Well, many of us are out of the country and travelling to various countries around the world and no doubt spending lots of money. Personally, I am here in England suffering from serious sticker shock at the prices. Last year when I was here taking classes it was $1.85 to the British Pound. This year I have to give $2.00 to get 1 British Pound and just four-five years ago I only had to give $1.65 to get a British Pound. This country is almost 25% more expensive for me than it was just a few years ago. The dollar is weak and from my perspective that is terrible...I am make dollars, I am travelling on the dollar and getting poor by the minute. I just had a $7 coffee this morning!But really that is only one side of the story, while a weak dollar may not be my preference, its not all bad. Check out the following article from the NY Times, are you starting to see a pattern here? It is a great source for business news!
http://www.nytimes.com/reuters/business/business-volkswagen-us.html
Argentina faces a similar situation...a weak peso and for Argentines who want to travel it is extraordinarily expensive for them to go to the states....but what are some ways that a weak peso has helped Argentina? Give only 1 example...leave some ideas for other folks!
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Well, a strong dollar is nice for traveling no argument there. On the other hand having a weak dollar brings in foriegn companies, like the article pointed out. Then if foreign companies come in they bring money and boost the economy and strengthen the dollar.
Now to point out a good aspect to the weak peso, well since the peso is weak Exxon Mobil decided to move their accounting department down to Argentina which in turn brought my dad who brought me. So with out the weak peso I would not be here right now, cant make a better point than that. well i guess my point will stay at because they have a weak peso it makes foreign investment more likely which helps to boost the economy.
An example could be that the production of things have increased in Argentina.. meaning more people have jobs
Well, ive lived in Argentina for around 13 years..and I remember when the exchange rate between the argentine peso and the US dollar was 1:1. Well with Argentina’s economy it was way too much trying to maintain the currency so strong, there were more imports than exports which created a deficit in the balance of payments because too much capital was leaving the country (im not very sure if what im sayng is correct!). It was a period of chaos in which the argentine government lost control of many businesses as well, trying to live up to the exchange rate. And of course the famous corralito took place and now the ratio between the US dollar and the peso is somewhere around 1:3, which has benefited argentina A LOT from that time of chaos..Argentina has experienced a lot of growth since those menem and de la rua times..one thing is that foreign goods are more expensive now..argentine produced products are cheaper and therefore national industry is growing..meaning there’s less imports now and export has increased curing that deficit in the balance of payments I mentioned above. Also the argentine workers who live in argentina and get paid in dollars (though they are a minority) benefited from the weakening of the peso. From what my dad said the argentines who used to work for his company benefited from the change because it made the dollar a stronger currency with greater value in the country.
Stronger foreign currencies (i.e. pound or euro), can help the US's-- or other countries in a similar position--economy. For example, tons of Brits are traveling to NYC for the long weekend (I witnessed that 2 weeks ago, and a British friend told me that her friends were actually considering going to NYC the week of Victoria Secret's semi-annual sale. No joke.) Also, this morning in Greece we were surprised to hear that our boat captain/carpenter could afford to travel to Argentina or the States due to the euro's strength. I have seen VERY few Americans here because the $ is so weak-- consequently, Americans are spending their money in the US this summer, and the US is experiencing economic growth from tourism and foreign industries.
---- Ms. Stephens, I'm trying my best to get internet access, but it will be hard the next 2 weeks. Oh, on our remote Greek island there are 3 radio stations, and in between Greek pop songs Juanes was played! GLOBALIZATION at its peak!
I am in Mexico right now, and have been here for two weeks already. The dollar is quite strong to the Mexican peso, which is great since me and my mom can do a lot of shopping and good eating and anything we like for relatively little money. Inversely my last summer vacation I went to Italy with my friends, and I had about the same amount of pocket money, but ended up barely shopping, and survived on a diet of pasta and pizza to save money. I remember just renting an umbrella at the beach was like 10 dollars. While in Cancun the beaches are much nicer and don’t cost a thing.
What I find interesting is, how come when the dollar is falling to the euro, it seems to stay just as strong to Latin currencies? As if the flux between the Euro and the Dollar were separate from the Dollar to Latin American countries' currency.
I agree with what Tyler said - with the weak dollar, the US economy is growing. And because Americans can't afford to travel abroad, they are spending their money within the states. Also, because the dollar is weak compared to the Euro, Europeans are traveling to the US and spending their money there as well. This therefore keeps the money within the US for the economy to grow, therefore the weak dollar can turn up on the bright side! The negative side, as already pointed out, is it is difficult for US citizens to travel abroad cheaply, especially in England.
I have mixed feelings about VW's choice to open up in the US. First of all, it seems logical to promote VW's in the US, but I don't think the dollar will stay weak for long. The dollar is just going through the business cycle - it may be low now, but will rise again soon. Because of this, in the long term, the same effects will not continue. Eventually the cars will be expensive to produce in the US. In contrast, I think it is a novel idea to promote VW's in the US and I think the European car brand should take advantage of the weak dollar.
An example of how the weak peso can be good for Argentina is that a lot of Americans are traveling to BA to study spanish, etc. After school got out, my family traveled to Mendoza and we ran into a bunch of young adults who had just graduated from college. They were traveling around South America and were spending a lot of their time in Argentina because it was cheap for them to travel, etc. So just like the US, because the peso is weak, it is encouraging foreigners to visit and get a lot for their money.
--Ms. Stephens -- I'm not going to have a computer for the next week, week and a half,sorry! This summer is hectic! --
Well i agree that a weak peso might not exactly be a bad thing since it has indeed attract a lot of tourists and foreigners. My ex-spanish teacher (private tutor) claimed that he has a couple of foreign students who come to Argentina just to learn Spanish and he's earning a lot from them compared to the local(and my family as well).
Also, Argentina's economy has been growing pretty fast and their debt is dwindling extraordinarily quick despite the downfall of its currency. A weak peso could have bring in more investment and promote more exportation which contribute to the speedy recovery of its economy.
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