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I knew in my brain what the dollar to euro conversion rate is, but the reality hurts...

I knew in my brain what the dollar to euro conversion rate is, but the reality hurts...

Apr 29th, 2005, 09:19 PM
Join Date: Jan 2003
Posts: 6,019
well, I think the Mac index needs to tell us some other facts, too.

The US runs a very negative balance of trade. The nation with which we run the largest imbalance is with China.
We fuel our own problem by buying far more overseas than what we sell and also because we have no way to force the Chinese to unpeg the value of their currency from the dollar.

The Big Mac index also does not tell us that the US as a nation needs an infusion from overseas of $2 billion per day to fuel the debt.

Nor does it tell us the percentage of US debt that is held outside of the country.

So rather than complain about it, my suggestion is to try and understand some of the fundamental factors that make it so.

And while you are looking at the fundamental factors, take a look at trade tariffs. They, too, are a factor in the trade imbalance.

I for one have no idea how we turn it around in an orderly fashion.

Any suggestions?
bob_brown is offline  
Apr 29th, 2005, 09:19 PM
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Sorry, I don't agree with that idea that it costs Canadians and US the "same" numbers -- but yes, I'll agree it cost the same "actual amount". Starbucks coffee, Big Macs, and various other "staples" will cost more Canadian dollars in Canada than they cost US dollars in the US, but you are right that after conversion, they will cost the same "amount" -- not before. I find comparable restaurants and hotels in "comparable" cities in the US and Canada may cost more Canadian dollars, but once I've paid in US dollars, the total amount comes out about right.

I'm heading to Vancouver, Whistler, Seattle, and Portland in July. The hotels in Canada are way higher in "numbers" than I'd pay in US dollars, but since they will actually cost me fewer US dollars than Canadian, they come out comparable. Even then I'm still paying more for our Canadian hotels than I am for my US hotels, but if their rates were in US dollars instead of Canadian, I wouldn't even consider them.

Yes, thank you. I'll keep laughing.
Patrick is offline  
Apr 29th, 2005, 09:28 PM
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Patrick: So your hotels in Vancouver and Whistler cost more than in Seattle and Portland. Perhaps a better comparison would be for comparable hotels in San Francisco and Aspen or Vail.
laverendrye is offline  
Apr 29th, 2005, 09:33 PM
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More on prices, is it just me or has anyone else found hotel and/or apt/villa rental prices less recently than say 5 years ago? I've noticed it, I think some place are adjusting to bad exchange rates and want the business however the big cost of traveling Europe and non-tourist-adjusted is restaurant costs. For our trip in June we actually have nice accomodations that are less per night than what we expect to pay for a dinner. Of course anything better, restaurant/cost wise, would be a welcomed treat, but planning for the worst
Traveler863 is offline  
Apr 29th, 2005, 09:37 PM
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OK, my hotels in Whistler and Vancouver cost more than I spent at fantastic hotels in San Francisco and Aspen last year.

But let's face it, Whistler is no Aspen, and Vancouver is no San Francisco, even though their hotels still cost more "monetary units" than comparable hotels in those cities. At least in my experience.
I still think comparing Vancouver to Seattle is a much more logical comparison that Vancouver to San Francisco, by the way -- regardless of the price of hotels. Do you also compare Toronto to New York City?

And a Starbucks Venti is not under 2 Canadian dollars -- at least it wasn't last time I checked.

Patrick is offline  
Apr 29th, 2005, 09:46 PM
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Alright, already, geez.
Traveler863 is offline  
Apr 29th, 2005, 09:54 PM
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Early on in our recent trip to Italy we decided to just pretend dollars and euros were the same...otherwise we were constantly calculating and fretting. I found that thinking about it didn't make me spend less, I just worried more. Now that the bills have come in I think it was completely worth it, and I wouldn't have changed a thing!
NatalieM is offline  
Apr 29th, 2005, 10:09 PM
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I could care less what the exchange rate is nor do I let the exchange rate dictate my travels. In 10 trips to Europe over the last 10 years the dollar has been all over the place. Yet, I've had 10 great trips. You're on vacation in Europe. Works for me.
rj007 is offline  
Apr 29th, 2005, 10:16 PM
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I think the reality is what value you get for what you spend, I have had to check some hotel possibilities for family relations who are wanting to do a trip overseas from Asia.
They can get easily a good hotel in the USA within USD 100, even the Hilton at Boca Raton is only USD 94, the Radisson in Denver USD 87, good 4 star in Singapore about the same, in Buenos Aires about USD 65 for nice a/c hotel, in Dubai USD 75 for good hotel, Kuala Lumpur USD 39 or 45 for 4 star, in Brisbane Australia they can budget USD 75 and find very good hotels and in tourist beach areas they can budget USD 50 easily, now the problem is what type of hotel will you get in Europe for USD 100 or less, yes, sure, you can find accommodation but will it be a/c, tv, mini-bar, room service, swimming pool, perhaps gardens, lounge, entertainment etc etc ? or is your USD 100 going to get you a 2 star/1 star small or a B&B place with a small room and lack of facilities. Now, as someone reminded me when we were tentatively thinking of a budget Italy trip, what about food, transport, again people will say you can but bread and things from a small store and eat it on a park seat, you can try walking between places.
It all depends what you want from the vacation and if you are prepared to pay the costs for average or low accommodation or not.
It is all about value, better to pay $100 for a real nice place than $80 for a loussy place, I think most would agree it is 'what you actually get for your buck' that's important.

JamesA is offline  
Apr 29th, 2005, 10:23 PM
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if you've decided to go, then you've already budgeted so much money. the flux of the euro may result in a +/- of a few percent...not very big in the scope of things. $2000 and $2100...not much difference in the end.

enjoy. try to find ways to cut cost w/out cutting back on enjoyment.
ucsun is offline  
Apr 29th, 2005, 10:24 PM
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Traveler863, where you are finding such accommodations? What price range are you finding? In my case, it would have to be 20-25 Euros or less to qualify as less than a dinner cost .
WillTravel is offline  
Apr 29th, 2005, 10:58 PM
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Patrick - I am a Canadian and I have to say that you are still way off! The exchange rate right now is about $1 US = $1.25 CDN. I find that when I travel to the US, after exchange, things are roughly the same price (alcohol is a big exception, because it Canada it is taxed at a much higher rate). However, I think you would find that salaries in the two countries are pretty much on par. That is, say the average University graduate finds his/her first job at around $40K per year (in their respective currencies). If that is the case, take this one step further. Say that a prospective traveller to Europe from each country has managed to save 10% of their salary to travel ($4000). If 1 EURO costs $1.29 US or $1.62 CDN, how then is the Canadian traveller in the same boat as the American one??? The Canadian traveller obviously faces higher costs than the American!
The_Pixies is offline  
Apr 30th, 2005, 03:29 AM
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Patrick: The Cdn-US dollar comparison is meaningful in the same way that the USD-euro one is meaningful: by historical comparison.

The Cdn dollar for years in my youth was pegged at 92.5 cents. There was even an election in which the government s exchange rate policy was central -- Does anyone out there remember the phoney Diefenbucks that the Liberals printed...

Once our currency was floated it fell then rose around 1976, when you had a recession and we did not. Then it started falling until it reached a painful 63 cents US. Now it is back above 80 cents -- first time in years.

Of course, the fluctuations reflect many things about the underlying state of our very, very export-oriented economy. No-one here is saying our dollar is over- or under-valued. But when you watch the year-to-year changes and realize domestic prices are not changing all that much, sometimes it feels painful.

It was different when inflation was rampant and you could not meaningfully compare *real* prices in the 2 countries over time, without a computer (which no-one had back then)....
tedgale is offline  
Apr 30th, 2005, 05:00 AM
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Listen, folks, you can think that a Euro is just a Euro and spend as you wish. Wait until that Visa bill arrives with that extra nasty 3% added. Europe is just outrageously expensive plain and simple!
Western Canada is much more expensive than the East. From the province of Quebec to the Atlantic provinces, you can find charming B&B for well under $100 Canadian. Good luck trying to find anything comprable to that in Yankee Doodle Land!
SoeurAnneLafleur is offline  
Apr 30th, 2005, 05:37 AM
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Take the long view. Some years the dollar is weak and we pay more. Other years it's strong and Europe is a bargain. Over many trips all these fluctuations will amount to about zero.

Besides, a big chunk of your trip's cost is not affected by the exchange rate. Airfare is about 1/4 of your total expenses, but since you pay that in dollars the exchange rate has no effect on it.

And if money is that important, then there are plenty of way to economize. Stay in a 2-star hotel instead of 3-star. Or picnic a little more often rather than dine at fine restaurants every lunch and dinner. Get a 2nd class rail pass instead of a first class one. Or simply shave a day or two off your trip entirely.

A weaker dollar does suck, but there's no need to let it get you down.
Edward2005 is offline  
Apr 30th, 2005, 06:54 AM
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Hi Julie, I hear where you're coming from. We're budget travelers too - well, ok, to some extent. We did pay a whopping $104 per room in Budapest for a couple of nights. I have to admit I'd feel a little gut wrenched if we were heading back soon too, but I guess it's like anything financial. Watching stocks do better or worse, other investments. You hope for the best and prepare for the worst? I don't know any other way to get past the mentally gnawing part of suddenly paying X% more for the exact same thing.

I know you've already been to plenty of other places in the world but for those who haven't, it seems like a great time to break out and see some of the rest of the world (if a person ever really plans to). SE Asia I think is next for us. Airfare will be a P.I.T.A. but I think the rest should be pretty inexpensive.

The Canadian to US dollar debate doesn't sound all that convincing from either side. The cost of hotels in various cities has nothing to do with how much disposible income the locals have and neither does the exchange rate. All that really matters is how many snarks (the int'l currency of generally non-productive internet debates) people in your area have after taxes and the costs of a uniformally measurable standard of living are taken out. In other words, some measurement that really doesn't apply to anyone. One of our biggest costs arguably (any thing NOT arguable around here?) is housing costs. I bet mine is much lower than people living in other parts of the US and probably Canada. Doesn't mean that the result is that I have more leisure income. So a CA dollar doesn't buy as many Euros - what's important is how many of them you have after your bills are paid.
Clifton is offline  
Apr 30th, 2005, 07:06 AM
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Actually I'm always sort of amazed at how cheaply you can find a hotel in, say, Paris or Rome compared with a comparable city here. While I'd PREFER to stay in a $150/night hotel in Paris I can't imagine wanting to stay in a $150/night room in Manhattan!
wliwl is offline  
Apr 30th, 2005, 07:28 AM
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Hi all,

May I suggest that the more important question is "How many hours do I have to work to pay for what I am buying"?

I will be going to Paris where a pleasant hotel room with continental breakfast will be $160. My mother will be going to NYC at about the same time. Her "budget hotel" costs $189 with CB.

A 4dr compact car for 2 weeks in SW France will cost $500. A similar car for 2 weeks in the SW US, rented from the same company, is $515.

Train travel(TGV) from Bordeaux to Paris will be $33. A similar train from Richmond to Boston costs anywhere from $70 to $100.

We can eat very well in Paris (appetizer and main course or main course and dessert) for about $65 for two with a bottle of wine. Even in my little town in GA, it costs about the same. (Terrific markup on wine.)

Admission to the Musee d'Orsay is $10. The Met asks for a $15 contribution.

I think that those of us who remember the euro trading for under a dollar should think of that as a terrific bargain, rather than the norm. (The euro was first priced at $1.18)

ira is offline  
Apr 30th, 2005, 07:42 AM
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This is for the OP, julies.

We are budget travelers too and that is the only way we can travel as much as we do.
This is what I do - and you might want to try it.
When I put my entire trip down on the spread sheet - I fix it so that the transfer rate is higher than current. EG: when I did it - I set the convert rate at 1.33 Euro per $1.00. Then I just plugged in all the prices and the spreadsheet gave me the total in Euros.
However! Good news! Now it is less than I had estimated, so in some weird part of my brain, I feel like we are actually saving some money.

The spreadsheet does help me not agonize over every expenditure. That's just what it's going to cost - and I needed a final figure.

Hope this is helpful to you.

Carol / Brahmama
Brahmama is offline  
Apr 30th, 2005, 01:31 PM
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This is starting to get silly. My point is that people are way off when they keep saying that most things cost the same "number" of US Dollars as Canadian dollars. Not true. Period. Wrong! End of story.

If that were true then please explain why so many things even list prices two ways. Greeting cards, books, and software for starters. The prices are listed in Canadian and US. More Canadian dollars but the actual amount comes out about the same! It is wrong for the Canadian to insist that the greeting card at $4.50 Canadian is costing him more than if he were in the US buying it for $3.50. (Sorry, not sure if those actual figures are right, but I HOPE you understand what I'm trying to make clear here -- it just seems too difficult for some people who keep insisting the prices are the SAME in both countries).

Compare a gallon of milk in a grocery or a name brand TV in the same type of store in Canada and the US. You will NOT find them priced the same in the two different currencies. I can't get into the argument about comparing salaries because there are too many variables, but I do know of Canadians who were transferred to the US where they took a "cut" in their pay in actual number of dollars, but felt it was equal after the conversion.

My point remains -- just like the euro, people should stop thinking that if something costs 60 US dollars it should also cost 60 euro OR 60 Canadian dollars. All three are different currencies.
Patrick is offline  

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