Brad DeLong's Semi-Daily Journal (2004)

Whereas traveling around Europe when $1 ranged between Eur 0.95 and 1.02 (as I did in 10-11/02) was at least easy from a conversion perspective.

I was mostly in Germany and Austria, and it seemed that you could purchase a dollar's worth of goods for about EUR 0.85 in Berlin, so you'd be on the short end of the stick there. Don't know about Italy, but the Italians I met all thought Germany was cheap.

But hey, at least the coffee is good!

If you want to go waaaaay back, when I was at my first Air Force assignment in Germany (1984-87), the exchange rate at one point was $1 = 4 DM. Now that was sweet!

In every browser I know, you can produce a EURO sign by entering € in the HTML document. Let's test it... €1.25 ... did that show up as anticipated?

Travelling around Japan when then $.009 = one Japanese yen should be amazingly relaxing, but apparently in the Mysterious East things work differently.

Seemingly when the euro was introduced there was a willingness to go head-to-head with the dollar in the public opinion sweepstakes, sort of like Britney vs. Christina, or New Coke vs. Classic Coke. Is there any real significance to this?

I remember being told that Reagan's advisers had to keep trying to tell him that a "strong dollar" is not the same thing as a strong economy.

Gee, on my computer, I can get a € symbol just by pressing Option-Shift-2. No HTML gobbledygook needed.

I never complain too much about exchange rates, it's always the Purchasing Parity that is extremely nervewracking.

marcus: Well, by the end of 1987 the Dollar had fallen to DM 1.80 on it's way to DM 1.50.

I too was in Germany at the time, being paid in DM. A friend who was also there, but being paid in $$, complained to me about the horrible German inflation and how expensive everything was becoming. I tried several times to explain that it wasn't inflation (Germany have virtually no inflation), but rather a weak dollar caused by the massive US deficit, but she never understood.

Yeah, she votes for Bush.

Of course if Brad gets to the UK, he'll have a nice and simple conversion: $2 to the pound. Simple, and horrifying.

Imagein what the last four years have been like: Dollar denominated salary, euro denominated expenses.

Imagine what it was like retiring to Greece in August 2003 when the ratio was $1 to 1.10 euros. Now the value of the dollar fluctuates between 75 and 80 cents. Not exactly what we'd planned but we're sticking it out.

Schiphol, Amsterdam, the Netherlands, July 2004
- Dad... is their dollar worth more than ours?
- No, replies the obviously annoyed dad, [mumbling] it's all these commissions...

It struck me then that we indeed have a weird psychological relationship with our currency. Is there another dad, in an other airport, who replied to his son:

- Nice catch, son, that's exactly why your mom got her job back at the factory last month.

I am not necessarily arguing that a weak dollar policy is, overall, a good thing for America, but it's strange how people's thinking about their currency seems to begin and stop with pride. Of course, to their defense, they may be unconscously saying that it's painful as a tourist to buy an appreciated currency but my point is that people seem relatively more rational and knowledgeable when it comes to the stock market than the FOREX.

Must be that mercantilist ideas are, for some reason, there to stay forever... the same way that it's no use to tell people they catch colds in the winter not because the weather gets colder but because they all stay warm inside together more often than during the rest of year.