If you’ve ever wondered why a cup of coffee costs so much in Zurich but so little in Hanoi, or why a currency can lose half its value in a few years, you’re already thinking about the topics in this chapter. We’re going to explore the deep, long-run links between money, inflation, interest rates, and exchange rates. By the end, you’ll understand why, over long stretches of time, currencies tend to move in line with inflation differences – and why they often don’t in the short run.