Exactly. Eventually the gap has to close. Exception would be if market dynamic continuously changes (e.g. crazy inflation)

Matthew,

Thanks for the question. I did think about this twice when I wrote it, but here’s my rationale – let me know what you think.

So let’s say I buy a bunch of High End cards from Europe and Japan (Beta rares, Old School, Power, etc.). If I am seeking those cards out to play with, then the buck stops there. But if I’m looking for arbitrage, it means I acquire these cards from abroad in order to buy list them. Thus, vendors start to have more buy list orders coming in containing these arbitraged cards. Eventually they drop their buy list prices as a result, leading to a decline in market demand and a drop in price.

In other words, I think the arbitrage opportunity is temporary. Eventually the gap closes – if the US Dollar truly strengthens significantly, MTG prices in US Dollar terms will ultimately drop.

What do you think? That’s for the challenge and keeping me honest, I definitely want to make sure what I’m putting out in writing holds water!

Sig

I don’t think this has consistent internal logic. It sounds like a stronger US dollar will attract cards from abroad as people capitalize on a fluctuating exchange rate. That’s fine.

Next though, why would a higher supply in the a local market (the US in this case) reduce the value over the long term?

It strikes me that the start of your argument depends on connected markets with different currencies, but the end of the argument depends on considering the US market in a vacuum. This is where the logic is not consistent I believe. What do you think?