PeruFan wrote:When we arrived in 2002 the exchange rate was 3.45 soles to the dollar (or even better) I recall getting 3.61 one time. How do I figure how much money I am "losing" on the now lower exchange rate? (For example if I was getting 3.45 to the dollar and now I get 2.67, how much has the dollar dropped in value? percentage wise?)
You cannot tell how much the dollar has dropped in value from the exchange rates because the sol is also dropping in value, just at a slower rate. That is, even if the exchange rate had been constant from 2002 to the present you would still be able to buy less for your money now than in 2002.
To tell how much the dollar has lost in value you have to compare how much real goods you could have bought in 2002 with how much you can buy now.
According to the US government CPI Calculator
the dollar has lost about 26% between 2002 and 2012. However, the government lies about the statistics so this is a great underestimate of the loss.
A more realistic estimate of the loss in the value of the dollar is furnished by comparing how much gold a dollar bought in 2002 with how much it will buy now. You will find this graphed here. The Half-Life of the Dollar
This shows that the real value of the dollar has been falling by 50% every 4 years. In 2002 the dollar was worth about 0.12 grams of gold. Now it is worth about 0.02 grams of gold. In other words, in the last ten years the dollar has lost about 80% of its former value.
I think it is worth noting what this means for all those Peruvians who have been keeping their savings in dollars for the last ten years. It means that 80% of their savings has been sureptitiously expropriated by the US government. I am sure the US is very grateful for all the weath it has gotten from the Peruvian people in the last ten years. Personally, I would have prefered it if Peruvians had been able to keep all that wealth and use it to improve their own lives.