I have been watching the currency exchange rate like an obsessive investor watches the stock market since the moment I got here ($1.47 to 1 Euro).
At this very moment the exchange rate is 1.24 for 1 Euro (yesterday at the same time it was 1.25 USD to 1 Euro). That’s a pretty huge decline. Look at this way: if I had bought a E200,000 house with cash when I got here it would have cost me $294,000. Today, the same purchase would only cost $248,000.
Some predict the exchange rate could go even lower (like crash). Which is great for me but not so hot for the EU.
It presents a quandry. Do I buy a ton of Euros now or hold out because they could go lower? If it bottoms out, I could be kicking myself for buying a ton of them at $1.24. On the other hand, the dollar could also crash any day now right along with it, so this could be the optimum time.
What it boils down to is a gamble. Or a semi educated guess. I have to decide who I think will be financially stupider and bet on the other.
Will I throw in my lot with the EU or the US?
Up until now, I‘ve been straddling the fence—buying euros when I need them. I think overall it’s averaged out to a not too terrible exchange rate over the past 12 months (given that the rate was fluctuating between $1.51/E1 and $1.24/E1).
But the current state of things may require definitive action. A commitment executed swiftly and unequivocally. Unfortunately, the more I read, the more difficult it becomes. I have imminent faith in both sets of governments’ability to act stupidly and decimate their economies. They’ve been doing a fabulous job so far.
Complicating matters, I just read an article that said that when economies break down, sometimes the best currency is cigarettes for bribing officials. Maybe I should be exchanging my dollars for cigarettes.
I wonder how corrupt officials feel about pastry.