How is Foreign Exchange, Like Gold, Converted to the US Dollar?
I am studying finance in college and can’t quite get a grasp of foreign exchange. I know that things like gold, the Yen, and British Pounds must be converted to US dollars, but I don’t understand how it is done. One this conversion is done, what happens to the gold, yens, or pounds? Do they go back to their countries to be used again? If so, wouldn’t some end up paying twice of what they were supposed to? I would love to see a complete explanation of exactly how this conversion is done. Hopefully, we will cover this more thoroughly in class.
