My niece hopes to go to Europe with her new in-laws. Now that trip will be a whole lot cheaper. Collectively everyone who is paid in dollars has received a pay raise in the past couple of months. And it's been a healthy one. The dollar at its weakest point took $1.60 to buy one euro. On Friday it took only $1.26. That's a gain of 21%.
The rest of you (not planning a trip to Europe) probably don't care, but you should. The precipitous fall in the dollar has led many in this region to question why currencies here are pegged to the dollar. While the rise in the dollar may be short lived, it has killed the constant drumbeat of ending the dollar peg. Also, a stronger dollar will help keep inflation low in the US. To get out of this mess will require a huge fiscal stimulus. Think FDR. A stronger dollar will help keep that stimulus from causing inflation.
Meanwhile, oil was at a high of $147/barrel this summer and closed at $64. That's a 56% drop. More good news for Americans. According to Gasbuddy the price of gas in CR is $2.39.
In real terms that's still a loss of revenue for this region: Oil down 56% with the dollar up 21%.
I have paid $2.24 a gallon as recently as Saturday. Very strange to be able to fill up my tank for under $30. I am loving THAT part!
ReplyDeleteYesterday I saw gas for $2.15 a gallon.
ReplyDelete