xyz123

texastrips....please explain yourself.....the euro has some exception places of weakness besides Greece...Spain and Portugal come to mind.....you may well be right but I don't think it's an automatic!

Texastrips

If Portugal and Spain go into the tank, we're toast. Spain is in the infamous too big to fail category except as I heard several economists discussing this week, nobody has the resources to bail out Spain a la the Greek bailout currently under discussion (and the cause of vast turmoil in Greece, in the Eu and in world financial markets). Heaven help us in that event...

xyz123

....actually perhaps what all this means is that Britain made the right decision not to embrace the euro as it means giving up too much of your ability to control your own problems and instead you have to give it the eu Central Bank.

logos999

Less than a zillion options today. They're out of gold bullion.
At leat for now. Wonder how that could happen..

travelgourmet

<i>They're out of gold bullion. At leat for now. Wonder how that could happen.</i>

Easy. There is a sucker born every minute. Gold is barely better than paper and has minimal intrinsic value (mostly as a conductor). As Warren Buffet said:

"It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

<i>BTW...it went down a tad more today and is currently at $1.26281....but is this really a low?</i>

No, it isn't very low. Many people that are actually currency traders (unlike logos, who only plays one on the internet) are betting on parity. Once people smarten up and recognize that ALL of the eurozone countries have massive off-the-books liabilities, due to their welfare states and lack of population growth, I wouldn't be surprised to see the euro remain at par or below for the long-term.

<i>actually perhaps what all this means is that Britain made the right decision not to embrace the euro as it means giving up too much of your ability to control your own problems and instead you have to give it the eu Central Bank.</i>

Absolutely the case. None of the stronger economies should have ever joined the euro, as the euro is simply nothing more than a discount scheme for the debt of the weaker economies.

norrisken

travelgourmet,
Wow, informed not emotional.

logos999

LOL

WillTravel

I certainly care about the exchange rate when I visit. For example, I had one trip to London where the exchange rate was $2.60 CAD to 1 GBP. Now it's $1.55 CAD to 1 GBP, but alas, I have no trip to London planned. A 5-pound purchase would be $13 under the old exchange rate, and $7.75 now, which is rather significant, if you are instead talking about 500 pounds rather than 5.

Nevertheless, I think far more significant factors, in terms of trip planning are how secure one's job is, and how one's investments are doing.

Even if I could get cheap holidays forever, I really don't want Europe to suffer a catastrophically bad economy. On the one hand, I admit that I like how inexpensive many things are in Argentina and Mexico when I visit, but I hate that this reflects the fact that so many people are in poverty and at the edge of financial disaster (or in it).

logos999

Will, I'd go shopping for the essentials today and stop listening to those uninformed people that just repeat what they're told on TV. It's high time.

travelgourmet

logos - Have you ever heard the story of Chicken Little? You've been telling everyone that the USD is doomed for so long, that nobody listens anymore. Perhaps the reason some folks listen to what is reported in the news is because those experts actually know more than you? Last I checked it was Soros that made billions in currency trading, so you'll forgive us if we take his word over your apolcalyptic ranting.

logos999

>us
It's only you, noone else. Most others actually realize what is happening. Again, like two years ago, during these days the risk for what they would call "systemic failure" is extreme.
Look and listen how they react and what happens next week.
The times of the USD are over, what's next? Who knows.

Texastrips

Uk has huge liabilities too in terms of debt - not being on the euro hasn't saved the gov from the same dumb decisions (which go far beyond the welfare state and population issues) otherwise that created the debt burden elsewhere.

I fear the euro may go to par for a long time for the reason travelgourmet notes ("All of the eurozone countries have massive off-the-books liabilities and alas it will be because of a prolonged" - except plus the UK which has one of the worst public debt rations) and as I said yesterday there won't be anything to cheer about if that happens, even for holidaymakers.

daveesl

Of course it dropped. As I wrote several years ago you can use the "Dave Currency Valuation Projection System" to determine when to purchase euros.

To remind you, here is how it works. If I am going to Europe or if I am in Europe, then the dollar:euro rate will be terrible for those exchanging dollars for euros.

If I have just returned from a trip, then the value of the euro will drop like a rock, usually to multi-month or even multi-year lows.

This also applies to the Pound and Yen.

It is a perfect system and works every time.



dave

xyz123

I am not an economist but it would seem to me what we have here is a clash within the eu itself between strong economies (if there are any in the world today) and weaker economies...what is good for the goose may n ot be good for the gander. There are many different issues involved within the eu itself and bnasically Germany and France thought that together they could impose their monetary policies on the rest and by sheer numbers this would lead to the euro becoming the world's reserve currency and the demise of the US currency in that regard. But say what you will about the US system, at least it basically speaks with one voice rightly or wrongly and the US is free to make decisions as to what it thinks is best for itself (which of course might be an imposition on the rest of the world but you always have to look out for yourselves first despite what the current US administration might want you to think). I know the UK economy is not great right now, I understand that. But at least they're in a position to make whatever decisions they think are best for Britain and not have to worry about what they think in Brussels or worry about what is happening in Athens or wherever (although obviously they, just like the US, cannot divorce themselves from the problem completely).

Having said all that, it seems that the feeling the days of the US dollar as the world's reserve currency being over are somewhat premature. That is not to say it won't happen in the future (personally the way things are going, the Yuan or the rupee might end up being the world's reserve currency)...what will be interesting in all this is the eventual stabilization of just where the euro ends up (I think at par is a good guess), where the pound will end up ($1.20?) and of course what these figures become are important, but only marginally so to tourists.

sap

I am not an economist either, but it seems to me that there are some incredibly bright people on Fodors. Logos, xyz, travelgourmet, you are all delightfully insightful and entertaining forecasters/armchair quarterbacks. Unfortunately, as intelligent as you all may be, Dave's perfect system could really be the most accurate! (No relation to Dave Barry, I presume.)

Eurocentric

We have seen a wide range of values over the last few trips, from nearly $1.60 to $1.27. A year ago it was about in the middle. Going in September again, so I hope it stays down.

We always bring back several hundred euros and use them to get there the next trip. (Usually much of it from security deposit return on an apartment.) Sometimes we win, sometimes we lose. If it stays low or falls further, I think we'll double down this time. At least we won't be paying some unjustified bank fee.

logos999

Mrs. Merkel was on TV yesterday ("Europaforum"), telling people to prepare for the crash of the dollar. She was meeting with Mr. Harper in Berlin.
Never have seen an interview where she was so blunt.

What will they be telling us tonight?
Going to be fun watching markets tomorrow.

logos999

And that Germany will pay for Europes debt until the end.
Good we still have some industries and production left.
Will Schengen still exist? I doubt it.
Will common Americans still be able to travel to Europe?

logos999

Domino Day
http://www.pauli-it.de/PIT/domino.jpg

CarolA

Fair warning... I leave on May 24th. Get those Euros before the increase.

And to the EU bankers... Hang on. I am coming.. That always seems to strenghten the Euro