Dollars tough to sell on streets of Amsterdam

[tocqueville]

1 hour, 43 minutes ago

AMSTERDAM (Reuters) - The U.S. dollar’s value is dropping so fast against the euro that small currency outlets in Amsterdam are turning away tourists seeking to sell their dollars for local money while on vacation in the Netherlands.

“Our dollar is worth maybe zero over here,” said Mary Kelly, an American tourist from Indianapolis, Indiana, in front of the Anne Frank house. “It’s hard to find a place to exchange. We have to go downtown, to the central station or post office.”

That’s because the smaller currency exchanges — despite buy/sell spreads that make it easier for them to make money by exchanging small amounts of currency — don’t want to be caught holding dollars that could be worth less by the time they can sell them.

The dollar hovered near record lows on Monday, with one euro worth around $1.58 versus $1.47 a month ago.

http://news.yahoo.com/s/nm/20080317/od_uk_nm/oukoe_uk_dollar

...................................................

it reminds of the Deutsch Mark in pre-Hitler Germany

[DS1]

1. that's a buzzkill

[Occulus]

18. No shit n/t

[Fredda Weinberg]

2. Were you in pre-war Germany? If you were, I doubt you'd make such a remark

The problem there wasn't foreign exchange ... it was domestic inflation. We're nowhere there yet, but you're working on it ...

[tocqueville]

3. of course it was a different reason

but the rate of depreciation was astounding, like in the dollar's case

[Fredda Weinberg]

4. You may not know economic theory either. If the dollar were depreciating

we'd have inflation. What you're seeing is the domain of the arbitrager ... and money changers always profit.

Look, I know what you mean, but honest, it's hyperbole.

[sarcasmo]

5. You obviously don't go to the Grocery store. We do have inflation, 7 bucks for two gallons of milk

Today.

[Fredda Weinberg]

6. Yes, but not hyperinflation ... you mentioned the Weimar Republic?

The monetary system out of control

And it got worse: Workers now received their wages each morning in baskets. They needed to go shopping immediately. In the evening their salaries were worthless already. The physical supply of money became a problem. Due to the sheer volume of notes needed, a central money supply was impossible. The Hyperinflation was in full swing.

http://www.germannotes.com/hist_inflation.shtml

Please, give this up.

[dysfunctional press]

9. $3.50/gallon isn't all that bad a price for milk.

i buy it for $2.99 when it's on sale, so $3.50 isn't all that outrageous. how much do you think a gallon of milk should go for?

[sarcasmo]

19. When you make 10 bucks an hour before taxes it is a bad deal.

Edit for spelling.

[dysfunctional press]

23. what price SHOULD it be in your opinion...?

:shrug:
i've been doing the grocery shopping for years, and it doesn't seem to be all that exorbinant a price- especially compared to the stuff that really HAS gone up in price by a bit.
and at 3.50/gallon, it's still probably a money-losing loss-leader for the store.

[sarcasmo]

24. It's not just Milk, it's inflation far out pacing wages.

I don't buy a certain soup anymore because in the last year it went from 2.09 to 2.79.

[dysfunctional press]

25. i don't buy any soup, unless it's on sale.

wolfgang puck soups go on sale for $1 can a few times a year...healthy choice in on sale now for $1.25, and two weeks ago, progresso soups were on sale for $1/can.

i went to the store on sunday, and bought 27 different items- but ALL of them were on sale. the receipt shows you how much you've "saved", my savings amount was almost 45% of the total.

people have to learn to shop aggressively- but you can still eat very well, even on a budget.

with easer coming on sunday, this is a GREAT week for vegetables- broccoli yesterday was 48 cents/lb. i picked up a few- we LOVE broccoli.

[axollot]

13. Exactly what I was thinking........

As the cost of fuel increases, it's natural that the cost of goods the trucks transport also increase. Thus the masses feeling the bite of inflation in a more "in your face" way about it.

I deal with people in the UK all the time (for business/purchasing inventory!), in the past few years I've seen how much it's dropped - the amount is staggering and triggered me for what was to come - long before the MSM was actually talking about it. Hyperbole my ass.

Sure, those that travel overseas will feel the bite of the dollar plummeting before some of the denizens State-side.

However, there has ALWAYS been a great trust in the US dollar and it was never turned away like this - say in the late 80's and early 90's the dollar plummeted again. - about the time "papa" Bush was in office too. I lived overseas and remember that it really sucked I wasn't making excellent exchange rate when I turned in US dollars for Aussie dollars.

And, my shitty luck continued - when I moved back to the US (duel citizen here) several years ago - again, I got the short end. The bottom dropped out of the Aussie dollar - in part because the US dollar had become very strong.

Now - to the person that made the remark about 1930-1950 "ish" worth of the German Mark - sadly it became worthless once the Nazi's went down. You didn't have to be there, you only need to read history books. Hell, Confederate money became worthless too after the Civil War - any actual "value" it has now is historic and nothing else.


Cheers
Sandy

[tocqueville]

7. the dollar is a "paper" money right now

the official picture :

“Based on an orderly correction in the US current account deficit, the World Bank said today that it expects an annual, 5% effective decline in US currency through 2008.” At the same time it expects the global economy to expand at a rate of 3.7% in 2006, up from its estimate of 3.2% in late 2005.

http://business-school-blog.elliottback.com/34/world-bank-expects-5-annual-depreciation-in-us-dollar-till-2008/

the dollar is still important because oil is priced in dollars (so far)

you can slowly depreciate your money (it's good for exports) instead of choosing devaluation (due to the special place of the US in the world) Which in the long run cannot be avoided :
http://www.moneyweek.com/file/32261/can-a-dollar-devaluation-be-avoided.html

In another words the dollar can less and less be backed by solid assets, and the bankers can come to give it up for other currencies.
YOu cannot borrow money indefinitely and print money indefinitely. In the end you lack credibility.

so far inflation has been low due to the low-cost imports from China. But if the Chinese (and others) start trading in Euros, the US economy will collapse. You don't have to be an economist to understand that.





http://www.nationalreview.com/nrof_nugent/nugent200604130817.asp

[Fredda Weinberg]

8. You imagine the US economy will collapse if others trade in Euros?

Get your scenarios in order ... and yes, having a degree in economics helps.

1st ... the charge is that the Chinese will dump their assets. Yes, that would be nasty, but we would survive and the Chinese would suffer because their wealth would go poof! The Chinese ain't dumb and they study us ... why kill the goose that's feeding their billion people? Socialism didn't ...

2nd ... the idea that changing international currency to Euros would cripple us. It helps our price stability that the exchange currency is the greenback, but not necessary.

These are inevitable changes, so no sense getting hysterical. Before making proclamations, get an education in the subject ... then I'll speak to you as a colleague, not as to a poseur.

[High Plains]

10. With that degree in economics...

...do you also get a minor in insufferable arrogance?

[magellan]

16. LOL

:thumbsup:

[Fredda Weinberg]

21. Dual majors in Economics & Political Science: To deal w/everyone else

end keep a sense of perspective about myself ... 'cause life's an endless source of amusement.

[tocqueville]

11. I am not the only one

"Harry Koza in the Globe and Mail quotes Bernard Connelly, the global strategist at Banque AIG in London, who claims that the likelihood of a Great Depression is growing by the day.

Martin Wolf, celebrated columnist of the U.K.-based Financial Times, cites Dr. Nouriel Roubini of the New York University's Stern School of Business, who, in 12 steps, outlines how the losses of the American financial system will grow to more than $1 trillion - that's one million times $1 million. That amount is equal to all the assets of all American banks.

Every day now, thousands of people all over the U.S. and Great Britain are walking away from their homes - simply mailing their house keys to the banks - as housing bailout plans fail."

http://www.intelligencer.ca/ArticleDisplay.aspx?e=918803

Those guys must have a least as good "collegial knowledge" of economics as yours, if not better.

The pricing in in Euros would be a catalyst. The Chinese aren't dumb and they won't accept US money as a major currency when they consider it's not worth it anymore.

or are those guys hysterical :

"China threatens 'nuclear option' of dollar sales
By Ambrose Evans-Pritchard
Last Updated: 8:39pm BST 10/08/2007

The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US treasuries if Washington imposes trade sanctions to force a yuan revaluation.

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels."

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/08/07/bcnchina107a.xml

The problem, Fredda, is that people live on myths. They don't want to listen to the whistleblowers, because it's too painful.
"It can't happen here", we have heard that before. Probably if you have had a 9/11 scenario presented to Americans one year before the events, most had answered "this is Hollywood stuff". If you had asked the Army, they had said : "the planes would have been shot down immediately and besides the towers would never collapse, they are built to resist"...

we all know what happened in reality...

maybe you should get some education yourself... just in case

[Fredda Weinberg]

22. Strange you should reference 9/11 ... the boy I married was in NYC

during that period and of course, staying w/me. Neither of us was surprised.

You quote hysterical scenarios in defense of a statement presuming to describe fact? Please, back off the hypberole unless and until we reach hyper-inflation. My German relatives gave me warnings decades ago.

[Romulox]

12. Degree in Economics? Isn't that like a degree in English Lit?

Economists are very good at describing things that have already happened, but exceedingly poor at predicting what might happen tomorrow.

This is because Economics is an entirely unfalsifiable pseudo-science at best (e.g. "perfect information", "rational consumers", etc.) and a religious faith at worst...

[Fredda Weinberg]

20. Have I offered a prediction? The equations, if you're interested,

incorporate free will. It's not pseudo-anything ... econometrics is linear algebra, no more, no less.

[Zywiec]

14. Why not just go to the ATM machine?

I travel to Europe all the time and get my money from the ATM.

Why carry around a bunch of foreign currency (dollars) in Europe to try and exchange?

You'll always get the worst rate at some hole in the wall currency exchange.

[bicentennial_baby]

15. Yep, same here

My bank has an agreement with BNP, so I got fee-free withdrawals in Paris.

[pitohui]

17. folks, for crying out loud, just use an ATM to withdraw euros

it was never cool to expect europeans to accept american dollars, it was always rude

i can recommend paypal debit cards but most debit visa/mastercard cards with four numeral pins should work in europe including the netherlands