“Dinar must remain stable”

A low dinar hurts those who borrowed in euros, but it helps exporters. The world's main complaint against China is that it keeps its currency artificially low, giving its exporters an built-in advantage. It was only after the ruble plunged in 1989 that the Russian economy began to pick up and their exports suddenly began to look cheap to the rest of the world. And a low dollar today is helping the U.S. economy - imports are more expensive, so people don't buy as much from abroad, and exports are cheaper - both help with the trade gap. Investments are also more likely when the currency makes everything seem to be on sale.

Amer,

You are right with your assessment of prices in the US. Services expensive, almost everything else is much cheaper than in Europe ..including food.
Relatives of a French colleague of mine just returned in France after having loaded up with everything in the US (a nice pair of shoes as an exampe bought here for $90 costs 180 euros in France, calculated in dollars 270).
Vitamines, special food extracts I just sent to relatives in Hungary cost three times as much in Germany and Hungary. There is a huge shopping center near my place with factory outlets. Special busses with foreigners come directly from the airport. They shop or better - load up - than go back to the airport to fly home. Recently I was in a store for "Timberland" shoes. It was full of Scandinavians, Germans, Brasilians. Some of them bought 8 pairs. If Europe would be only 100-200 km away most European stores would go bankrupt.
As for services...car repair, plumbing repair, any type of repair it is a horror story..so expensive. If a lawnmover breaks down the repair can cost easily 50% of a new one. There was this joke in Florida about a plomber called to fix a spinkler on a week end. When the homeowner heard the amount to be payed he said "you are more expensive than a doctor". The plomber replied "yes I know I used to be a doctor".

It was that way even under communism - goods were cheaper in the US (except for books), services much higher. (Shows you which system was labor-friendly.)

One source of income for new economies is now offering medical services, esp. surgery, to Americans who are priced out of their own system. As long as American doctors expect to become millionaires, there's no way we're going to get healthcare costs in line.

Maybe this is because we don't have VAT in the U.S.? Europeans pay higher taxes and have better services, including healthcare. There may be a VAT in America's future - we're going to have to find some way of paying for all the money we're putting into wars and using to deal with the crisis.

And then where will all those tourists go to buy shoes?
(Amer, 13 December 2009 01:28)

Amer,

On many items the VAT is about the same as the sales tax. For instance, in Serbia the VAT on computer products is 8% - less, than in California.

Still, the prices are higher because the market is tiny compared with US.

Europe does not have the true common market of goods yet because more often than not the merchants won't send to an other EU country - or if yes, the protective domestic post tariff will spoil the price advantage. It's a semi-working system. On the other hand the American system has many decades to work things out to a perfection. USA as common market does function, EU does not (yet).

And with a large common market the prices do fall.

And a low dollar today is helping the U.S. economy - imports are more expensive, so people don't buy as much from abroad, and exports are cheaper - both help with the trade gap. Investments are also more likely when the currency makes everything seem to be on sale.
(Amer, 12 December 2009 15:57)

The Serbian Dinar is fairly close to Eur, so is Hungarian Forint, unfortunately. Both are IMO way to overvalued, in particular the groceries in the States are usually straight cheaper than in Serbia or Hungary. What is (much) more expensive in the States is the service: i.e. you just can't repair a camera or a TV in the States - you better buy a new one. Repairing a car - even a US model - is a bargain here. Same about dental work.

So it's not a good place to buy food, but good place to fix your banged teeth and your banged Accura. Plus almost free university for the kids.

'Special busses with foreigners come directly from the airport. They shop or better - load up - than go back to the airport to fly home.'

Maybe this is because we don't have VAT in the U.S.? Europeans pay higher taxes and have better services, including healthcare. There may be a VAT in America's future - we're going to have to find some way of paying for all the money we're putting into wars and using to deal with the crisis.

And then where will all those tourists go to buy shoes?

'And with a large common market the prices do fall.
(Ataman, 13 December 2009 16:32) '

It's easier to sell into a large market - only one set of regulations to deal with, a single currency, a unified transport system ...

That's one reason why the U.S. especially had no interest in breaking up Yugoslavia into a bunch of tiny countries: it just makes doing business there so much less convenient (= less profitable).

A low dinar hurts those who borrowed in euros, but it helps exporters. The world's main complaint against China is that it keeps its currency artificially low, giving its exporters an built-in advantage. It was only after the ruble plunged in 1989 that the Russian economy began to pick up and their exports suddenly began to look cheap to the rest of the world. And a low dollar today is helping the U.S. economy - imports are more expensive, so people don't buy as much from abroad, and exports are cheaper - both help with the trade gap. Investments are also more likely when the currency makes everything seem to be on sale.

And a low dollar today is helping the U.S. economy - imports are more expensive, so people don't buy as much from abroad, and exports are cheaper - both help with the trade gap. Investments are also more likely when the currency makes everything seem to be on sale.
(Amer, 12 December 2009 15:57)

The Serbian Dinar is fairly close to Eur, so is Hungarian Forint, unfortunately. Both are IMO way to overvalued, in particular the groceries in the States are usually straight cheaper than in Serbia or Hungary. What is (much) more expensive in the States is the service: i.e. you just can't repair a camera or a TV in the States - you better buy a new one. Repairing a car - even a US model - is a bargain here. Same about dental work.

So it's not a good place to buy food, but good place to fix your banged teeth and your banged Accura. Plus almost free university for the kids.

Amer,

You are right with your assessment of prices in the US. Services expensive, almost everything else is much cheaper than in Europe ..including food.
Relatives of a French colleague of mine just returned in France after having loaded up with everything in the US (a nice pair of shoes as an exampe bought here for $90 costs 180 euros in France, calculated in dollars 270).
Vitamines, special food extracts I just sent to relatives in Hungary cost three times as much in Germany and Hungary. There is a huge shopping center near my place with factory outlets. Special busses with foreigners come directly from the airport. They shop or better - load up - than go back to the airport to fly home. Recently I was in a store for "Timberland" shoes. It was full of Scandinavians, Germans, Brasilians. Some of them bought 8 pairs. If Europe would be only 100-200 km away most European stores would go bankrupt.
As for services...car repair, plumbing repair, any type of repair it is a horror story..so expensive. If a lawnmover breaks down the repair can cost easily 50% of a new one. There was this joke in Florida about a plomber called to fix a spinkler on a week end. When the homeowner heard the amount to be payed he said "you are more expensive than a doctor". The plomber replied "yes I know I used to be a doctor".

It was that way even under communism - goods were cheaper in the US (except for books), services much higher. (Shows you which system was labor-friendly.)

One source of income for new economies is now offering medical services, esp. surgery, to Americans who are priced out of their own system. As long as American doctors expect to become millionaires, there's no way we're going to get healthcare costs in line.

'Special busses with foreigners come directly from the airport. They shop or better - load up - than go back to the airport to fly home.'

Maybe this is because we don't have VAT in the U.S.? Europeans pay higher taxes and have better services, including healthcare. There may be a VAT in America's future - we're going to have to find some way of paying for all the money we're putting into wars and using to deal with the crisis.

And then where will all those tourists go to buy shoes?

Maybe this is because we don't have VAT in the U.S.? Europeans pay higher taxes and have better services, including healthcare. There may be a VAT in America's future - we're going to have to find some way of paying for all the money we're putting into wars and using to deal with the crisis.

And then where will all those tourists go to buy shoes?
(Amer, 13 December 2009 01:28)

Amer,

On many items the VAT is about the same as the sales tax. For instance, in Serbia the VAT on computer products is 8% - less, than in California.

Still, the prices are higher because the market is tiny compared with US.

Europe does not have the true common market of goods yet because more often than not the merchants won't send to an other EU country - or if yes, the protective domestic post tariff will spoil the price advantage. It's a semi-working system. On the other hand the American system has many decades to work things out to a perfection. USA as common market does function, EU does not (yet).

And with a large common market the prices do fall.

'And with a large common market the prices do fall.
(Ataman, 13 December 2009 16:32) '

It's easier to sell into a large market - only one set of regulations to deal with, a single currency, a unified transport system ...

That's one reason why the U.S. especially had no interest in breaking up Yugoslavia into a bunch of tiny countries: it just makes doing business there so much less convenient (= less profitable).