It's official: Europe is too expensive.

Old May 22nd, 2008, 07:08 PM
  #1  
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It's official: Europe is too expensive.

Just got back from a trip to Greece (report forthcoming: Santorini, Mykonos, Athens) and after more than ten years of annual or semi-annual European travel, the Euro has shown us the door.

The wife and I will be looking into South American destinations, which doesn't excite us nearly as much as Europe, until something DRASTIC happens with the exchange rate.

It was fun while it lasted, though.
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Old May 22nd, 2008, 07:25 PM
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If you loathe the Euro, what about British prices?

I could pay, I guess, but I won't.

Continental Europe seems a bargain by comparison.

I was spoiled by the '70s, I admit: the L. at $1.55 Cdn. in '76, for ex.

We actually -- I can't believe this -- talked of buying a freehold C. 18 house in Westminster in the early '80s.

Westminster!

And I was still in my early 30s......

No, haven't given up yet on Europe -- because it's STILL cheaper to travel in France than at home. Incredible but true.
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Old May 22nd, 2008, 07:26 PM
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I'm sorry, but it's not the fault of the EU. You need to look closer to home. Hint: 1600 Pennsylvania Ave. and Congress.
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Old May 22nd, 2008, 07:37 PM
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We need to look much closer to home than Washington. How about our own homes? How about Americans actually producing something, and then actually buying what our fellow Americans produce? If we did actually produce something, with the low dollar maybe we could turn some euros into dollars. Instead we flood Asia with our dollars for cheap plastic junk. We are greedy, cheaparse consumers who fill message boards with whiney posts about $15 for a checked bag, and "I need cheap this or that" like it's a sin that someone else should make money. Things won't change until Americans see the connection between being a consumer and HAVING A JOB!! That felt good.
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Old May 22nd, 2008, 07:47 PM
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And the price of almost every consumer good is impacted by the rising price of oil.
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Old May 22nd, 2008, 08:47 PM
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TravMimi, I bet that did feel good and I was happy to read it. Yes, but you forgot something when you said, "Instead we flood Asia with our dollars for cheap plastic junk." That falls apart shortly.

It's time to re-educate ourselves on what a quality product looks like. It's time to just say no to this crap, it's worthless and in a couple of years it will be landfill. Disgraceful

But back to Europe. Seems to me that money is a cyclical thing. Now, it's Europe's turn and good for them. They've found a way to grow well. And I've had many nice European vacations at a good bargin. I look forward to more, even if they aren't quite the deal they've been in the past.
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Old May 22nd, 2008, 10:07 PM
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ciaony -I'm off to Italy in a week and Greece (for the first time) in september - I'm afraid I'll be subsisting on olives and house wine ( and scooping appertivo snacks into my back pack). Maybe i'll finally lose those 15 pounds I keep trying to lose.

The upside to this financial squeeze is that I'm taking stock in what it means to travel. It's all wonderful and fun to be somewhat oblivious to $$$ when the exchange rate is favorable but isn't travel more about the surroundings and other stuff. To paraphrase Barbara Kruger - I travel therefore I spend - maybe somewhat misguided.

I have some friends who are traveling around Central and South America for a year - very cheaply (and I mean cheaply). I admire that - and wish I could do that - but their traveling in a way that many of us never would consider.

I'm all for exploring other parts of the world besides Europe - new unfamiliar experiences.
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Old May 22nd, 2008, 10:13 PM
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I could have written that, travmimi . Great to see someone posting the simple facts here!
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Old May 22nd, 2008, 10:58 PM
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I suspect some of the reasons posted above for the decline of the US$ are a bit specious: Simultaneously with the USA, Australia has also indulged in flooding Asia, particularly China, with A$ for cheap imports, but the value of the A$ has remained constant with the € over the past several years. In contrast, whereas the A$ was once worth less than US50c, it's now near parity with the US$ and likely to move above that mark shortly. It is probable that US internal credit policies, as reflected in the sub-prime crisis, are the main causes of the US$ devaluation, though the ongoing financial cost of the war in Iraq can't be helping either. However, whatever your view, Robert2533 is certainly correct: "It's not the fault of the EU".
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Old May 23rd, 2008, 02:26 AM
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I feel your pain. I was in Paris last week and couldn't believe how expensive it was - even allowing for the crappy exchange rate (£1 =€1.2).

Paris is now more expensive than London.
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Old May 23rd, 2008, 02:50 AM
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TravMini: it might have felt good, but it isn't true.

The US retains one of the highest per capita incomes in the world (excluding extremely small states like Luxembourg or oil-rich countries like Norway or Qatar), far outpacing even the EU.

The US must be producing something. It may be financial derivatives rather than filing cabinets. It may be biotech drugs rather than bobby pins. It may be intellectual property rather than cars. It may be engineering expertise rather than electrical wiring. But the numbers don't lie by that much.

Even if per capita income in the US is overstated by 23%, it would only bring the US level with the UK and still above France and Germany.

If the US isn't producing anything, then what does this say about the EU?
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Old May 23rd, 2008, 02:53 AM
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Why are people attacking this OP? Europe is expensive plain and simple. For many they will chose to consider alternate destinations other that Europe. That is fine. For others a trip to Europe can still happen. The time spent can be reduced and the types of accomodations can be reconsidered.
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Old May 23rd, 2008, 03:23 AM
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>financial derivatives
Thus creating money out of thin air and sending it abroad in exchange for goods. That's also a form of production... It's a redistribution of wealth without work and (unfortunately) one day will be the nail in the coffin of the once big USD.
We can discuss it here as it happens.
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Old May 23rd, 2008, 03:33 AM
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Who said it was the fault of the EU? The OP just said the Euro is too expensive now for them to travel in Europe. No one said "It's the EU's fault."
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Old May 23rd, 2008, 04:05 AM
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logos: the only problem is that it won't be only those selling the derivatives, but also those buying them that will feel the sting.

Besides, who are we to judge consumption as good or bad, sustainable or unsustainable? Personally, I can't understand why anyone would ever pay the required premium for a Mercedes over a Hyundai. This does not mean that the German economy is doomed to failure. Similarly, that one cannot understand why someone would buy financial derivatives does not mean that it isn't a real business that generates real income. As long as people are willing to pay for something, it counts as productivity in my book.
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Old May 23rd, 2008, 04:27 AM
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Problem is that loans to people that never should have gotten one, and would have never qualified for one did (do) get the money because of their overvalued assets (i.e. houses) and easy money!!! (Buy now, pay later, no savings needed). These worthless credits were repackaged and sold to foreign "idiots". This only succeded, because their willingness to believe in the value of the USD (You could not have done this with ANY other currency on the planet, without instant penalty). They actually thought this was a good investment. The sheer amount of money created this way leads to a rapidly increasing inflation. The USD won't come back, inflation will level out the existing disparities, with the weak USD making the savings of those foreigners wortless (losing value quickly that is.). The former chancellor Helmut Schmidt (one of the architects of the &euro said last week, the the UK and the US see their financial markets as an asstet that will do them good, instead many of the "products" sold there have the power to destroy.In the end, the price for the US cosumers "greed" will also be paid by themselves.
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Old May 23rd, 2008, 04:31 AM
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The "weak dollar" policy has been continually pursued by the current Administration in order to attract foreign investment capital as well as make American-produced products more competitive in the global marketplace.

The OP needs to speak for themselves as to whether or not
"Europe is too expensive" vs. just "more expensive than ever."

I am planning to be in Euirope at least twice within the next year or so. Yes, it is more expensive than ever but it isn't stopping me from going.

I hope there isn't anyone here who was planning to buy their little girl going away to school in NYC a TWO HUNDRED AND FIFTY DOLLAR nylon "tote bag" with some designer's name spread all over it (current thread here somewhere)so she can be "trendy" and is then complaining about the "expense" of going to Europe.
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Old May 23rd, 2008, 04:36 AM
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RufusTFirefly wrote: "Who said it was the fault of the EU? The OP just said the Euro is too expensive now for them to travel in Europe. No one said "It's the EU's fault." "

The OP more or less did by focusing on the cost of the Euro. My Euros cost me exactly the same today as they did a year ago, because my income is in Euros. The fundamental explanation is that the US$ has fallen in exchange value for a number of reasons, many of which have been mentioned in this thread.

It's strange that even though the Iraq adventure has far less popular support in the US than when it started, its effect on the value of the dollar is rarely mentioned.
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Old May 23rd, 2008, 04:44 AM
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The former chancellor Helmut Schmidt (one of the architects of the &euro said last week, the the UK and the US see their financial markets as an asstet that will do them good, instead many of the "products" sold there have the power to destroy.In the end, the price for the US cosumers "greed" will also be paid by themselves.

And this about sums up German economic policy. Privilege large industrial corporations and commercial banks. It is conservative strategy, and one that has given them higher unemployment and lower per capita GDP than both the US and the UK. Helmut Schmidt can believe what he wants to believe, but the facts speak for themselves.

There is nothing new about risk in the financial markets. Stretching back to the Great Depression, financial crises have been part and parcel of the landscape. So have outsized returns that, over time, far outstrip the downturns.

The biggest mistake, from a public policy standpoint, is that Helmut Schmidt believes that the risk is isolated to the US and the UK. He is wrong. A serious meltdown in the US (or the major UK banks) would have a ripple effect that would certainly and negatively impact economic growth in Germany and the rest of the EU. So, he is encouraging Germany to play it safe (and miss out on the rewards), even though this won't eliminate the risks to the German economy from a financial crisis in the UK and the US. Sounds like a losing proposition to me.
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Old May 23rd, 2008, 04:58 AM
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As we will see, the way it backfires does mostly affect the US. Most of Europe will still be standing after it hits.
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