Of course it helps that the Mighty Krugman happened to write an article of foreign currency exchange rates for the Library of Economics and Liberty. Although the name of the web site sounds suspiciously libertarian, but so far I haven't found any direct libertarian links.
Right off the bat, Krugman provided me with interesting historical information about foreign currency exchange - I'm amazed at how recently currencies have been exchanged in the open market - 1973.
Exchange rates between currencies have been highly unstable since the collapse of the Bretton Woods system of fixed exchange rates, which lasted from 1946 to 1973. Under the Bretton Woods system, exchange rates (e.g., the number of dollars it takes to buy a British pound or German mark) were fixed at levels determined by governments. Under the "floating" exchange rates we have had since 1973, exchange rates are determined by people buying and selling currencies in the foreign-exchange markets.Another fun fact - currency exchange traders sometimes refer to the UK/US currency exchange as "cable." Why? Because...
(a) Transatlantic Cable, a steel cable laid under the Atlantic Ocean in 1858, telegraphically linking the UK with the USA, enabling messages with currency prices to be transmitted between the London and New York Exchanges. The first such exchange rate to be published in The Times appeared in their issue of 10 August 1866.
Those traders sure love their old tyme slang.
Speaking of Krugman - he made another appearance with Rachel Maddow - yay!