Europe gets More Expensive for US Travelers
Great. During a short five minute break from my exceedingly growing amount of homework I come to find that the Euro has once again reached an all-time high against the US Dollar (NY times link below). Thus, my future/pending backpacking trip is getting less affordable every week. So what I’m saying, is that Europe is really expensive for travelers! My forecasts (below) are not looking good for the dollar against the Euro for travelers is not looking good…
This is not something that’s new, as everyone has been touting the expensiveness of European travel ever since our country’s leaders began to care less and less about the worth of the US dollar. But human nature suggests that there’s got to be a celing as to how expensive the Euro can get…right?
NO! From what I’m thinking anyways. Here are the scenarios I see playing out in the next couple years:
US does nothing, the Dollar gets weaker
Our analysts continue to ignore the dollar’s decline and feel that it is not important as others make it out to be. So in a couple years, we’ll be at about $1.67/1 Euro. Just a guess, but a reasonable one I believe.
- Probability: 80%
Europe Sick of it, weakens Euro
After a year and the dollar dips to ~$1.55/Euro, the EU decides to weaken their currency because they’re seeing economic declines since it’s harder for them to export their goods. So then over the course of a year or so, they lower the Euro back to $1.25 range, assuming that after they lower it, it will start gaining on the dollar right away anyways.
- Probablity: ?%
New US Administration spends no money, strengthens US Dollar
So we elect a new administration in 2008 that actually commits to slowing down spending. We pull out of Iraq, cut some social programs, repeal some tax breaks, and run a balanced budget for a couple years. Economists see the drastic change, and speculators make the dollar almighty once again.
- Probability: 3%
So basically, I have no idea, along with everyone else. No economists know, the President doesn’t know, and no legislator has a clue. But until we get a government that spurs spending and lowers its debt load, one thing is certain: the dollar has no reason to become stronger.
Maybe you should look into Central or South America as a destination...? The Euro and British pound are only getting stronger against the US dollar.
Best,
Mark
Yeah...over the past month or so i've come to a similar conclusion. I may start making dual plans/itineraries in case i can't afford it
But, let's look at this situation from another side.
For example, I'm from Poland (Central Europe) and I do not mind the weakness of US$... We can buy a lot of things at US shops via internet, they are cheaper than in our country...even if we add the cost of shipment... Your books, cd's, movies, electronic stuff, multimedia devices etc... are cheap for us...
But, I understand Your - traveller's - circumstances, the conjuncture has changed badly for You. There are a lot of tourists from US, and they do really think and say: "Europe is too expensive" - I think it's a New Deal - created by a few circumstances: economical raise of European Union, war in Iraq, and G.W.Bush-his politics and administration...
I can give You an advice, try to find out more about Poland...it's in the ideal Centre of Europe...beautiful, cheap and safe country, with a lot of historical monuments, nice people, and good food... It's really cheaper than France, Spain, Germany...(Poland is one of the cheapest countries in whole the Europe) but it hasn't been so explored yet... I recommend you these cities: Cracow, Lublin (My city), Torun and of course Warsaw...remember: Poland is heart of Europe...
Um, let's NOT cut the social programs. Poor people have it hard enough in the U.S. already.
If the wealthy paid their share and the government would QUIT giving tax breaks to huge corporations, there would be more than enough for everyone. Sadly, all this administration wants to do is funnel money to their defense contractor friends via "wars on terrorism" and reward the filthy rich for being filthy rich. The 80's showed us that supply-side economics and the trickle-down theory do not work...all the rich do is pass the money back and forth among themselves.
Is it so? Now I should save my money……