Admittedly this is more immediately relevant to me than to most of the people reading this I thought I might make a note of it.
My money is disappearing. No, I’m not spending it willy-nilly on trinkets or booze or lush accommodations – trust me there. But every day my bank account holds less value. The invisible hand of the currency markets is reaching in and snatching my dollars and cents.
I haven’t watched or read much news in the past couple months but every time I walk past a currency exchange I notice the difference between the Dollar and the Euro and the fact that it is slowly growing. Slowly because I see it nearly every day. In the aggregate the Euro is moving quite quickly North of the Dollar.
After a conversation with a Canadian in my hostel in Belgrade, where I was informed the Canadian Dollar had reached parity with the US Dollar (1=1), I decided to look into it a little further. Sad thoughts of all the cheap sushi I’d had in Vancouver, BC flashed in my mind. Ahh, the good old days.
I’m not an Economist so my description of things will be sketchy at best so let’s get out the charts and graphs…
Here is the 5 year performance of the dollar to the Euro
Look closer, this is what it feels like in my bank account…
1 year USD to EUR performance…
And here is the Canadian “Looney” to US Dollar over the past 5 years.
All of this is great news for other countries that want to buy US goods but bad for countries that want to sell us things. It’s also bad for us if we want to buy things from other places. Which, with a nearly $800 Billion dollar trade deficit, we do A LOT of.
I won’t attempt to discuss the finer points of monetary policy, as I would have to do a lot more reading to teach myself enough to scratch the surface of that, but I will say that the US Dollar slipping nearly 40% to the Euro and finding parity with the “Northern Peso” is bad for all of us.
Here is The Economist magazine’s take on the Canadian situation.