. Vite Vinifera De Vino's Blog: Eurolandia Is Getting Expensive

Saturday, September 22, 2007

Eurolandia Is Getting Expensive

Among the millions bad news about the world economics we have also to register the new Euro record over the dollar.
Now we need 1.41 Dollars to buy 1 Euro and considering that most of the non mass produced, higher quality foods and wines come from Europe you make the math on how much more expensive your life will be.
The decision of the Federal Reserve to cut by half a point the prime rate, not followed by the European counterpart, gave the Euro another, not needed, push.
A friend, an importer that works mainly with Europe, predicted the Euro at 1.55 within 9 months.
What that means translated in the everyday life?
If you had bought a bottle of wine for 10 Euro in 1999 you would had pay $ 11.8, same wine in January 2000 $ 10.089, in October of the same year (low record for the currency) $ 8.252 and up to January 2003 you would have paid from $ 8.3 to $ 9.5.
The funny thing is that for couple of years after the "September 11" the dollar hold up maintaing the rate under the $ 1, beginning in 2003 (strangely after the US won the war in Iraq) the green note started to sink and never stopped; in Jannuary 2003 that bottle would have cost you $ 10.5 in 2004 $ 12.75 in 2005 $ 13.4 in 2006 would had save some at $ 11.9 and $ 13 at the beginning of the current year.
Today the same exactly bottle will cost 14.049 dollars and if the prediction turns in reality a painful $ 15.5 bill will be presented to you!!!
I know for a fact that most of the European producer (except the big Chateaus in France that are the only ones able to rise prices because supported by the new money markets like Russia, India and China) in order to keep some sort of competitiveness in the US market have lowered their prices hoping in a stronger dollar, but that represent a palliative that is not a long term solution.
I hope that the unstoppable run of the Euro will soon end so to enjoy a good bottle of wine or a nice plate of pasta I don't have to take a bank loan.
Buona Bevuta a Tutti

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