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| Europe |
| Burger and fries for $21 in Czechia |
| 2007-11-23 |
| Methinks the euro is headed for the mother of all dives. Why bother opening a factory in Prague when New York is cheaper? PRAGUE -- When I first moved here in 1991, I remember hiking with my girlfriend in the mountains in Slovakia. We had just finished a long climb and had stopped at a little isolated chalet for a bite to eat. "Pssst," I heard a man's voice from the side of the cabin. "Do you have any dollars you want to sell?" Those were the days. The dollar was so popular back then that there were literally guys in the woods looking to buy them. The official rate at the time was around 25 crowns to the dollar, but I think we bid that guy up to 30 or 40 -- the best currency trade I ever made. The mighty sure have fallen. Pity the poor American tourist these days who arrives in Prague with a wallet full of dollars and some outdated notions of how everyone loves the greenback. He's in for a shock. The dollar peaked at about 40 crowns five years ago and has been falling ever since. The drop accelerated this year as the dollar plunged below 20. Now it's trading just north of 18, and no one dares predict a bottom. Taxi drivers long ago stopped taking them. Shop clerks look at them like they've never seen a dollar before. I even think I detected a sneer by the girl at the exchange counter the other day as I waited for some friends to change money. Dollar holders can't seem to buy any respect. Some of my compatriots have weathered the storm by buying property or finding jobs paid in euros or crowns. Other dollar-earners rush with their weekly paycheck to fast convert it into a stable reserve currency -- like the Czech crown. I was lulled for a time by the dollar's strength -- remember those days not so long ago when the Fed actually intervened to support the euro? -- and was slow to adjust. This year I finally decided to buy an apartment and have been racing against the clock to cash out of dollars. Each day's delay seems to kick up the price by a couple thousand. Prague used to be known as a cheap destination, a Paris for the young post-Cold War generation. I still remember fondly all those travel articles about $2 meals and quarter glasses of beer. Beer is still relatively affordable at between $1-2 a glass, but the fun stops there. I wandered into a restaurant the other day for lunch and ordered a cheeseburger. It was a nice place, but nothing special. The bill came to $21, fries included. For the moment, I'm being prudent and hoping for the best. While no one expects the dowdy dollar to rebound any time soon, I'm praying that at least the currency finds a floor. In the meantime, I can console myself with one of those $2 glasses of beer. |
| Posted by:Zhang Fei |
| #10 I call BS. Was in Prague a couple a months ago after the dollar had substantially moved against the Euro and the Crown. Stayed in a legitimate 4 star hotel for about $140/night, had an an outstanding romantic candlelight dinner for about $80 and had to spend some greenbacks the first day in town which were happily received. The mind reels contemplating what kind of hotel you'd get for $140 a night in NYC. |
| Posted by: Classical_Liberal 2007-11-23 22:38 |
| #9 Yep, Redneck Jim, I am sitting on any USD I have and I am getting, tooth and nail. I don't have enough to become rich, but I am sure it will be counted one nice day. Zhang Fei: Like I said, the European currencies are on the verge of a major collapse. It's just a matter of a few years, if that. Yea, it is obvious, and few years is my guesstimate. What amazes me is that not many do see it. |
| Posted by: twobyfour 2007-11-23 16:50 |
| #8 Dumbass, now is the time to buy, when value is low, in a few years when the dollar rebounds, you could easily be a millionaire. The best way is to take 1/2 your salary and buy dollars, do this each paycheck, store the actual dollars at home, wait. |
| Posted by: Redneck Jim 2007-11-23 15:42 |
| #7 P: Idgit shoulda gone to McD's. They exist in Prague. I'm sure the Big Mac Index hasn't collapsed. As of Nov 13, 2007: Not an agreeable surprise for fast food lovers, however quite an objective economic indicator. It results from the comparison made by Mf Dnes in the way set up by The Economist. The idea is to collect prices of Big Macs in different countries and use them as a base for estimation of exchange rates. Ten years ago, Big Mac cost 51 CZK, which at that time when one dollar cost 27,60 CZK was about 1,85 $. In the US the 200g burger cost 2,36. At the end of 2007, price of that mastodontic burger is 63 CZK. In the US it is, according to latest figures, 3,41 $, and as one dollar costs 18,30 CZK now, that makes 62,40 CZK apiece, less than in the Czech Republic. We have caught up with the US in the price, but salaries are a different thing. A new employee of the CR branch of Mac DonaldÂ’s earns 0,85 of Big Mac an hour, in the US it is for the same job 2,59 of the burger. In other words, prices are higher in Czechia than in New York, but wages are lower. Like I said, the European currencies are on the verge of a major collapse. It's just a matter of a few years, if that. |
| Posted by: Zhang Fei 2007-11-23 14:46 |
| #6 Procopius2k, that woulda been so obvious! I mean, he needed to beat the greenback dog, so had to find a proper schtick. |
| Posted by: twobyfour 2007-11-23 14:05 |
| #5 Idgit shoulda gone to McD's. They exist in Prague. I'm sure the Big Mac Index hasn't collapsed. |
| Posted by: Procopius2k 2007-11-23 13:28 |
| #4 it is about time the fed stopped policies that supported the world while our jobs vanished because it was too much to export-uncompetitive..... |
| Posted by: dan 2007-11-23 13:26 |
| #3 Ya, g(r)omgoru, DUH! |
| Posted by: twobyfour 2007-11-23 12:43 |
| #2 Maybe he should've ordered from the menu? |
| Posted by: g(r)omgoru 2007-11-23 08:05 |
| #1 The bill came to $21, fries included. So he got skimmmed. Big deal! |
| Posted by: twobyfour 2007-11-23 07:19 |