There used to be a time when the ultimate declaration of certainty was "I'll bet you dollars to donuts, I'm right." Those were the days when dollars were worth a dollar and donuts were virtually worthless. Now no one exactly knows what a dollar is worth but a donut costs 99 cents at Dunkin Donuts. "Dollars to donuts" has become an even money bet.
Earlier this month I was in the waiting room at my doctor's office. The delay was so great, the patients ahead of me so many, and I was so desperate for something to read that I picked up a Phillips Auctioneers Catalogue dated October 29, 2001. That's a few weeks short of six years ago-- after 9/11, but before the Iraq war.
The paintings were modestly priced, not old masters. But it was not their quality that captured my attention, it was the exchange rate. Back then $1.47 bought one British Pound, now it's $2.03. So, a painting attributed to Thomas Barker that was expected to sell for between £3,000- £4,000 ($4,450 - $5,600.) Today the same painting would cost $6,100 to $9,000, that's $1,650 to $3,400 more, a dollar decline of more than 45%.
Catalogue estimates were also expressed in Euros. In that case, Americans bought a Euro for 92 cents--now it costs $1.41. That's a 53% decline in the value of the dollar. Brits and Europeans come to New York for Christmas shopping. That speaks for itself.
It is apparent that whether expressed in paintings or donuts the dollar is in some trouble. And neither the Administration nor the media seem much concerned about it. Everybody sees the upside, cheaper prices for American goods sold abroad; nobody pays much attention to what it does to individual Americans traveling abroad. To contradict, Horace Greeley, my advice to vacation travelers is stay home folks, stay home. And also, don't bet anybody dollars to donuts anymore. The odds aren't as good.
Kickin' Wall Street's butt, one cheek at a time.
The changing climate, and what to do about it, also a mystery to our imperial president and that dick Cheney, might work to prevent us from becoming poor, fat undenourished people in a poor nation., When we all, rich and poor, succumb to the fate of the polar bear and the walrus.
Sinking dollar is good for exports. No surprise.
But from a macro perspective, if the typical American buys more foreign than domestic goods, I would suggest a sinking dollar will hurt that purchasing power MORE than by the additional dollars you can spend locally.
Measured in dollars, our economy is treading water.
Meausured in Euros, our economy is shrinking and sinking.
Food for thought.
Glad you're doing well. Most Americans do not have export-based incomes.
The single currency for Europe has been a major competitive success for them, and their collective clout vis-a-vis the dollar should not be underestimated.