The Dollar versus the Euro

Just when you think the conversion rate couldn’t get any worse, the Federal Reserve cuts the US interest rate by .25% of a point. The stock market responds as if it’s a roller coaster that’s suffering from whiplash and the dollar descends even further into the tank. No Dorothy, this isn’t funny. For American Expats living in the EU on a dollar salary, we’re getting awfully tired of eating pasta.   As of November 7, 2007, the dollar hit an all time record low: 1.00 Euro =  $1.46575. Some people are projecting the worst is yet to come.  Economists proffer different theories. So what else is new? Some say the dollar will get stronger while others debate that theory.  Factor in the cost of crude oil going through the sky.  What about the balance of trade? And then there’s the infusion of capital from overseas pension funds and many international and institutional investors view dollar investments as the best means of making some of the most profitable returns of the decade. Foreigners are buying up property in the US as if there’s no tomorrow. Areas of Florida are becoming foreign enclaves where you’ll hear not just Spanish but French and Italian. Quite possibly, buyers are taking advantage of properties that are casualties of sub-prime mortgages. Many of my French friends are considering and buying second homes in the US. Another advantage, besides the price, is their children can learn English with true American accents.  The dollar is losing out but English is still the lingua franca, most especially in the world of business and trade.   Plus, when the dollar gets stronger, these foreigners will have made some money due to the currency play.  In the meantime, they’ll be living like virtual millionaires. Chances are good they’ll be spotted in high-end stores buying all types of goods, which are expensive in the EU.   An investor from the UK has recently purchased two multi-million dollar apartment buildings in Boston.  Expect to see more of those types of transactions unless the dollar should do an unlikely about face.       Thirty years ago, I rented a house for three months in a miniscule village in Majorca. Within days, everyone knew one another since the town’s square was the only place to gravitate. There was a café on each side, and the villagers (mainly Brits) would go from one to the other depending on where the sun was shining the brightest.   Children ran free. My son was especially partial to one bar since it was the only one that had a fuzzy wuzzy television. He had a chocolate milk allowance and it’s amazing he didn’t return to the States with malnutrition. Those were the days you could buy a liter of wine (if you brought your own bottle) for five cents a liter. I’m not vouching for the caliber but no one appeared to care. I couldn’t understand why the principle conversation (each and every day) was centered on currency fluctuation. What did a few pesetas matter?  I wasn’t living on a pensioner’s income and simply couldn’t relate.   Now I understand… and how! Rather than inviting friends out to dinner (after all, they’re guests in my city), I invite them to the apartment for dinner. I say they must be craving a home cooked meal. Realistically, I know that isn’t the case, but please spare me from those awkward moments when the bill is placed on the table.  If I’m specifically invited to be their guest, I insist they come here for an aperitif. The other day I had vodka at the bar in the Meurice Hotel and it costs 20 Euros. Happily, the bartender gave me an International Herald Tribune that now costs approximately $3.00. No wonder so many people have resorted to reading news on the Internet.  I took my time drinking that silver-lined vodka; there was no way I was going to order a second drink. Skip that I might have been drunk (unlikely from a one-ounce pour), but I would have fainted after forking over my credit card.    Some friends who come to Paris each year — and allegedly know what to expect — were dumbfounded during last week’s trip. Even though I suggested they rent an apartment for a variety of personal reasons, they didn’t. The couple was quick to bemoan the currency exchange. They hadn’t eaten breakfast in the hotel once. Jerry would go out and buy croissants and bring them back to the room. They purchased a hot pot so they could make tea and coffee. Monoprix was their source for paper everything. Ronnee laughed and admitted they were eating lunches in restaurants but when it came to dinner, they had resorted to eating at "home."   The couple shared a few giggles. They’d purchased some wonderful cheeses and couldn’t wait to eat them for dinner. Even with the dollar, cheese is definitely less expensive in France than in the US – especially when you consider the quality.   They opened the refrigerator and served themselves a lovely selection accompanied by fruit and wine. It wasn’t a bad way to eat dinner. If it only weren’t for the fact that the room smelled for the subsequent two days did they began to question their selection. It only goes to show that cheese stores must have better ventilation.    © Paris New Media, LLC   [email protected]