Jump to content

The Unbelievably Weak Dollar & Expense Of A Sandwich In England


Joe H

Recommended Posts

I just returned from several days in England where I was in London, Manchester and Blackpool. American Express charged me US $2.09 for my charges which included $601 for a night at a Marriott in Mayfair https://www.marriott.com/reservation/rateListMenu.mi , gasoline that was L 102/litre which is US $8.05 per gallon and, perhaps most unbelievably, on the M 40 between Oxford and Birmingham where I stopped at a highway service area for lunch a pre- packaged sandwich (blt with chicken on two slices of whole wheat bread), one ounce bag of potato chips and a small Diet Coke was L 7.25. This is US 15.15!!!

For those travelling in Europe the American Express exchange on the Euro is $1.47. I should mention that as recently as five or so years ago I was charged .84 by American Express. Simply stated the Euro is now approximately 75% more expensive than it was then.

Prix Fixe at Pierre Gagnaire, a Michelin three star in Paris, was E 275 then. Today it is E 295. In American dollars this means that five years ago one paid $231 for the prix fixe dinner while today the same dinner is $433.65. Considering the E 20 increase in the cost of the meal this means that dinner in Europe at this (and most other restaurants) is close to DOUBLE what it was then.

And the Canadian dollar? Then US 1.63. Today it is .99.

Did I mention the Mexican Peso?

And for those who drink wine-any wine from virtually anywhere outside the U. S. Today, in most cases, it is cheaper to buy the exact same bottle of wine in the U. S. than it is in the native country. I have researched the same bottle in Italy, Germany and now England and almost across the board the difference is shocking. This also means that wine is going to become even more expensive here when the current exchange rates are factored into the wine that arrives here in the future.

Link to comment
Share on other sites

For those travelling in Europe the American Express exchange on the Euro is $1.47. I should mention that as recently as five or so years ago I was charged .84 by American Express. Simply stated the Euro is now approximately 75% more expensive than it was then.

And the Canadian dollar? Then US 1.63. Today it is .99.

Did I mention the Mexican Peso?

And for those who drink wine-any wine from virtually anywhere outside the U. S. Today, in most cases, it is cheaper to buy the exact same bottle of wine in the U. S. than it is in the native country. I have researched the same bottle in Italy, Germany and now England and almost across the board the difference is shocking. This also means that wine is going to become even more expensive here when the current exchange rates are factored into the wine that arrives here in the future.

Basically, all that is true, but there are still some caveats. Wine prices, for example, are demand-driven not production cost-driven and as such those wineries who depend on US sales to an important extent will find they cannot necessarily get increased prices 1:1--of course, with all the money flowing around the world these days, hardly any European winery is as dependent on us as they used to be! Let's hear it for more competition from California.

As long as the rest of the (developing) world looks on us as their primary growth market, we'll keep running those trade deficits and the dollar will keep weakening. Makes European vacations expensive, but think of all that cheap stuff at Wal-mart. Everything has its upside/downside.

Look at the bright side. US machinery makers are becoming really competitive in export markets--it could turn into the golden age. Unfortunately that won't work so well with Canadian-sourced stuff. I'm not sure how that all works for you on the net, but I see even more expensive but lucrative trips to Europe in your future.

Meanwhile Janet and I are planning to keep touring the good ol' US of A. We now have our RV (35' fifth wheel pulled by a diesel Dodge truck) and just got back from our skakedown cruise to Michigan (lots of good food and really beautiful scenery in NW Michigan, around Traverse City (home of Don's with its cherry milkshake--all I can say is WOW). Mario Batali, who has a vacation home up there, is right! Toward the end of the month it will be the Southeast coast from Myrtle Beach to Orlando, and I've already been checking out your old posts on those places (Flo's comes to mind).

Hang loose!

Link to comment
Share on other sites

One flaw, John: many of the U. S. factories selling "US manufactured goods" now manufacture those outside of the U. S. FYI Hershey (yes, Hershey!!) now manufactures chocolate in Mexico and India and is also building a plant in China. Hershey has 1,800 employees in their 2.5 million square foot plant in Hershey while five years ago they had 3,500. Five years from now they expect to have 500. Most of the money they and other U. S. manufacturers invest to build plants outside our borders stay in that country. They build those plants with materials from elsewhere; in most cases they use raw goods from elsewhere to manufacture from. And they give jobs to workers outside the U. S. About the only thing that comes back into the U. S. is the profit while the American plants continue to downsize and continue to layoff as do the supporting industries and subcontractors. I could go on at length about the Henredon plant in Spruce Pine, NC not that far from you or Thomasville, NC or Kannapolis (J. P. Stevens which is a ghost town and where two Wal Mart Super Centers have now closed) or almost anywhere in northern Ohio and southern Michigan. I could also talk about the fire sale with a built in 45% discount here for companies from outside the U. S. to buy U. S. owned businesses.

I strongly disagree with your statement that America is the primary growth market. China is with India a close second. Even Las Vegas pales to Macau and Orlando pales to Dubai with Adu Dabi now chasing it. Loudoun County? Las Vegas? Arizona? Riverside County, CA? None of them can even be said in the same breath with perhaps 50 or more areas/cities in China.

Things have changed. And not for the better.

Wine is going to be much more expensive than it is now. And, now, it is much more expensive than five years ago.

Link to comment
Share on other sites

And for those who drink wine-any wine from virtually anywhere outside the U. S. Today, in most cases, it is cheaper to buy the exact same bottle of wine in the U. S. than it is in the native country. I have researched the same bottle in Italy, Germany and now England and almost across the board the difference is shocking. This also means that wine is going to become even more expensive here when the current exchange rates are factored into the wine that arrives here in the future.

When we were in Italy a year and a half ago we saved roughly 5-10% on each bottle purchased there and shipped back to the U.S. at a significant cost (we carried back as much as we could and shipped 2 additional cases). Had we done the exact same thing today we would be overpaying by as much as 20-25% compared to U.S. prices!

Link to comment
Share on other sites

One flaw, John: many of the U. S. factories selling "US manufactured goods" now manufacture those outside of the U. S. FYI Hershey (yes, Hershey!!) now manufactures chocolate in Mexico and India and is also building a plant in China. Hershey has 1,800 employees in their 2.5 million square foot plant in Hershey while five years ago they had 3,500. Five years from now they expect to have 500. Most of the money they and other U. S. manufacturers invest to build plants outside our borders stay in that country. They build those plants with materials from elsewhere; in most cases they use raw goods from elsewhere to manufacture from. And they give jobs to workers outside the U. S. About the only thing that comes back into the U. S. is the profit while the American plants continue to downsize and continue to layoff as do the supporting industries and subcontractors. I could go on at length about the Henredon plant in Spruce Pine, NC not that far from you or Thomasville, NC or Kannapolis (J. P. Stevens which is a ghost town and where two Wal Mart Super Centers have now closed) or almost anywhere in northern Ohio and southern Michigan. I could also talk about the fire sale with a built in 45% discount here for companies from outside the U. S. to buy U. S. owned businesses.

I strongly disagree with your statement that America is the primary growth market. China is with India a close second. Even Las Vegas pales to Macau and Orlando pales to Dubai with Adu Dabi now chasing it. Loudoun County? Las Vegas? Arizona? Riverside County, CA? None of them can even be said in the same breath with perhaps 50 or more areas/cities in China.

Things have changed. And not for the better.

Wine is going to be much more expensive than it is now. And, now, it is much more expensive than five years ago.

I'm going to respectfully disagree with the proposition that it is somehow bad for our economy in the long-run for American workers to have to compete with workers whose wages are lower. Surely we would be worse off if laws were enacted to prohibit Xerox, Canon and Hewlett-Packard from selling copiers because they put office typists out of work. The same is true regarding competition from lower wage earners.

I also disagree with the notion that "profits" are inherently bad and that it is a problem that profits are the "only thing that comes back into the U. S. " What else is supposed to come back? Not imports, right? Because aren't imports bad? And what do the profit-earners do with these profits when they receive them? Burn them? Put them under the mattress? Or is it more likely that they use these profits to purchase goods and services; or reinvest them in their - or others' - businesses?

Link to comment
Share on other sites

I'm going to respectfully disagree with the proposition that it is somehow bad for our economy in the long-run for American workers to have to compete with workers whose wages are lower. Surely we would be worse off if laws were enacted to prohibit Xerox, Canon and Hewlett-Packard from selling copiers because they put office typists out of work. The same is true regarding competition from lower wage earners.

I also disagree with the notion that "profits" are inherently bad and that it is a problem that profits are the "only thing that comes back into the U. S. " What else is supposed to come back? Not imports, right? Because aren't imports bad? And what do the profit-earners do with these profits when they receive them? Burn them? Put them under the mattress? Or is it more likely that they use these profits to purchase goods and services; or reinvest them in their - or others' - businesses?

It is a misconception that this is limited to workers. It includes engineers, too. At one time it was thought that only basic engineering could be done in, say, India. Now most companies realize that Indians are every bit as creative as we are if a bit of American culture is introduced to flavor their perception. The result is that an engineer in India is paid roughly one fifth of what an engineer in America is paid. But it's not just engineering and manufacturing, it's also now spreading to include design.

Perhaps the most important point that I would make is my specific examples of Kannapolis, Spruce Pine and many towns in Ohio, Michigan and elsewhere: at some point when enough jobs leave those who would buy the products sold by Costco and Wal Mart also leave. And Wal Mart and Costco close.

One hundred miles south of Kannapolis is the literally booming and emerging area of Spartanburg and Greenville. There are at least five major international companies who have large plants there. Workers there are paid good wages for those areas, perhaps by most definitions very good wages. Those wages are also a great deal lower than what it costs GM, Ford, etc. to manufacture in the Midwest and elsewhere.

With "globalization" many companies who reinvest profits are reinvesting them outside of the U. S.

Somehow, for me, it seems that there is a middle ground that will allow product, engineering and design to continue in the U. S. with little outsourcing. If there isn't America is going to be very different in a decade or so. There are going to be more areas like the ones I've mentioned. Many more. I also realize that this is a debate that is going to continue ad infinitum. But I come from a different side "of the table" than you may suspect. I am not against profits-you have no idea how much of an obsession they are with me. But I believe we are incrimentally cannibalizing ourselves by the extent with which we now outsource. There really must be a middle ground for wages. There must.

There is also the concern that at some point wages in China and India will begin to escalate. In many areas, in many industries this has begun. At some point in time it is perhaps realistic to me that their goods and services will no longer be nearly as inexpensive as they seem to be today. And at some point they will no longer peg their currency to our dollar or continue to invest in the U. S. At that point it may be literally too late for us to recapture so much of the ground we have lost.

Link to comment
Share on other sites

I ate at both Per Se and El Bulli over the summer, and El Bulli was cheaper (and worlds better). Eating in Spain is still a relative bargain, I would take the 140 Euro meal I had at Arzak over any meal I've had in the US anyday. On the other hand we picked Spain over Paris because my wife cannot stomach the cost of eating in Paris.

Link to comment
Share on other sites

One flaw, John: many of the U. S. factories selling "US manufactured goods" now manufacture those outside of the U. S. FYI Hershey (yes, Hershey!!) now manufactures chocolate in Mexico and India and is also building a plant in China. Hershey has 1,800 employees in their 2.5 million square foot plant in Hershey while five years ago they had 3,500. Five years from now they expect to have 500. Most of the money they and other U. S. manufacturers invest to build plants outside our borders stay in that country. They build those plants with materials from elsewhere; in most cases they use raw goods from elsewhere to manufacture from. And they give jobs to workers outside the U. S. About the only thing that comes back into the U. S. is the profit while the American plants continue to downsize and continue to layoff as do the supporting industries and subcontractors. I could go on at length about the Henredon plant in Spruce Pine, NC not that far from you or Thomasville, NC or Kannapolis (J. P. Stevens which is a ghost town and where two Wal Mart Super Centers have now closed) or almost anywhere in northern Ohio and southern Michigan. I could also talk about the fire sale with a built in 45% discount here for companies from outside the U. S. to buy U. S. owned businesses.

I strongly disagree with your statement that America is the primary growth market. China is with India a close second. Even Las Vegas pales to Macau and Orlando pales to Dubai with Adu Dabi now chasing it. Loudoun County? Las Vegas? Arizona? Riverside County, CA? None of them can even be said in the same breath with perhaps 50 or more areas/cities in China.

Things have changed. And not for the better.

Wine is going to be much more expensive than it is now. And, now, it is much more expensive than five years ago.

You're correct that (European) wine will be more expensive, but I'm saying it will rise mostly with what the market will bear, not with much to do with costs or exchange rates. Prices are a function of how much producers can charge and little else, in wine and in most other things. Competition helps keep prices pegged loosely to costs, but it's a very imperfect relationship. True, since those European wines have many markets other than the US, moreso than in the past, the US price will increase more than what it would have otherwise, but for many reasons it's still not a 1:1 relationship with exchange rates. And there's plenty of great wine out there at good prices, more all the time, and will continue to be--we just need to expand our horizons a bit sometimes.

If you're really concerned about the US losing manufacturing, then you should welcome the cheap dollar--it will help US plants export more, and foreign plants will have a harder time selling to us. The ownership of those plants, whether it is domestic or foreign in either case, is essentially irrelevant. What matters is location and local costs.

I said the US is the primary growth market for places like China and India, not that it is growing as fast as they are. The US is where they are selling their stuff, and that's how they are growing so fast. But that's fine--we have been getting cheap stuff that way from a succession of producers since the 1950's, and the resulting "trade deficits" and "weakened dollar," which have been going on for at least 5 decades, have not collapsed our economy nor led to ruin. And contrary to the doomsayers in the press and others, it won't now either, but this is not the place for a discussion of international economics. Suffice it to say that all the hand-wringing in the press about globalization and the rest of it, however well-meaning, is mostly nonsense. Go back and look at press accounts 30, 40 years ago--you'll see the same rhetoric. "Globalization" is nothing new--the entire US railroad industry was financed in the 1850-1880's mostly with loans from Britain, and built by cheap imported laborers who stole the jobs from "Americans.". Jobs have always moved around, and will continue to do so. Manufacturing jobs are going elsewhere, and that's unfortunate for workers who can't or won't adapt, but change is a fact of life for us all, always. We are very competitive in many areas, but not ones that are visible at Wal-mart. The bottom line is the US is very prosperous and its prosperity is growing, and that isn't going to change--we'll be fine.

That said, it's certainly true the cost of vacationing in Europe will be high (to us) for a while and maybe a long while. But not forever. Meanwhile, contrary to what some may think, there are many other nice places to visit, with great restaurants and great wine. Maybe it's time for a fresh look.

Link to comment
Share on other sites

I ate at both Per Se and El Bulli over the summer, and El Bulli was cheaper (and worlds better). Eating in Spain is still a relative bargain, I would take the 140 Euro meal I had at Arzak over any meal I've had in the US anyday. On the other hand we picked Spain over Paris because my wife cannot stomach the cost of eating in Paris.

How did you manage a reservation at El Bulli? I tried that once, with laughable results. What's the secret?

Link to comment
Share on other sites

I emailed them a few times. You have to email them the second week of october for the following year. The emails I sent that said "I'll go whenever" weren't sucessful, but the ones that gave them a more specific timeframe worked. I've also heard that it is possible to get cancellations if you are in the area, and there was a party dining near us that had got their reservation the same week.

I really think, despite the weak dollar, that one dollar in Spain buys you better food than one dollar in the US does.

Link to comment
Share on other sites

Thank goodness for Asia, Africa, Australia, and Central and South America, or we'd really be in a pickle.

The Australian dollar is $1.12 to the US Dollar and the New Zealand dollar is $1.32. Five years or so ago the Australian dollar was $1.70 and the New Zealand about $2.50. The Mexican Peso is 10.8 to the dollar. It has been almost 14 to the dollar. I believe the Rand is similar.

Link to comment
Share on other sites

I really think, despite the weak dollar, that one dollar in Spain buys you better food than one dollar in the US does.

maybe you can argue that the food in spain is better than in the u.s., but we spent a considerable amount of money on dining in barcelona -- and that was a couple of years ago, when the dollar was weakening against the euro but stronger than it now stands. the best restaurants in barcelona tend to be expensive, though maybe they are a bargain -- compared to eating at the top spots in paris.

Link to comment
Share on other sites

maybe you can argue that the food in spain is better than in the u.s., but we spent a considerable amount of money on dining in barcelona -- and that was a couple of years ago, when the dollar was weakening against the euro but stronger than it now stands. the best restaurants in barcelona tend to be expensive, though maybe they are a bargain -- compared to eating at the top spots in paris.

The two meals I mentioned were within 10 dollars of each other, and we had better wine (and more of it) at El Bulli. We also felt like we did not have to order off the lower end of the wine list to stay in three figures, while we definitely did at Per Se.

Link to comment
Share on other sites

The two meals I mentioned were within 10 dollars of each other, and we had better wine (and more of it) at El Bulli. We also felt like we did not have to order off the lower end of the wine list to stay in three figures, while we definitely did at Per Se.

i don't doubt this at all. my point was that people shouldn't go to spain expecting bargain-priced meals at top restaurants. a moderately-priced restaurant for lunch in barcelona was $125, i recall, and today would be maybe $150 to $160. (this was the least expensive place we visited, by about $100 and more on average.) they should go expecting to find really good food

the wine in spain was often quite exciting at a considerably lower cost than you would find it around here, and much of it would be hard to find. maybe i'm wrong, but restaurant mark-ups on wine seemed lower than in the u.s.

Link to comment
Share on other sites

El Raco de Can Fabes, El Bulli, Schwarzwaldstube (arguably Germany's best restaurant) and Le Calandre (arguably Italy's best restaurant) are all Michelin three stars. All are also E 150 or less for their prix fixe which, generally, is ten courses or more.

At the other extreme there is Marc Veyrat ( http://www.marcveyrat.fr/en/marc-veyrat.htm ) whose tasting menu is E 338 and, when paired by him with wine is E 425. At the current rate of exchange it means that this is US $616.00 per person + tip. We're talking US $1300+ for two people to have dinner there. Of course under "special offers" on his website you'll note the rate of E 1425 for two people to have dinner, breakfast and spend the night. That's US $2080.00.

Just makes me miss Maestro and a night at the Ritz that much more. And, perhaps remarkably, it makes The Inn at Little Washington look like a virtual steal.

Link to comment
Share on other sites

The Australian dollar is $1.12 to the US Dollar and the New Zealand dollar is $1.32. Five years or so ago the Australian dollar was $1.70 and the New Zealand about $2.50. The Mexican Peso is 10.8 to the dollar. It has been almost 14 to the dollar. I believe the Rand is similar.

But even so, you'd have to look pretty darn hard to spend US$15 on a prepackaged sandwich and chips in Australia, Mexico, or South Africa (never been to New Zealand).

I'm not saying the dollar isn't in crap shape; I'm saying that getting a second mortgage to go to London and Barcelona isn't the only option. There are, in fact, other destinations where you can get a heck of a lot more bang for your buck.

Link to comment
Share on other sites

I believe the Rand is similar.
The rand's cycle has been different, due to internal RSA forces. It started going down sooner than other currencies, but hasn't fallen as far, particularly in terms of real buying power in RSA. It's a great time of year to go, too!
Link to comment
Share on other sites

Apropos the original posting in this thread, the following is a quote from a story about the weak dollar in this morning's NYT:

"Analysts see little mystery in the American position: at the moment, a weaker dollar offers more benefits than a stronger one. The cheaper dollar offers a lift to American exporters by making their products competitive in many parts of the world. And while a weak dollar usually makes imports expensive, import prices have so far climbed less than other currencies’ values because foreign producers have kept prices low to preserve market share in the United States.

“Implicitly, Paulson and the Federal Reserve are happy with a gradual fall in the value of the dollar,” said Nouriel Roubini, an economist at New York University. “They’ll never say they favor a weak dollar, but the benefits to the U.S. in terms of competitiveness are significant.”

Translation: The markets are now sticking it to them as they have stuck it to us in the past.

For those of you out there who insist on spending your money (US dollars) wining and dining in Europe, it's not the end of the world, but be prepared to spend more than you might like for the foreseeable future.

Here is a link to the article:

http://www.nytimes.com/2007/10/10/business...ml?ref=business

Link to comment
Share on other sites

From a good friend of mine: "we went to Corsica after the Oktoberfest and stayed in a lovely 4 star hotel La Villa Calvi, in Calvi. The restaurant was a 2 Michelin star which the other couple we were with invited us to dine at. The service was poor, presentations exceptional, food good but prices high. Two bottles of good Corsican red wine, aps and entrees for four was roughly one thousand dollars. We did not order dessert, which is what I wanted to tell you, the dessert menu had a variety of selections which were from $32 to $35 each, yes thirty two to thirty five U.S. dollars each, one dessert per person. Sheila and I had a Kir Royal and glass of champagne, one each on the veranda prior to dining that cost 45 Euro, amazing huh. That's US $65.00 for a Kir Royal and a glass of champagne."

My wife and I have gone to Venice or Florence every year for fourteen years in December or January. This year we are staying home.

Link to comment
Share on other sites

From a good friend of mine: "we went to Corsica after the Oktoberfest and stayed in a lovely 4 star hotel La Villa Calvi, in Calvi. The restaurant was a 2 Michelin star which the other couple we were with invited us to dine at. The service was poor, presentations exceptional, food good but prices high. Two bottles of good Corsican red wine, aps and entrees for four was roughly one thousand dollars. We did not order dessert, which is what I wanted to tell you, the dessert menu had a variety of selections which were from $32 to $35 each, yes thirty two to thirty five U.S. dollars each, one dessert per person. Sheila and I had a Kir Royal and glass of champagne, one each on the veranda prior to dining that cost 45 Euro, amazing huh. That's US $65.00 for a Kir Royal and a glass of champagne."

My wife and I have gone to Venice or Florence every year for fourteen years in December or January. This year we are staying home.

Why not travel to South America? Argentina and Chile would be pretty nice in December or January.

Link to comment
Share on other sites

Why not travel to South America? Argentina and Chile would be pretty nice in December or January.

Or try Puerto Rico. No exchange rate to worry about, great food is easy to find, and the beaches are empty in winter because the locals think that 85 degrees is much too cold.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...