India Tourist Sites No Longer Accept U.S. Dollar!
Who would have thought that the dollar of the United States of America would not be welcome at the Taj Mahal? The government of India has stopped the practice of taking US dollars for admission at 120 historical sites as the currency’s downward spiral was costing big money. (Taj Mahal US Dollar story here)
This follows several high-profile stories of other businesses discontinuing their US currency rates. Even the world’s richest super model, Gisele Bündchen, now writes her deals in Euros. (BBC story here)
As our friend Amit at Pull! Push! blog always says “I am not an economist”, but the continued weakness in the US dollar will probably impact our little island in ways we can’t yet imagine.
In my opinion, the United States is still a strong country economically, but the war in Iraq is sucking their lifeblood not only in direct cost, but in diverting national energy and attention away from the home fires – not to mention that the US dollar has been under strategic attack for some time by China and other hostile nations.
Where will it end? How will it impact Barbados and my family?
I don’t know… but I do know that their are still many Kingfish in the sea and our night tree expeditions are always rewarded! As long as the family works hard and prays daily, we will never have too much on the table, but we will always have enough.
29 Comments
November 19, 2007 at 4:28 pm
Robert comments on Marcus’ article…
You forgot one thing Marcus. You will be fine so long as you work hard, pray AND those nasty charter boys out of Bridgetown don’t steal your fish as they always do.
There should be a law that your tree is YOUR tree.
November 19, 2007 at 5:11 pm
There are many countries around the world who have the power, individually or jointly, to severely damage the US currency.
Should any such run on the dollar occur it will naturally impact on our our own dollar in equal measure, tied as we are.
It is not in China’s, the KSA’s or any creditor nation’s financial interests to force further rapid devaluations on the US, they hold far too much paper to destroy its value.
However we have petrodollar holding nations whose political or religious aspirations may overcome any such restraint….e.g. Venezuela or Iran.
They would love the opportunity to embarrass ” The Great Satan “.
Our fixed dollar could then be at risk from a political act quite beyond our control.
It baffles me how the BLP are continuously berating Thompy for subjecting us to the IMF edicts of 16 years ago, but the current Finance Minister has presided over a de facto devaluation this last year just as drastic as any outside body would have demanded of an economy as healthy as our Central Bank describes this one.
We do not hear one peep of protest.
Many countries around the world are gradually withdrawing from the dollar into Euro, Yuan, or a basket of other currencies.
The “unfortunate” incident of the microphones being “inadvertently” left on whilst the OPEC ministers discussed abandoning the petrodollar was a further shot across the bows of the Federal Reserve, who along with the World Bank and IMF
need to administer a large dose of the same unpleasant medicine they have enjoyed prescribing for lesser “sick” nations for years past.
Unless the US begin seriously stringent financial reforms they risk causing a global financial meltdown with their suspect derivatives and unsupported dollar bills Barbados should re-examine our own peg.
November 19, 2007 at 6:35 pm
Nah! whuh…nuhbody en dead.
It tek somebody to DEAD b4 anyting get done around here.
u keep waiting on a difrnt peg – gudluck
November 19, 2007 at 9:49 pm
Owen and Bush have a lot in common
lots of debt and a devalued currency
Who will pay?
not Owen, not Bush
November 19, 2007 at 10:23 pm
This is no joke!
The US dollar has plunged against the Euro and other currencies.
Americans are being told that it is good for the economy and will boost exports! This may be true as, despite the recent drops, the American economy is flourishing!
November 19, 2007 at 10:54 pm
iisnoone:
Please give us here, and the wider world, evidence of a flourishing US economy.
I would love to think we are shackled to an appreciating currency.
November 19, 2007 at 10:57 pm
Psychologists call it the “halo effect” when one attribute, desirable or not so, causes the observer to form opinions about other unrelated attributes in a similar fashion. You might not agree with China’s internal politics or treatment of the Chinese people, but the fact is that they have bought a VERY large amount of US dollars to keep a near constant exchange rate for their yuan. That action can hardly be considered threatening. Just wait until they decide NOT to buy more and watch what happens to the US dollar relative to all other currencies in the world that have not chosen to hitch their wagon to the US dollar.
November 19, 2007 at 10:57 pm
iisnoone;
On second reading is your post rhetorical?
If so I apologise for my slowness of understanding but speed of response.
November 20, 2007 at 3:49 am
Almost the entire western system of economics is built upon a myth called interest. This mythical system of financial management has to implode and is only rejuvenated when the western nations return to the true base of their economic system, which is and has always been, the theft of the natural resources and minerals of other countries and the exploitation of labour. This is sometimes undertaken by way naked aggression as with Iraq and sometimes through subterfuge as with many of the conflicts in Africa.
The widespread availability of credit has been used as an economic form of slavery for the weak willed and has blinded the strong willed to spend the best part of their lives working to pay the interest payments for their cars, homes and short term symbols of success.
The greed of companies and share holders to always desire more and higher profits each year, while laying off workers and employing labour saving technology, has helped create a pool of people that have access to credit and little means to manage the payments adequately.
Capitalism is it’s own worse enemy.
Peace
November 20, 2007 at 4:48 am
Maat wrote:
“The widespread availability of credit has been used as an economic form of slavery for the weak willed and has blinded the strong willed to spend the best part of their lives working to pay the interest payments for their cars, homes and short term symbols of success.”
Watch the video documentary “Money as Debt” available from http://www.moneyasdebt.net or for free at Google video. (Just do a Google search on “Money as Debt” and click on the topmost link.) The 47 minute documentary explains how in fractional reserve/debt based monetary systems, most of the money that exists in the economy is created and put into circulation through the issuance of loans by commercial banks and financial institutions. Unfortunately the drawback to this debt based method of money creation is that the money thus created by the banks at any one instant is never enough to pay off the initial loans plus the interest charges incurred. To ensure a reasonable amount of the loans and the interest gets paid back by the borrowers requires more money gets put into circulation than was created by the issuance of the initial loans. And how do you get more money into circulation? It’s very simple really, you just encourage more debt. If you have ever watched Rover or Spot frantically chasing his tail round and round in a circle you should get the picture.
A few relevant quotes used in “Money as Debt:”
November 20, 2007 at 10:12 am
Maat: Capitalism is it’s own worse enemy.
———-
Maybe so, but the alternatives have been found through experience to be much worse at improving the overall human well-being.
November 20, 2007 at 10:51 am
Neither am I an accountant, but I think that the doomsayers have it all wrong. The reduction in value of the US dollar against other currencies is in fact a blessing for Barbados. Let us examine the most likely effects objectively (and this is not an exhaustive list since I am not an accountant and I only just got out of bed).
1. We can source most anything we want to import from the US, ergo no increase in cost. Those things we import from other countries, we substitute as far as possible with product from the US.
2. It makes product exported by Barbados more competitive on the world market, (except in the US, of course,) and our manufacturing industries will benefit.
3. Best of all, tourists from our traditional high volume partners, the UK and Canada can go spend crazy in their favourite vacation spot and still have money in their pockets. If we have enough sense to capitalize on this bonus, our tourism industry will be smiling all the way to the bank, and the Central Bank will be awash with foreign currency (other than US, of course).
4. Those German and Japanese automobiles that we love so much, have become suddenly more expensive, which should (I hope) result in a reduction in their import and assist in our traffic congestion problem and boost foreign reserves. When OPEC switches from US to the Euro, the price of oil will become prohibitive and we won’t be able to afford to drive our gas guzzlers anyway. Think of the benefits to the environment.
5. Pride notwithstanding, we all knew deep down that the Barbados dollar was over valued, but couldn’t stomach the stigma of devaluing, or being forced to devalue. Here we have a de facto devaluation, which for the aforementioned reasons is good for the country, while at the same time saving face, a most important feature of any devaluation. The government can rejoice in its beneficial effects while avoiding any stricture for the negative. The only thing better than a 6% cess is a 20% devaluation which you can’t be blamed for. Not a bad solution to some pesky problems at all.
I am sure I have left out some stuff, but someone will surely be more insightful.
November 20, 2007 at 1:24 pm
We can source most anything we want to import from the US, ergo no increase in cost
But since a high proportion of the US industrial base has been shipped overseas to Mexico and Asia in the last 2o years, we by necessity either have to source more products from countries other than the US or, if we import anything from the US, the product (or components of the product, e.g. computers and electronics) will likely have originated outside the US anyway, and thus the price will still be negatively affected by the declining US dollar.
In the 1940’s and 50’s and into the 60’s the US was the Saudi Arabia of its day and was a net oil exporter to the rest of the world. (Most of the oil that the Allied forces used to win WWII came from the USA.) After US oil production peaked and started its decline in the early 70’s, the US has to had to import increasing amounts of its daily oil requirements. Today it imports 60% of the oil it uses (And this figure is projected to rise over the next 20 years to 70% of requirements.) As the US has to keep importing more and more of its oil, the steadily increasing rise in oil prices once world oil production approaches and hits its one time peak (aka Peak Oil) plus a declining dollar will have a very noticeable impact on prices of all goods (and especially food) produced in the USA as well.
November 20, 2007 at 2:17 pm
Good point there, GM, but you would have to agree the overall pros outweigh the cons?
Another con I might mention is that with all the GM foods now being produced in the US, (Genetic Modification as opposed to Green Monkeying around), there is the inherent risk in importing more of their food, that we may eventually end up, both male and female, with body modifications we weren’t meant to have.
November 20, 2007 at 2:58 pm
Inkwell…I concur and when we take into account the Toys from China scandal with Xmas around the corner, I wonder what will be the consumers behaviour.
Is it remotely possible that there is a new cold war? This one on China’s trade? Raise doubt in the mind of the consumers over the quality/safety of the Chinese products and a collapse occurs?
Food for thought!
November 20, 2007 at 6:57 pm
Was Saddam unmentionable crime, and the real reason he had to be overthrown with such haste, his statement of intent in September 2000 to sell Iraq’s oil in euros rather than Uncle Sam’s greenbacks? (After the invasion, Iraq’s oil which was being sold in euros under Saddam was once again sold in dollars.)
Above article is in pdf format so you will need the Adobe Acrobat reader program installed to view it. The author, William Clark, is also author of the book Petrodollar Warfare: Oil, Iraq and the Future of the Dollar. More about the book here: http://petrodollarwarfare.com
November 21, 2007 at 8:04 am
Inkwell, excellent article and correct.
The value of our dollar tied to the US is the least of our concerns, certainly it can have benefits for Canadian tourists, UK tourists and indeed for the US itself in selling its own exports.
Further, I still believe that pegging to our largest trading partner is the only reasonable course of action.
The ‘real’ problems exist as follows:
- any debt obligations in another currency become instantly more difficult to repay i.e. Euros, pound, yuan etc. Which is why I warned early this year on this blog, or even as far back as late last year, that this Government was and is borrowing too much for our own economy to bear.
- the current US situation is spreading, so much so that the Bank of England Governnor this week noted a slowdown in the UK, no doubt triggered by the US situation. A worldwide economic slowdown will impact us severely and the benefits that might have accrued due to the weaker US and thus Barbadian dollar will not crystallise if or when other economies also turn to slowdown or recession. The citizens of those countries will also have reduced spending money.
In my opinion, this is probably going to be a protracted spell of slowdown, particularly as there is no end in sight to either the US /far East crisis nor to the oil situation.
As I have noted before, buckle your belts, we are in for a rough ride.
I note the reference to the next President needs to be enlightened. True, may I note that Bill Clinton left the US at Peace with the world, left the economy in excellent shape and now everything is in tatters, to the extent that the Cold War has returned, which it has in case any of you were wondering.
This indicates the extent to which National and International policy matters for any nation.
Peace.
November 21, 2007 at 9:57 am
PS. My question to you is, the current international and economic mess which now exists:
was it by accident, or…..design???
My second question is, who has benefited from this situation?
November 21, 2007 at 10:04 am
Rumple:
A1. By design
A2. International Financiers
November 21, 2007 at 10:38 am
My read is that the existing mess is the unintended fallout from the US administration’s machinations to secure and augment its oil supply, leading to the disastrous attack on Iraq.
US arrogance led it to badly misread the politics of the middle east and the administration now finds it has an angry tiger by the tail. (By the way, I feel that Iran, which is clearly the next target on the neocons’ list and for the same reasons, never mind all the hype about nuclear weapons, has every right to protect its geopolitical interest in the middle east and to oppose US hegemony, even to the point of assisting those resisting the unjustified attack and occupation). That Al Quaida has used the situation to advance its own agenda is coincidental, but the US has been quick to use Al Quaida’s involvement and the “war on terror” to belatedly justify what is in fact an oil war.
The only entity that appears to be benefitting from the mess is Al Quaida, which is being seen in some quarters in the Middle East as a bulwark against US imperialism and its support for Israel.
The US cried wolf (Al Quaida) in support of its original attack on Iraq when there was no wolf. They wanted a wolf, they got a wolf
November 21, 2007 at 10:59 am
Inkwell:
I agree that the Iraq invasion was only part of the policy of securing oil supplies throughout the Middle East and the Caucusus.
But, even though you believe the unfolding quagmire has happened by bad strategy or “accident” as Rump asks, I think you should follow the money to arrive at a more definite answer than the nebulous construction that is Al Queda.
For a start research the Carlyle Group, and the business connections of the Bush and Bin Laden families.
The most powerful democracy on earth has been hobbled by the campaign contributions any aspiring politician needs to secure to hold any chance of election or re-election.
So Capitol Hill and thus government policy is virtually controlled by this small band of large
benefactors.
Ask who benefits?
November 21, 2007 at 11:53 am
ST
“Unintended fallout” does not exactly mean “by accident”
We are not in disagreement at all re the Carlyle Group, Haliburton et al who are profiting enormously from the Iraq war and the war on terror in general. What you are really saying is that the entire scenario was a ..dare I use the word “conspiracy”? How great a leap is it to imagine that the conspiracy extended all the way back to 9/11? Another can of worms.
November 21, 2007 at 3:44 pm
I apologise for not responding, Inkwell.
My reply seems to have been censored by the BFP.
****************
BFP Comments
Hi Straight Talk
We didn’t “censor” anything. Your reply might have been auto-moderated but everything you have posted today appears. Is there something still missing?
Robert
November 21, 2007 at 4:42 pm
Devaluing the Bajan dollar would be the Logical thing to do!
It would definitely stimulate the economy and suffice to increase in tourism
http://mrslindaterrel.tripod.com/fun
November 21, 2007 at 7:02 pm
While coming out of SVG recently I was told by the immigration officer that they were no longer accepting $BDs when paying the departure tax. They however continue to take USA dollars and Canadian dollars. My point to them was that the Bds dollar was tied to the USD dollar and that if the USA dollar sinks so does the Bds dollar. There was therefore no reason why they should accept the USD Dollar and not the bajan dollar.
What on earth is happening to all this talke about cmse?
November 21, 2007 at 9:52 pm
Thanks for that, Robert.
The post just disappeared into the ether.
No “Your comment is awaiting moderation”.
BTW with your enthusiasm for things aeronautical, what credence do you give to the failure to reset the altimeter of American 77 shown in the black box video re-enactment @
http://video.google.com/videoplay?docid=-44862351366604505 ?
November 22, 2007 at 4:18 am
Many nations in Europe are also going through some trying economic times. It suits these countries to blame their predicament on war, oil shortages and anything other than what it is. In my opinion the capitalist system is far from perfect because of the motive of profit achieved through interest/debt.
The French Finance Minister was recently quoted as declaring that France is broke. The new Prime minister of this huge nation is at the same time making threatening statements regarding Iran and may become one of the USA’s main allies in any proposed military operation in that country.
Self sufficiency is one of the few ways to survive the times of economic hardship that are on our horizon. Owen Arthur knows what he is talking about when he says that we should all try to grow some of what we eat.
Peace
November 22, 2007 at 10:52 am
Hi Straight Talk
Your disappearing post is as puzzling as the anomalies in the NTSB report and as in that case, I doubt you will get any answers. Though some may choose to ignore the message, the facts are speaking loudly. They are leading someplace some don’t want us to go.
November 22, 2007 at 11:36 am
”Owen Arthur knows what he is talking about when he says that we should all try to grow some of what we eat”
So why wait until now to profess this? What exactly have Government done to improve productivity in the agricultural sector, including tax incentives, duty free concessions on equipment, Government grants for farm plant and initial set up?
What is Government doing to work on mutual production and trade agreements with Guyana, the potential bread basket of the Caribbean? What is Government doing to increase joint ventures between Guyanese businessmen and Barbadian?
Yes, Government is a leader, a provider of suitable operating conditions for business to flourish.
Why now, what has been done for the past 14 years?
Hindsight is fine, but leadership is about foresight.