Friday, February 08, 2008

Americans Have ALWAYS Traveled with Dollars

Dollar SignAnd most businesses in the popular tourist destinations - and even cab drivers in the cities - accepted dollars. And that is perfectly OK. Just a reflection of the fact that it is wise to cater to your customers Though travelers were always warned that you would get a better exchange rate if you used either your credit card or the local currency. I guess it is true that most Americans never go anywhere.

Euro Sign
Now that a lot of Europeans are traveling to the US (with Euros? Heavens!) some American businesses have decided to accept the foreign currency. This has a lot people in twisted in knots. The War on Guns is pretty typical. They seem to view it as a sign of the end of the world. And while the cheapness of the dollar is generating all of that tourism, it isn't directly responsible for people accepting Euros.

And why do you care? It isn't, as the War on Guns seems to think, that the Euro has become "legal tender" in the US. It hasn't. You don't have to accept Euros. But if you say no, to perfectly good currency - and yes, you better know how to detect the real thing versus fakes - and your customers walk across the street to your competition, you have no one to blame but yourself. I am sure some reactionary will introduce legislation forbidding acceptance of foreign currency. I won't even be surprised if they forget to exclude banks and currency exchanges - (where do you think the name originated?) from the first version, and wreak havoc on some financial market. Should airlines based in the US accept foreign currency for travel? No? Then you better not try to book a flight on Virgin Atlantic using dollars.

But the War on Guns is right about 1 thing, the dollar is in the toilet. And the federal government just decided to print more money, and hand it out to everyone, thus making the problem worse. That will stimulate the economy. Just like it did under Nixon. (Does anyone remember what inflation was like in the 70s? If you don't remember, look at this.)

Everyone wants to place blame (or credit in good times) for the economy on the President and the Congress. The truth is they really only have the power to screw up. And printing money - generating inflation - is one of the things they always do. And the 800 dollars they are going to "give you" is an act of printing money. It will make every dollar - in your savings, in your paycheck - worth that much less.

UPDATE: See the comments for a rebuttal.

No comments: