These days, Europeans are starting to see the US as a quaint, slightly underdeveloped nation that serves as a great cheap vacation.

How far we've fallen.

Europe's always been pretty expensive to visit. We'll know it's really bad once Canadians start seeing us that way.

Europe disrespects our currency because they see Bush as a doofus.

europe disrespects our currency because it is less attractive given the direction of the country.

Canada too. A few years ago, the Canadian dollar was worth about 65 cents US. Now they are about even for the first time in decades.

Good to see that the Republicans are as good with fiscal policy as they are with defense. Imagine what would happen if those hippy libtard communist democrats ran things.

The problem is bigger than the Bush administration: the basic problem is that America consumes more than it produces (hence, a trade and current account deficit).

Not that reckless fiscal policies have exactly helped...

As thrilled as we are that the value of our dollar is no longer a national joke, it's actually sort of sucking for the Canadian economy. Funny how that works. I'm not going to pretend I understand it, because I don't, but it does suck that even when we're winning we still lose to the US.

well jaime the reason is that much of the trade and economy in canada is based on trade with the United States.

when the dollar becomes weaker (or the canadian dollar becomes stronger) it gets more expensive for the United States to do business with Canada (and cheaper for Canada to do business with the United States).

So while many decry the fall of the dollar (as if you could make a moral judgement on a currency valuation), it may help the United States in some sectors such as manufacturing (where the price of imports becomes more expensive), tourism, etc.

it may also hurt in others though.

Of course, a lot of the things that we import from Canada are things we wouldn't want to manufacture in the US because they're incredibly environmentally destructive (like the nickel we use in our new hybrid batteries).

It was always funny to me, kicking around in Europe, how strident Canadians were about not being mistaken for Americans. It's like people from Jersey having a hissy fit if someone mistakes them for New Yorkers.

i'm leaving next saturday for germany, paris, and holland.

i'm scared.

hold me.

@7 It's hurting your economy because you're our largest trading partner, and when your stuff becomes more expensive, we can't buy as much. Your best hope is to infiltrate our country and disappear the entire GOP.

Yeah, last time my friends and I were in Vancouver, a roving gang of Canadians spotted us and yelled "hey those Yanks are trying to enjoy our liberalism, marriage equality, social safety net, cultural pluralism and universal healthcare system for free - LET'S GET 'EM, EH!"

How aboat that??

Thank you, all! That makes total sense. You're even making less movies here, which is quite sad, because frankly it's quite exciting to see Brad Pitt strolling around Toronto or, more often, Calgary.

And @9, strident, really? Well, maybe. But it isn't an ego thing/hissy fit at all. We're careful to let all in Europe know not to mistake us with Americans because they treat Canadians far, far better. They love us! And it isn't just Europe, either. The little Canadian flag on your bag will do wonders in Asia, as well, Japan in particular.

it's a good thing that americans are too damn prideful to put a canadian flag on their bag and use an ontario/manitobaish accent

BA @14: Not this American. I've been practicing my Canadian accent for a trip to Europe.

but how will they know that the ole red white and blue kicks ass and will mess them up if they want to talk smack.

i think americans need to wear evil knieval type jump suits on all trips overseas.

Want to read up on super-smart people's view of the effect of the dollar sinking even more? Check out calculatedrisk.blogspot.com (Hint: it's inflation in the U.S., and decreased consumer spending, which equals a domestic recession plus great risk of global recession since we're the suckers who keep buying everyone else's products, which makes our economy pretty vulnerable to external shock, i.e., what if the housing implosion and credit crunch keep getting worse too). Shivery stuff, discussed sanely by people who seem to have no agenda other than not buying into economic bullshit.

I just recently spent my summer vacation up in Canada, actually. And yesterday I was reading my print copy of the Wall Street Journal and realizing that I probably won't be traveling to my favorite country to visit, France, any time soon.

Good thing I have two passports.

europe has:
health care companies don't have to pay for

transit investments that work ie a US$3.5B 21 mile tunnel thru Switzerland
and 4 or 5 types of rail everywhere

an expnding market, as they recently joined in with Eastern European countires, Portugal, Spain, Greece.....anyone can work anywhere and the great scale allows increasing returns

no trillion dollar borrowing spree to pay for an economic disaster we call Iraq.

Largely free college education

they are investing to obtain increasing returns whlie what are we doing? Sending a $5 million 'copter to chase an Iraqi dude on a bike (T. Friedman NYT today)

I love that blog!

the favorite post is the NAR forecasts. NAR is the biggest association of snake oil salesmen in the current economy.

you don't have to lie & say you're canadian - just say you're from Seattle.

euorpeans love Seattle.

and they know we're not knuckle-dragging nascar fans.

Do we still actually make anything to export besides movies and music?

@19

Yes, they also have no defense budget to speak of. The same is essentially true of Canada. The United States, on the other hand, spends as much on defense as the entire rest of the world combined. Essentially, these EU-style countries have been able to remove defense spending from their budgets by virtue of being members of NATO. The significance of this can be observed in the conspicuous absence of EU spending to maintain military parity with Russia, which shows every sign of becoming a military kleptocracy that would, under other circumstances, represent a significant threat to EU border security.

They don't have those services because they're morally or economically superior; they can afford them because they're toadies to the biggest bully on the block. If and when our economy collapses in such a way as to force us to reduce our defense spending, I think you may see the spending priorities in Europe change pretty quickly.

Canada, of course, will always be protected, just by virtue of where it is, and will no doubt continue to be smug about its spending priorities.

We can at least take solace in the fact that VP Cheney's doing fine in all of this: http://www.informationclearinghouse.info/article13851.htm

I live and work in London right now and New York City is my next cheap holiday destination. I'm absolutely delighted by your currency falling. Please keep up the shoddy economic work! :)

One handy thing while travelling is to learn the local equivalent of "Bush bad, Clinton good". No, really, it makes a surprising difference.

Seeing how most Americans live off their credit cards, staying home and working themselves out of debt is a smarter solution than, say, traveling to Europe and spending racking up credit card debt.

Paris, hell. You can forget London as well. A pizza in London - a run-of-the-mill-storefront pizza - is around $60. A turkey sandwich from a grocery deli approaches the $8 price, and a single room in a modest, near-flea bag hotel in central London is nearly $300 a night.

Canada is getting expensive, too, but our sense of price-iness - those of us who visit regularly - is forged because we got used - very used - to a cheap Canadian dollar. Historically, say before 1990, the Canadian dollar was nearly at par with the US dollar (about 90-95 cents). I remember visiting Montreal in 1982 and I was horrified at the price of a cocktail, for instance. So this isn't new. It's more revival.

The good news, if there is any, is that the US and Canada are so linked economically (and even culturally, really, though some Canadians would be loathed to admit it) that we need each other; it's familial. So, visitors who seek an affordable hotel room in Vancouver will almost assuredly find one because Vancouver needs our tourism just as Washington's border counties need BC shopping dollars. As tourism slows in BC, there'll be special deals and rates, etc. I don't think the $99/night room is dead, but you can probably kiss the $69/night room good-bye.

The well-worn cities of western Europe are a different matter. There's no market necessity for offering any kind of discount to American tourist while they still have tourists from all over the globe visiting. And even if they did give you a deal, who could afford restaurants and attractions except those who can afford anything regardless of price?

So Dan, yeah. Europe's out for a while until this country gets its fiscal house in order: get the fuck out of Iraq, reduce the deficit primarily by getting rid of some of our international debt, and raising interest rates (which won't make the real estate or mortgage sectors very happy).

But don't get me started on the wisdom of encouraging a family making $60K into the notion that they can afford an $800,000 house.

I'm into it. This place has been crawling with foxy Europeans lately. American cities that benefit as much from tourism as SF does definitely benefit from a weak dollar.

@23 - that's the POINT.

They're not stupid enough to invade countries and instead invest the money in alternative energy sources and transit and transportation that is more efficient.

Just like Japan.

And you wonder why we're a third world nation here in the US.

@30: That's part of it. But they can also afford to spend less money on defense because they know we'll ride to their rescue if someone tries to invade *them*. They essentially coast on the big U.S. defense budget, getting the benefits while we pay the bills.

will, it would be a bit of hyperbole to say that the united states is a third world nation.

But just a tiny bit, Bellevue Ave.

@31

Will, you totally missed the point of my comment. As Orv said, all the other NATO countries have the luxury of suspending defense spending precisely because they have a treaty partnership with the United States. Their low level of defense spending would probably not be practicable if they didn't have a treaty relationship with us. And Japan has that going for them as well. Part of the reason they were able to demilitarize was because of US assurances that we would keep countries like North Korea from attacking them.

#15 - Let's go oat for a beer, eh?

In other good news, at least it looks like the debt limit for the country is set to go up again:

http://tinyurl.com/2z5qdu

...as gold breaks through $700 again.

What could possibly go wrong?

The dollar will continute to drop until the trade deficit goes back to at least under 2% of GDP. It is runing at a rate of 6% of GDP now. In reality no country should run a trade deficit of more than 1% of GDP for an extended period of time.
Ideally the US should move to get the trade deficit well under 1% of GDP.
I suspect this will happen over the next 2 decades...