travelme

Now I know that this might seem crazy and at the very least, unlikely. However what if that Americans decided to forgo any travel that involved the euro and boycotted all european imports? Would this have any effect at all on the dollar exchange rate? Would it hurt North Americans?
This is not a post to incite or to be provocative. I just think that it is one that is interesting to ponder.

kleeblatt

I think it would be easier to impeach Pres. Bush. Get the same effect without causing an international scandal.

jdraper

I do imagine that the European citizens that work in the tourist industry would find business down and their income harmed. However, in the grand scheme of things I think Europeans would manage to go about their daily lives without a great deal of change or sense of loss. The world does not revolve around us Americans, no matter what we may think at times. Why punish Europeans for the lousy exchange rate when we caused it ourselves?

In general I don't think anyone could ever get such a boycott to work as people will still travel to the places they love and Europe seems to be one of those places.

PatrickLondon

Exports and tourist expenditure are only part of the story. I think you need to worry a lot more about the level of US debt owned by other countries - particularly China. If they demanded payment in euros....

travelme

Interesting comments. Thank you.

PalenQ

Travelyou

It seems you have not one inkling of the global economy and factors that predicate exchange rates

you literally are suggesting something that would be like a butterfly flapping its wings somewhere and causing a hurricane

even though the Chaos Theory may make such an occurence possible it in reality is irrelevant

traveller1959

The exchange rate is solely a problem of the US Dollar. It is not that the Euro is strong - it is that the Dollar is weak.

The reason is that the US Federal Reserve has decreased the interest rates. Lower interest rates for the dollar means that capital flows into currencies with higher interest rates like Euro or British Pound.

And the Fed had to lower interest rates in order to help the US banks who had gives mortgages to NINJNA home owners - NINJNA means "no income, no job, no asset". Since the real estate prices have fallen, the banks are going to lose very much money.

So if you want to strengthen the Euro - in fact, we Europeans would be highly interested in a stronger Dollar (in order to sell our products to USA) - make sure that real estate prices rise again.

But as this will take time, the Dollar will decrease further. It might recover in a few years (hopefully).

Given that thousand of billions move daily between continents, a boycott would be like a snowball in hell. Tourism is economically not significant for world economy.

Cowboy1968

What if European imports were made from American steel, timber, or any other raw materials and produce? Or were made using American software or software licenses?
I would guess that every piece of hardware that has some sort of a computer built in (incl. anything from aircrafts to dishwashers), will use US hardware or software.
If US tourists boycotted Europe, it would also affect US airlines, which still seem to be in a somewhat unstable condition.

Guess that's why they call it a globalized economy.

USNR

I know your question is totally hypothetical, but it may be fun to answer it.

International trade depends on international trust. Yes, there are laws -- but the basis of business worldwide is largely rooted in trust.

If we decided to boycott the Euro, as you pose your question, what would be the message we send? Right! We would brand ourselves as childish, unreliable, not worthy of trust in the short run -- and perhaps downright loonie in the long run.

What would be the impact on the dollar as one of the free world's basic trading instruments? As a medium of exchange, as a storehouse of value, and as a medium of count (the classic definition of money)? I wouldn't want to be a holder of dollars if that were to happen. And neither would any other person or nation. I leave it to your imagination as to the consqequences, none of which are good.

The Euro-holders, of course, would reply in kind. They would rightly boycott our exports -- machinery, chemicals, grain, cotton, etc. They would sell our government bonds into a falling market. Who knows -- Washington might be forced to cut spending and bring our budget back into balance, the way it was seven years ago. Can you hear me chuckling?

travelme

Palenque, its obvious that you misunderstood my question. I was not suggesting to do such a thing. I was just opening a discussion. Big difference and no need to make such a judgement on another's character thank you very much.

PalenQ

Let me apologize if you perceive my comments as personal - they were not meant to be and maybe i used poor wording

I was just saying that such action would be a drop in a huge bucket in light of the factors that in fact which drive international exchange rates, etc.

I'm sorry for perhaps writing too stridently. Anyway i apologize for any connotations i did not mean to make - my fault

PalenQ

Re-reading my post i'm at a loss to your comments anyway

i was answering your question as what i thought you were eliciting - why such actions would have practically no effect

anyway again if you took my comments in a bad light i do apologize

PalenQ

as others say the low exchange rate more has to do with situations in the U.S. (Canadian loony has done quite well keeping up with euro)

the huge defecit in trade and the tons of money we are in hock to foreingers - cutting interest rates, etc.

Some suggest American government is allowing dollar to drop to increase American exports

A boycott of european tourism, if done en masse could provoke European countries to however offer incentives for Americans to travel there - cheaper railpasses, subsidized hotel rates, etc.

Padraig

PalenQ wrote: "A boycott of european tourism, if done en masse could provoke European countries to however offer incentives for Americans to travel there - cheaper railpasses, subsidized hotel rates, etc."

And this from somebody who upbraided travelme for having "not one inkling"!

PalenQ

Touche Paddy

but it's actually be done before - many years ago by some countries

and has there ever been a mass boycott of tourism - no so how do you know certain tourist areas may offer incentives?

So you postulation is perhaps as unprovable as mine

If no American tourists were going to Europe the tourist sector in those countries would demand action i believe.

911 was an example - there were many special incentives when the tourist torrent slowed to a creek - not as dramatic as i posed

I was speculation what might happen if something that has never happended happens and i think my scenario is perhaps more plausible than yours - that they would do nothing.

hetismij

To be honest tourist boards are now far busier getting Chinese to visit Europe than Americans. The Chinese are the ones with the money nowadays.

I remember the boycott of French goods in The US - Freedom fries etc. It just made the US the butt of plenty of jokes in Europe.
I don't think anyone would really notice that much if North Americans boycotted Europe and it's products for just one month. If it went on longer then there would be tit for tat boycotts I suspect and where would that get us all?

STill if anyone is serious about it then maybe you should ask your defence department to boycott European products too - they have after all just placed a massive order with Airbus.

lincasanova

and what if oil were not calculated against the dollar, but against the euro in the future?

who would this most benefit? is it a possibility or just a rumorous desire of some?

travelgourmet

<i>&quot;The reason is that the US Federal Reserve has decreased the interest rates. Lower interest rates for the dollar means that capital flows into currencies with higher interest rates like Euro or British Pound.&quot;</i>

Actually both the Fed Funds Rate and the ECB Deposit rate are at 3%. A year ago, when the dollar was also sliding, the Fed Funds Rate was 5.25%, while the ECB Deposit rate was 2.75%. The UK Base Rate is currently 5.25%, so it is higher.

StCirq

It would have about as much effect as Americans boycotting Freedom Fries.

Which is to say nothing, nada, zilch.

BTilke

One month really wouldn't have much effect. Six months or longer would, but only to those businesses that depend heavily on American tourists for the bulk of their income and can't make it up with the influx of tourists from Eastern Europe or China. And there simply aren't that many of those.

Ditto for not buying any European products for a month. Minimal if any impact. For every American who doesn't buy a Louis Vuitton purse, for example, there are plenty of people from Russia, Japan, China, to make up the gap.
One company that MIGHT be hurt is Monin, the company based in Bourges, France, that makes those syrups used in fancy coffee drinks. If everybody stopped ordering hazelnut or whatever lattes, they would probably feel it.
(Trivia note: Bourges and the town closest to where I grew up share the same zip code!)