How will the dollars "collapse" affect travel plans?
 

News reports today indicate there is serious concern that the US $ (already in the dumpster) may soon "collapse". Today, it's near par with the Canadian $. and at a record low against the euro . It's very bad news for anyone traveling outside the US.

The dollar has been in danger of collapse (according to the financial press) almost constantly since I started following currency markets in the mid-1980s. A great many influential academics and journalists have been telling us for 20 years that the dollar's role as a world reserve currency was at an end, and that we should expect a free-fall. I'll believe it when I see it.

The current weakness can be explained the old-fashioned way: US investment yields (especially bonds) vs. those in other countries. If the weakness continued when the fundamentals are more favorable, that will be interesting.

I thought the dollar already had collapsed, as any one traveling in Europe or even less developed areas will note when they pay their bills. :mad: Remeber when one Euro was eighty cents US?

This appears to be one way the housing bubble will be handled. Not so bad to owe a million if it is only really $400K. @:-)

As to how bad it gets, that depends on Bush. So, it might get pretty bad. :td:

This isn't really a travel buzz thread, perhaps better suited to OMNI


in fact, see this thead in OMNI about the collapsing dollar: http://www.flyertalk.com/forum/showthread.php?t=738040

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I remember 89 cents, but it seems like 5 years or more back. I just came back from Argentina where the dollar was strong (or more likely the Argentinian peso was weak). I was having "all you can eat beef" for $US9. Can't do that in Europe. As a leisure traveler, I may reallocate some of my travel to countries that are more affordable, even if the air fares are higher to get there.

The OP does not have OMNI access. Maybe we can spin this off and make it travel related by asking how will the weakening U.S. dollar impact your travel plans?

I am doing alot more homework before leaving for Europe. The value of the dollar has impacted my plans in that I MUST watch all of the "small" things. We'll be shopping in markets and taking back items to our room for lunches, we'll be limiting our extras, no choice. As with all cycles, I hope next year is better.

The weak Dollar is a Government Plot to stop Americans leaving the US in order to keep them ignorant - sorry safe

You forgot to add that it is Bush's plot to keep all Americans at home unless they are carrying a M-16. :D

I am not worried about the dollar. I am happy that I converted several years of living expenses in Euros and Sterling a couple of years ago. However, if I need to shop for electronics and other expensive items, I buy them in the US or Dubai (the dirham is pegged to the dollar) and bring them back to Malta.

The weak dollar is good for exports and domestic tourism. Not so good if you want to travel to Europe or buy European stuff.

I'm pretty sure it has collapsed already.

I get paid in American pesos. :(

I diversified away from Bush pesos as much as I could, but I continue to feel the pinch from the still continuing fall.

Bring it on!

Weak dollar = cheap holidays for us Brits :D

Note to self: start planning family holiday in Argentina, take Euros as travel currency. ;)

People have been predicting all sorts of calamities since the 1980s-that's how they sell books. But as several have noted, the dollar's sharp drop since 2001 ( I think it was actually 88 cents to the Euro in laste 2000) is, if not a collape, still a big move and a big deal.

The reasons are complex and I'm no expert. But much of it has to do with the markets' perception of each country's relative economic strength and short to mid-term outlook. The US dollar has been hurt by huge budget deficits, which show no sign of turning into surpluses quickly due to, primarily, the war in Irag. Putting politics and what you think of the war aside, the huge costs are funds that other countries spend on quality of life. Rant all you want about the socialistic societies of the "old Europe", but they have much broader medical, educational and retirement benefits, and much lower relative budget deficits. Hence stronger currencies. How do they do it? Well, they basically have let the US bear all the costs, financial and otherwise, of defense since the collapse of communism. Getting everyone back to the table and bringing their checkbook with them should be a big priority for the next US administration.

The most recent drop in the dollar is caused, IMO, by the world's perception that the US will have to lower interest rates to stimulate the economy and dampen the effect of the housing bubble deflating, which we've begun to do via the Fed rate drop on Tuesday. If a country has room to keep rates relatively high, it results in a stronger currency, and vice-versa. Today, we're the versa.

One crushing economic factor is oil. Look at the percentage of energy the US produces itself compared to what it uses. That's the true big change since the 1980s-we now produce far less ourselves, thus sending more of our money overseas-our wealth declines, their wealth increases, dollar goes down. It's as simple as the motel with a better vew charging higher rates and making more money. And while we are more focused on saving energy, there is still a real disconnect for many people. If you don't believe me, take a long look at the size of the vehicles you see on your way to and from work.

the dollar will bounce back. Once a new president is in and a real economic strategy is put in, us UK travellers will only dream of the days when it was $2 to £1 :cool: