Amsterdam currency exchangers won't take US dollars
Currency exchange outlets in Amsterdam won't to trade US dollars for euros because the value of the dollar is dropping so quickly they're afraid of losing money, even with the outlandish vigorish the sleazy little joints usually tack on.
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.Link"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."
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ALL the way downtown? From the Anne Frank House? My goodness! That's like a 15-20 minute walk!
In all seriousness though, this is somewhat interesting. I wasn't aware that the USD was sliding so dramatically VS the euro. Of course, one imagines that the hotels are still willing to exchange currency at their exorbitant rates.
Yikes. New Hoovervilles a commin.
This is what happens when you invade countries on credit. The rest of the world gets to use your currency as toilet paper.
Way back in like 2004 I wrote about the possibly of the dollar in free-fall for the paper I was working for. I also wrote about this new concept of a "housing bubble" that the party poopers were talking about. Who knew they'd both happen at the same time? Is it time to stuff the old life savings under the mattress and retire to the rocking chair on the front porch with a shotgun across my lap? Sometimes I wonder ...
Who takes significant quantities of cash or travelers checks with them to a European country these days, anyway? She can just withdraw money in the local currency directly from the ATMs located up and down every block in the commercial/tourist areas of Amsterdam.
@misterpants - previously, Americans were asked to purchase war bonds to pay for wars. Can you imagine George W. Bush going on TV to ask Americans to buy bonds, conserve energy, and plant victory gardens for the war effort? That would require a suspension of disbelief that would probably cause one's head to explode.
Aren't these the dudes that Jesus beat up on the temple steps?
The Dutch might not want to exchange currancy now, but lots of that country's wealth is in the form of real estate holdings in the USA. Ha Ha Ha.
A lot of Americans don't know you can use ATMs anywhere. Especially those from Indianapolis. Hoosiers are charmingly naive when it comes to travel.
Indiana is the state, after all, where you cannot change your Euros back to dollars after traveling. None of the banks know what to do with it. You can either go to the only exchange booth in the entire state (at the airport in Indy) or you can mail your Euros to American Express. No joke. I drove an hour and a half to the damn airport from Bloomington.
FWIW, the dollar's not too volatile today so far, hanging around .63 Euros.
The sliding dollar will help the U.S... For many years, the dollar has been way overvalued, and this has caused U.S. exports to be artificially expensive. As the U.S. dollar slides down, U.S. goods and services become extremly cheap, and this boosts the domestic economy of the U.S..
Not only that, but as the dollar slides, U.S. foreign debt is reduced. Those big trillion dollar I.O.U.s the U.S. wrote out are suddenly worth a whole lot less goods and services.
There is still the problem of a low dollar making oil more "expensive"... however, compared to the E.U., China, Japan, India, and all the big players, the U.S. is the most oil self-sufficient. When Alan Greenspan is making speeches to OPEC asking them to stop pegging oil prices to the U.S. dollars, the whole "petrodollar" conspiracy theory doesn't hold much weight. The U.S. is extremly wasteful with oil, and the economic costs of a modest boost of mass-transit combined with replacing gas-guzzling SUVs with small Euro style automobiles will easily be made up for in jobs/exports.
The biggest worry isn't the dollar sliding (the dollar desperatly needs to slide). The biggest worry is the dollar sliding too quickly. Even positive change, if it happens too quickly, could trigger some sort of nasty global economic crisis. If it does, it is going to be global and hurt everyone, so don't be so smug about the dropping dollar.
But the people most worried about the sliding dollar right now are Europeans (whose goods and services are becoming much more expensive, reducing exports - U.S. tourists not being able to exchange money, for example, is costing Europe tourist income and hurting European buisnesses as much as American tourists), and China (who gave the U.S. lots of cheap plastic shit in exchange for an I.O.U. of U.S. dollars... and their nest egg is now suddenly becoming worthless).
I read somewhere that in fact the new $5 bills are printed on 2-ply.
a friend of mine even saw a hip hop video were not benjamins but euros where thrown around ...
#10
Word. My wife and I desperatly tried to exchange some Canadian money in several flyover states a few years ago, and it is pretty much impossible to do any sort of currency exchange anywhere except at an airport. You can exchange money extremly easy in the big cities and in tourist locations, but foreign tourists aren't big on Idaho, or Indiana, or such places - which means the banks there don't know how to exchange currency. If you have an account, they can exchange your money and deposit into your account in 2-4 weeks... but they are useless for tourists.
The states between Ohio and Wyoming, don't expect to get any currency exchanged there.
Quote of the day right there.
You've essentially argued that "God harms in order to heal". People losing the value of their savings and paychecks, so that they can work to earn more money to regain the value they lost due to inflation is still a net loss (an opportunity cost, to be precise).
"Inflation creates growth." is a lie on par with "War is peace. Freedom is slavery. Ignorance is strength."
The big losers are those companies with costs in EUR but sales in USD.
It seems unfair but EADS, the parent of AirBus, is being hit very badly because of the falling dollar. They're trying to get their suppliers to accept payment in dollars rather than Euros, something they are not happy about but may not have a choice. Boeing must be laughing all the way to the bank.
You can't even get 100 yen for a dollar now. Even the Canadian Dollar is worth more. No offense to Canadians, I just mean the Canadian dollar has not been very strong in the past.
I'm gonna convert all my savings to gold bars and bury them in the backyard. :)
#18: Yeah, I've thought about gold too, but it really won't help if there isn't any food in the grocery store or gas at the pumps. Or jobs. It is shiny and glow-y though, so it has that going for it.
I think that knowledge, cunning and cleverness are the only currencies that will help us weather the coming economic ugliness. But I got a C in high school econ, so don't believe what I write.
"which means the banks there don't know how to exchange currency"
What? For realz? But, but, that's insane.
However, as my business has costs primarily in dollars/euros, and sales in sterling, w00t!
The weak dollar is great for US exports...which would be nice if we, you know, still had any. Also, if we were still making things within our borders, the weak dollar would do less to hurt our purchasing power.
The only good result of this crisis will be the return of the manufacturing economy, which, if it was still there, would have prevented the crisis in the first place.
Wrong. Currency != real wealth. Currency = medium of exchange. Nothing is destroyed by the natural devaluation of the U.S. dollar. The broken window fallacy does not apply.
And I didn't argue that inflation creates growth. You pulled that out of nowhere. I argued that a lower value dollar boosts U.S. exports, which it does. Obviously if the U.S. government chooses an inflationary monetary policy, the U.S. can squander the opportunities presented by a lower value dollar. But that isn't a problem with a low dollar in itself.
This is a canard created by Reuters.
A quick call to several money changers in Amsterdam by a local newspaper showed that this rumor is false.
It's simple supply and demand. If you create more money, you dilute its value. This distorts the function of money carrying information about the value it exchanges, because people are buying dollars with their goods and services for less value than they think they're getting, because of the delay/lag in disseminating the information of money supply.
@ #22
The knowledge economy is a wonderful thing but I have always been confused by the idea that there is some sort of either/or choice between that and manufacture.
At some point, someone needs to make the goods and grow the food. The idea that America can transition to a purely knowledge/service based economy is dependent on the idea that whoever is making the goods will be permanently content with simply providing cheap manufacture in exchange for our ideas.
If the manufacturers ever start providing their own ideas we have nothing left to offer them. And at the same time will not have the infrastructure to simply pick up where we left off.
What is wrong with coming up with all these wonderful ideas... and then following through by making them ourselves?
If you go to Europe, don't take your dollar bills to money changers in tourist areas. Use an ATM. Even though your bank will tack on a charge, you'll get a better deal on the exchange rate.
The U.S. is the #1 exporter in the world. The U.S. exports around $1.4 trillion dollars a year. I don't know where people get the idea that the U.S. doesn't export anything.
The big problem is that while the U.S. is the worlds largest exporter, it is also the worlds most insanely large importer... it imports $2.2 trillion dollars a year. The U.S. is "borrowing" the difference.
@REXRHINO
The sliding dollar only makes US exports more attractive than what they were -- not to the global market.
Unfortunately our imports dwarf our exports, and we're not competing against our economy last year -- we're competing against developing nations that have significantly lower production and agricultural costs.
While a sliding dollar will kick up exports in certain sectors, its certainly not going to solve the entire problem and re-balance the system.
#16
I don't have any savings. None of my friends have any meaningful savings. All my money goes to rent and food; the remainder split between cigarettes and beer.
hopefully inflation means jobs come back to the US, since it should be cheap to invest now. think about that.
Ok, I have a little savings, but nothing I don't plan to spend once summer comes around. The age of decent pensions was past way before this crisis hit.
@ #23
While this is true in purely theoretical sense, in a real world sense it is pure nonsense. It only holds true if your entire savings are stored as a physical medium.
If your wealth is stored as bread and the 'value' of that wealth drops by half it is true that you have not lost any bread. If your wealth is stored as numbers in a bank computer and the 'value' of your numbers drops by half, you have lost a measurable amount of bread. yes, the numbers in the bank computer have not changed but you have still lost a significant amount of wealth.
@26 RyanH
Basically it boils down to comparative advantage and trade. Human beings have done agriculture and manufacturing for so long and have learned to do it so well that even the poorest (i.e. least resourceful) people can now do it, and they'll do it for a lower cost than the people who got wealthy doing it before can do it anymore.
The manufacturers need to know what to make, and the knowledge workers need the finished products, so they trade. This is called division of labor.
That's just competition, and it occurred with manufacturing and agriculture too. We just need to get better and faster at researching and inventing than the competition, according to market demands. So this becomes a kind of meta problem, where what's really prized is researching ways of doing researching in other areas better. This is called intelligence amplification (or sometimes knowledge management), and it's what personal computers and the Internet are all about.There is a real upside to devaluing the currency: it devalues the national debts. All those creditors overseas count what they lent us as assets, and in their eyes the assets are becoming worth less. At the same time, what the US invests abroad in the Euro markets rises in dollar terms, and this appreciation ultimately makes it possible to pay the debt off more quickly.
Of course, this also makes the US less attractive as an investment target, because the returns have to be discounted by the rate at which we devalue.
It gets worse, the more I think about it - I'm going to stop thinking about it for a bit.
Who said anything about creating more money? That is a completly different topic. We are talking about the value that the dollar is exchanged at on the world market... inflationary money supply is a totally different issue. Stop with the strawman arguements already.
An OVERVALUED dollar distorts the function of money. The dollar returning to a value that accuratly reflects the U.S. position in world trade, from a value that was artificially high because the U.S. dollar was considered a "reserve currency" for cold-war political reasons, makes trade information more accurate.
Zuzu,
We have to get a positive trade balance. That means exporting more stuff, or cutting back on imports. The latter would involve a massive reduction in standard of living, or making more stuff that we use within our borders. The former also involves making more stuff within our borders.
It goes without saying that the more you rely on imports, the more you're hurt by a weak currency, so relying less on imports is the way to mitigate the harm of the dollar's fall. Since most of what we buy and use, and could least easily do without, are manufactured products, that's a good place to start.
No wind blows everyone ill--someone somewhere will benefit from a weak currency. We have to make sure that someone is in the USA, so the benefits accrue to US citizens. Our current economic structure is entirely misallocated to take advantage of a weak currency, and I say that needs to change. When life hands you lemons, you can't make lemonade without sugar and a pitcher, and we've spent years ensuring we have neither.
On a less economic level, the world will benefit from cleaner manufacturing practices, which will not happen as long as stuff is being made in countries with abysmal environmental records like China. If we make stuff here, we'll figure out how to make stuff cleaner, and the whole world will benefit.
Also, a knowledge economy is great, if you have a uniformly well-educated populace. We have a lot of people who aren't educated to the point of being able to take advantage of that. Rather than condemn them to a life of menial work, we can have an economy that produces honorable jobs for people who work with their hands.
A striking story ... but I'm sure any American tourist can slide their credit card into the nearest ATM and obtain Euros. The exchange rate may be tanking, but the banking fees will be less than those moneychangers'.
I'd just like to thank Mr. Frauenfelder for teaching me a great new word today.
re: #21 Belac
Yes, a lower US dollar should improve exports. Alas, I don't know how many of those exports are job-rich, or job-poor. I see far more scrap and commodities leaving the Port of Oakland than I do new cars or other manufactures.
The challenge is to make sure the US doesn't turn completely into a very busy & efficient dismantler of its economic infrastructure.
Yes, inflation IS the increase in supply of money and credit... but you are the only one talking about inflation!
The rest of us are talking about the falling value of the U.S. dollar compared to other currencies. The two issues can be related, but they are two seperate issues.
No one here is argueing for an increase of the money supply, your arguement is a strawman.
Such concepts as the "knowledge economy" willfully ignore the very real fact that the education necessary for one to truly succeed in said economy is quickly being priced out-of-reach for more and more people. Add to that the fact that there will always be a very substantial portion of the population who simply never get that far in the first place. Not because of laziness, mind you, but more because they are never exposed to the possibilities or shown how to get involved.
The "knowledge economy" is a great concept as long as you're in the middle of it. For the others who are outside, looking in, it's a cruel joke.
€1 = $1.58 / £1 = $2
I'm gonna buy all your stuff for CHEAP !!
he he he!
Finally I can actually afford one of those BB / GamaGo hoodies.. :p
NO, my mistake, still £60.. :(
On the other hand, my bank in U.S. will not allow my debit card to be used in the Netherlands due to fraud originating from that country. It's on a list with only 9 other countries.
"Who said anything about creating more money? That is a completly different topic. We are talking about the value that the dollar is exchanged at on the world market... inflationary money supply is a totally different issue. Stop with the strawman arguements already."
Some of that drop is related to the US no longer publishing how much money it is printed. It is an intrinsically related topic. For some reason markets think that means were printing a lot of money.
I'll buy into that lower-dollar-courses-help-US-exports argument as soon as I can buy an EEE PC for 200 Euros, alas, I can't, it costs 300 Euros. (*)
Oh and btw, whoever said that the USA was the greatest exporter is wrong, as a German I can tell you that our government is obsessively watching export numbers to tell the public we are still number one exporter in world - for whatever good this is supposed to do us.
(*) This is a very common phenomenon. Somewhat larger telescopes made in USA usually have prices that make it reasonable to: get a flight ticket to the US, book a hotel, rent a car, go to a telescope dealer, purchase the telescope, fly back to Europe, paying for overweight baggage, pay customs duty and VAT and still paying LESS than just buying it in a shop in Germany, without shipping. Something seems to be going absurdly wrong along the way.
Right on at #36. The knowledge economy can't be at the expense of real work.
"a friend of mine even saw a hip hop video were not benjamins but euros where thrown around ..."
I read a while back that organized crime and the like are moving away from $100 dollar bills and more towards Euros and Pounds to make large, cash only transactions, as you can cram more buying power into a smaller physical space, as both the Euro and the Pound have higher denomination bills, and higher per-unit value.
I've learned more about our economy and the state it's in from reading recent BB comments than I have from reading Market Watch, WSJ, NYT and many other major news publications. And while the truth is scary, knowing what's behind it all makes me feel much better about our situation. Thanks BB posters, you are awesome.
Re: The Knowledge Economy—I don't think it's realistic to believe that we can have an entire economy of knowledge workers. I am a knowledge worker and I often wish that I could spend a third of my time on a community farm or in a community wood shop working with my hands. I know many others who find great satisfaction in building things, fixing things and generally working with something that's not a computer. But here's the thing: It's been my observation that those hands-on, practical professions are undervalued. A mid-level knowledge worker is often paid more than, say, a construction worker with a few years' experience. This isn't a surprise to anybody. In fact, nobody really seems to care. That's really sad.
Small outlets are always thieves, and you should not change your currency there, unless forced to. So they are doing a favour to American tourist (maybe a favor?) by rejecting them.
On the other hand, I don't see how they can't just use a cash dispenser to get some euros.
It's not really a good idea to exchange cash at those places anyway. You get a much better exchange using a bank card at an ATM. Although, these days that still does not make the value of the dollar much better.
So Amsterdam doesn't want American tourists. That's fine. I'll stay the fuck home.
"Why is that sad? Professional athletes and film actors earn huge salaries too, because someone is willing to pay them that, likely because it's part of a sustainable business model. The truth speaks for itself. This "romantic nobility of the blue collar worker" is mythological, like "noble farmers" and cowboys. Get real; there's nothing particularly noble about "working with your hands". If you enjoy it, fine, but don't expect to make a good living out of it."
Why not? Why shouldn't a construction worker or mechanic expect to make a good living doing what they do? Why doesn't everyone deserve to make a good living?
"People are not entitled to having kids or owning a house. Children and home ownership are expensive luxuries; if you cannot afford them, then you can't have them. It's that simple."
Okay, so you're saying that there isn't enough wealth, land and resources in this country for everyone to own a home? But there is enough for a few very wealthy people to own lots and lots of homes and land? Why aren't people entitled to have homes?
Do you simply believe that wealth should be concentrated among a few people? If so, what are your beliefs based on? Do you believe that the privileged are just better than those who don't have money to begin with?
Let me follow that up by saying that I am privileged, being a member of the middle class. But I can see that there's no real reason for it.
But construction workers and mechanics will be paid according to whatever people are willing to afford them. In a capitalist system, the consumer rules. So construction workers and mechanics aren't entitled to a "good living" any more than a blacksmith or a goat herder is. Some occupations do become obsolete. Other occupations are created, such as "robot repairman" or "network technician". We have to adapt to offer what the market wants to buy.
I think these are normative questions.The only problem I have with wealth disparity is that too often it's used to buy government favors and privilege for rent-seeking rather than profit-seeking. But wealth is not a zero-sum game, and the wealth of others does not usually come at my expense. Mostly I'm concerned about real poverty -- people with difficulty acquiring enough to eat, to wear adequate clothing and have access to shelter than protects them from the elements. There are also issues of access to knowledge, literacy (not just in English, but also technological), and the cultivation of critical thinking; but I believe that the continuation of Moore's Law such as with the EeePC will help with that.
I think people deserve decent shelter, but that's nowhere near the same thing as home ownership. Most people rent. I rent; I will probably go my whole life without owning a home. As YesNo said (framed as opportunity cost) in the tent-city thread:Yeah, the "knowledge economy" is pretty much a useless catch phrase batted around by people that don't know any better.
ZUZU: Ah, I see where you're coming from. I definitely agree with you; a "good living" is subjective.
You're making me re-thing wealth disparity and wealth accumulation. Does wealth create poverty? Or is poverty created by a lack of resources, stale economies, lack of knowledge (and thus adaptability)? I think it's both. Wealth isn't evenly distributed and tends to circulate among the, well, wealthy. Wealth rarely if ever reaches the poor. Wealth concentration also has a way of entrenching the rich. Elite moneymakers often direct policy and dictate culture (through movies, television, news media, even education). They mold society to support inequity in wealth distribution. Any society with a big wealth disparity will inevitably support that disparity, even without really knowing it (look around us).
Getting back to menial labor jobs. . . Wealth disparity creates a system that eats away at itself. Construction and maintenance jobs become devalued because the wealthy and middle class aren't willing to pay for the work. Maintenance workers become dejected and aren't willing to improve their skills or craft (it makes more economic sense to get out of construction and work in an office). You end up with poorly constructed buildings and shoddy workmanship. You can see it everywhere.
As for home ownership, I don't really see how you can say that renting is preferable to owning a home. It may make economic sense in that you can invest the money you save, but paying rent ultimately just feeds another system of inequity. How? To landlords, rent is pure profit—money for nothing. Margins between rents and actual costs are huge. Many landlords (and I've seen hundreds of apartments across the country and the world) do not perform basic maintenance on their properties and rarely, if ever, spring for upgrades. Home ownership gives people control over their surroundings. Yes, it takes money and effort to upgrade or refinish a home, but the benefits are well worth it. Renters don't have the option to change their space and must endure depressing dwellings. All the while, landlords collect rent, which is often funneled into the stock market, the great game of the wealthy. Renting perpetuates wealth inequity.
Renters don't have the option to change their space and must endure depressing dwellings.
The last time that I rented, I lived in the same place for twelve years. By the time I was done, the place looked like the Villa of the Mysteries. Everyone that I know who owns rental property would love to have tenants stay forever, pay a reasonable rent and make the place home.
but did it look like this?
http://www.amazon.com/gp/reader/0395284252/ref=sib_dp_pt#reader-link
Renting has become a social stigma in the US in the last few years. Admitting that you rent is like saying that you live in your car.
When I was a lad, my mother bought a practical American car and drove it for twelve years. Now, she'd be looked at as white trash. Middle class expectation is a luxury car with a trade-in every three years.
Having false teeth (as opposed to a set of gleaming veneers) was perfectly normal for anybody over forty when I was growing up. Now, losing a tooth is like admitting to a crack habit.
Somebody has changed the definition of what it means to be a middle-class American. It has emptied our bank accounts, and it has definitely not made us happier.
Wealth is not evenly distributed. Check out the definition of wealth. It means an abundance of something that is held somewhere for the benefit of a few.
How is return on investment any different than profit or money for nothing?
Wealth inequity does affect you, it affects everyone in society. The wealthy get to manipulate laws in ways that you can never hope to manipulate (i.e. changing government law to steal your money through higher taxes on your income than the high incomes of the wealthy). So wealth inequity affects your income.
Sure, you can fix some things in your apartment, but are you willing to hire a HAZMAT team to clean up chipping lead paint or crumbling asbestos? Or what about a cracked foundation? Or a major problem with your steam radiator heat system? You won't fix any of those. And if the landlord doesn't fix them, you'll suffer with the problems.
I'm not talking about Ikea furniture (which is crap). I'm talking about the buildings people live and work in.
but did it look like this?
It did the night that I killed a bottle of Arak.
antinous, I'm saying that there's a stigma to renting. I'm saying that it's inherently unfair to renters.
And what does losing a tooth have to do with anything? Are you saying that dental care is some kind of frivolous expense? People's teeth fell out because they didn't have good dental or health care. Because they couldn't afford it. Because their rents were too high. (Okay, now I'm just being a punk)
I'm saying that our happiness is now defined by our possessions and our appearance, not by our relationships or our interests.
ZUZU: I love Princess Bride. Read that quote and the two or three brain cells in my head lit right up. Thanks for that.
And now that I think about it, it's true. That word does not mean what I think it means. And I also realize that I don't know anything about economics. I just have this vague sense of injustice and a kind of 14-year-old angst about it. And my warped mind fuses it with some kind of crazy utopian philosophy that I must've gotten from watching Sesame Street or something. Or maybe 3-2-1 Contact. No, Reading Rainbow. Definitely Reading Rainbow. Makes my stomach do backflips to realize it, but there it is. Time to pick up that dusty econ book I shoved behind all those bad sci-fi novels ten years ago.
Thanks. I wouldn't have realized it without your clear explanations. And really, I'm not being sarcastic. I'm being honest.
And your furniture isn't crap. Sorry about that.
Yeah, that's what this is all about. Dumb ass American!
#26
"The idea that America can transition to a purely knowledge/service based economy is dependent on the idea that whoever is making the goods will be permanently content with simply providing cheap manufacture in exchange for our ideas."
That, and smart people. (Free after the Big Lebowski)
Also:
#9
"The Dutch might not want to exchange currancy now, but lots of that country's wealth is in the form of real estate holdings in the USA. Ha Ha Ha."
[citation needed]
Currency exchangers refusing to exchange currency is nothing new.
I tried to exchange some danish kroners on hawaii - they refused to take them as they had never heard of a european country called Denmark before.
This was 4-5 years ago.
http://www.youtube.com/watch?v=gldETRlhiXk