usd = 1 jpy). But this still isn't a floor of any sort. A continued price decline would simply change to a decimal value (ie- USD/JPY would be priced at 0.9999). Because decimal values can be infinitely small, you can technically have the value of the dollar drop forever with no floor.

If the JPY value were to drop precipitously it would just work in the opposite direction. 118 could rise to 999999999999, but that still wouldn't be any kind of cap. Numbers could be infinitely large so there is no hard limit on the relative value.

So technically no, a currency can never really have zero value. Were either of these scenarios to occur, the actual purchasing power would be so low as to cause political revolution. This is the conceptual part. When a currency is worth so little that its users abandon it for something better, it has lost all value. It is the termination of use that eliminates all value, not the current price thereof.
Darkstar,

Is it true that you are the original author of Wikipedia? LOL
  • #18
  • Apr 20, 2007 9:05am Apr 20, 2007 9:05am
Have you guys never seen those pictures of kids in the street playing with mountains of Deutchmarks in the 1920s. Thats about as close to zero as you can get!http://images.google.co.uk/imgres?im...%3Den%26sa%3DN
  • #19
  • Apr 21, 2007 10:28am Apr 21, 2007 10:28am
hyperinflation. google it.

a currency can never lose its value, only devaluation of the currency. A million (even billions, infinity) of X Dollar to 1 B Dollar.

Sorry if it sounds complicated, am not really good in explaining :
  • #20
  • Apr 21, 2007 10:10pm Apr 21, 2007 10:10pm
Quoting MAKANFOREX
hello ..i have a big question MAYBE .. or funny question

- em can currency pair go to zero ..
examples .. GU NOW 1.9644 then 10 years or 20 years .....
GU go to 0.0010 or 0.0000

It can be ???? yes or not give me u reason with fact... thankzzz

Alien attack.....
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