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Thanks Lawren. Just what I needed. Now, I need to try and decide whether going to a couple of the eastern Europeon non-euro countries in the summer of 2008 would be better than going to London and Italy. I know what my wife wants to do -- shop in London! Maybe I can satisfy both of us in that we can still do the London part, but instead of Italy go for eastern Europe. I don't know -- I was looking forward to the Italian food.....
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Don't count on Mexico for a "cheap" vacation. We're just back from Puerto Vallarta and restaurant prices have increased at least 10% over last year, even the restaurants outside the resorts. Drinks at the resort were comparable to high end resort prices in U.S. We found that most if not all the restaurants have raised drink & food prices. Kind of strange since the minimum wage for a waiter is about $5.00 per day!Comment
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Eventually it will turn. However, right now is a good time for Europeans to come to the US. My wife was in NYC before Christmas, and she said her hotel was full of German tourists on shopping trips.Comment
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More bad news........
U.A.E. to sell dollars for euros
By Matthew Brown Bloomberg NewsPublished: December 27, 2006
ABU DHABI: The United Arab Emirates plans to convert 8 percent of its foreign-exchange reserves to euros from dollars before September, the latest sign of growing global disaffection with the weakening U.S. currency.
The U.A.E. has started, "in a limited way," to sell part of its dollar reserves, the governor of the country's central bank, Sultan Bin Nasser al-Suwaidi, said in an interview. "We will accumulate euros each time the market appears to dip" as part of a plan to expand the country's holding of euros to 10 percent of the total from the current 2 percent.
The Gulf state is among oil producers, including Iran, Venezuela and Indonesia, looking to shift their currency reserves into euros or sell their oil, which is now priced in dollars, for euros. The total value of the reserves held by the U.A.E. is $24.9 billion, Suwaidi said.
The dollar has fallen more than 10 percent this year against the euro.
Part of the reason for the decline is the outlook for slower U.S. growth, which makes the dollar a less attractive investment.
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But fears that the dollar's level is unsustainable because of the heavy indebtedness of the United States to other countries is also behind the weakness this year, analysts said.
The shift to euros underscores its growing role as a reserve currency nearly eight years after its establishment. Central banks often keep the details about their currency holdings a secret.
The move by the U.A.E. central bank "is hard evidence that diversification is happening," said Shaun Osborne, chief currency strategist at TD Securities in Toronto. "This is negative for the dollar in a broad sense as it reflects falling confidence in the currency."
Central banks in Russia, Switzerland and New Zealand are also diversifying away from the dollar and into yen after the Japanese currency reached a 10- month low against its biggest trading partners in October.
Gulf Arab energy producers will earn as much as $500 billion from oil sales this year, the International Monetary Fund forecasts. The region's central bank reserves represent a fraction of the currency holdings of state-owned investment firms like the Abu Dhabi Investment Authority, which is estimated to have more than $500 billion under management.
But the signal that such a move sends to financial markets is a negative one.
"It is a recognition of the vulnerability of the dollar over the coming year," Simon Williams, an economist with HSBC Holdings, said by phone from Dubai.
The euro rose to $1.3123 from $1.3098 after Suwaidi's comments were published Wednesday.
"This is not confined to the U.A.E. There's a general awareness across the Gulf of the benefits of diversifying currency holdings," Williams said.
The U.S. current account deficit widened to $225.6 billion in the third quarter. Oil producers in the Middle East and Central Asia will run a surplus of $322 billion for all of 2006, according to the International Monetary Fund.
Total foreign holdings of U.S. Treasury securities — which generally support the dollar — increased to a record $2.16 trillion in September, just under half of the $4.34 trillion outstanding.
http://www.iht.com/articles/2006/12/...ess/dollar.phpAngela
If you change the way you look at things, the things you look at change.
BTW, I'm still keeping track of how many times you annoy me.
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The Economist magazine has a more detailed list a while back.
I was in Slovenia last week, and they get the euro on January 1, 2007, with a 2-week dual currency period after which the tolar is history. According to the local English language press there was little enthusiasm among the population for the change (although I suppose the government could have been ''eager''). Polls showed that 65% of the population expected that the change would cause prices to go up.
My recollection is that the other eastern European country that will get the euro later this year is Estonia. The others are in future years.
Originally posted by lawren2Comment
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Historically, the lowest euro/dollar rate was 0.83440 on 6th July, 2001, pre-Iraq, when the U.S. had a surplus budget. (All-time high was 1.36670 on 31st Dec, 2004.) Now the U.S. has a deficit that is larger than most countries debts, so not surprising that the world has lost confidence in the dollar. Also, the IMF released a statement recently (Nov?) expressing concern about the overheated housing markets in Spain, UK, Ireland, and the US. Interest rates are rising - also a concern to the IMF (see reports on their web page).Originally posted by Carolinian View Post
All together, baring unforeseen and rapid changes that would restore confidence in the dollar and/or promote lack of confidence in the euro/pound, the US dollar will be weak for some time to come, so - if you want to travel to Europe and many other places globally - then you'd better get used to it....
Having said that, there are some excellent places to visit in Europe that are affordable. Southern Europe (Portugal, Spain, Italy, Greece) is far cheaper than northern Europe. The UK is especially and ludicrously expensive, and quite frankly IMHO not worth the money. Give London a miss, and plan for Barcelona instead. Which I would anyway suggest even if the euro was $0.83440...Comment
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I have friends who have travelled to Spain for years in the late winter / early spring to the Costa Del Sol. They have had an established pattern, renting for a month at the same place, renting their car for a month the same place, having favorite restaurants, etc. They had done this for thirty years. While they paid in pesetas, costs were stable, with only a very slight upward trend over time. Two years after the euro came in, they say their land cost (excluding air) had doubled.
No, Barcelona is not the answer. Until they get the euro foisted upon them, Budapest, Bucharest, Prague, etc. may be, however. Look east, not south.
My friends are looking for a new place to go on the coast in Europe. I have suggested the Dalmatian coast of Croatia, and they will be checking that out this year.Comment
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Lawren,
Are you exchanging into Allen House? If so, there are a number of reasonably priced places to eat in the area. We also frequently got take out frozen meals at the grocery store down the road (and of course this can be done at any grocery store) that were quite good.
SharonComment
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I always said to my 80 year old mom when she balked at the US/CAN exchange rate, " Either you spend it now or we will spend it later." Well, she didn't go on those trips, and now we are. Travel now, while you can, or your children will! Just MHO.
Happy New Year to all.
DoriComment
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Yes, Spain has become more expensive, and right now the Dalmatian coast is cheaper, but not for long as there are property speculators moving all over eastern Europe, including now Bucharest, which is driving the prices of everything up, just as it has in Spain over the last decade. Price rises in Spain, and those occurring right now in the places you quote (esp. Prague) not due to the introduction of the euro, but to market forces. Those with money (esp. the Brits) are travelling much more (thanks to RyanAir and competitors) and spending it in places where prices are low, driving prices up.Originally posted by Carolinian
Spain's overheated property market is showing signs of weakness, certainly in overbuilt holiday property, with prices dropping 15-25% over the last few years (except in high-end properties - those with lots of money don't care about price). So there will be some slowing of the price rises, esp. as people are now looking to go elsewhere, as in anywhere else, than the infamous Costas.
But I would still always choose Barcelona over Dubrovnik, and certainly over London. There's more to value than cost. To quote Oscar Wilde, who I see almost every day in Merrion Square (or rather, his statue at least) - "A cynic... a man who knows the price of everything and the value of nothing."
BTW, many economists are predicting $1.50 to the euro if there isn't major changes in the US economy, with the long-term stable rate of $1.40 by 2011. So if you want to see Europe, do it now...Comment
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Sharon we have an exchange to Stouts Hill in the Cotswolds. The plan is to fly in on Wednesday or Thursday prior to check-in and spend 2 or 3 nights in London before heading west.Originally posted by 3kids4me
I will have to start looking for something affordable for the 3 of us to stay in.Lawren
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There are many wonderful places in the world, but one of my favourite places is on the back of my horse.
- Rolf KopfleComment
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Originally posted by lawren2
While you are shopping for a place to stay in London, it might help to think about the advantage of staying a little further out...the prices to eat will be cheaper as well!
If the Allen House hadn't come through for us, the back-up plan was going to be the Holiday Inn Express Earl's Court, which seems to be somewhat reasonable and has gotten some decent reviews on Trip Advisor. I think you can get a room with a pull out couch so the three of you would fit!
The other **huge** advantage of a hotel is that you would have a/c. It was brutally hot the July week we were in London, and very uncomfortable to sleep for a few nights. The Allen House staff told me that some people checked out so they could go to a hotel!
SharonComment
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Euro inflation has hit the euro countries, due to the rounding up. The European Central Bank denied it for a long time, but finally admitted it was so.
I was in Germany, myself, on the last day of the Deutsch Mark and first day of the euro, and saw the huge impact of ''rounding up'' firsthand.
The introduction of one of the guidebook series I use, Lonely Planet or Rough Guide, for Greece even mentioned in the intorduction that prices in Greece had gone up dramatically because of the intorduction of the euro. When I was in Slovenia a couple of weeks ago, the headline story in the English language Slovenian Times on the change to the euro mentioned that the change had led to higher prices in western European countries that had gotten the euro and that polls showed 65% of Slovenes believed the same would happen to them.
The price increases in eastern Europe recently have been due to the requirement to increase the VAT as part of accession to the EU, or so an article I read in a European financial journal said. There is another round to come when they get the euro fosited upon them.
Property speculators were in Spain long berfore the euro.
I have been to both Barcelona and Dubrovnik, and I would take the wonderful UN world heritage listed medieval city of Dubrovnik over Barcelona anytime.
Originally posted by alanmjComment
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You're not listening Carolinian. Yes, euro inflation has added something like 5% to max 20% to price inflation, but it doesn't even begin to account for price rises of 2-3 over the last decade in some places. By far the greater factor contributing to price rises in formerly "affordable" places is cheap air travel allowing those with money (esp. Brits) to consider purchasing holiday homes in Spain, and now the former eastern Europe exactly in those places you quoted, which don't have the euro but are seeing property price rises of factors of 2-5! So nothing to do with the euro at all.Originally posted by Carolinian View Post
Regarding Dubrovnik and Barcelona, each to his own. I've lived in Barcelona, and travel there a lot, and love the city, especially El Born district. TimeOut states that it's the city best loved by its visitors.
I say south, you say east - a pissing contest not worthy of continued debate. I prefer the mediterranean cuisine, lighter architecture, and weather of southern Europe over the fat-rich and meat-rich eastern European kitchen, heavier architecture and far poorer weather. I guess the point is that we both agree that there are affordable places to visit in Europe, and they are not in northern Europe, esp. UK.Comment
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While I have read numerous articles that mentioned the euro in this context, your posts are the first mention I have heard of the argument you propose.
It is also odd that the many years before the euro arrived that property speculators were active in Spain, my friends in not notice any significant increase in their trip costs. And shortly after the euro, Spanish property prices seem to be on the decline yet the costs of a Spanish vacation skyrocket. The advocates of the euro in the early days postulated that with one currency, prices for goods and services would merge into the same range. It appears they were right, but they settled not at an average but at the the price for those things in the most expensive country.
Politics has had a lot to do with the decline of our dollar, and I have started a new thread on that on the Political board, leaving neither party unscathed.
Originally posted by alanmjComment
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