You Have to Order a Bunch of Crap From Europe and Japan
America had a tough 2022, but the dollar is having a good year. For the first time since 2002, the US currency is at par with the euro, which means that one dollar is trading for about one euro. This represents a significant drop in the value of the European currency, which was worth about $1.47 in 2008 and about $1.14 earlier this year. And it’s not just the euro – the dollar is significantly higher against a long list of currencies, including up 19 percent against the Japanese yen . This means that now is a good time to travel abroad , where your dollar will literally blow you away. But it’s also a good time to import a bunch of crap at a discount.
Why is the dollar so strong now?
The reasons for the collapse of the euro are varied and obvious. War in Ukraine, an ongoing severe energy crisis, global inflationary pressures and a slow-moving European Central Bank: put it all together and you have a recipe for devaluation. The same factors are to blame for the rapid fall of the yen . At the same time, the dollar is raging. The Federal Reserve raised interest rates, which made investing in US Treasury bonds more attractive. And despite our own economic turmoil, US economic performance remains strong in many respects.
What does this mean for you? Your money is worth more in 19 euro countries than at any time in the past 20 years. Today in Japan it costs 19% more than in January. Basically, buying in dollars is like an automatic discount on everything you buy (or order) in Europe or Japan. Something that costs 15 Euros not so long ago would have cost you around $18, but today it will only cost you $15. So how can you take advantage of this historic (and likely transient) situation?
Everything from Europe and Japan is on sale – for now
Basically, there are two ways to capitalize on this situation: travel and buy things.
Travel. Traveling to Europe suddenly becomes significantly cheaper if you pay in dollars, and this is the most direct way to take advantage of the strong US currency. If you were planning a holiday in Europe a few months ago, that money will now go much further than you thought, and you will probably be able to add a lot of upgrades and extras that you could not afford before. Traveling to Japan has always been expensive, but now it’s…cheaper.
The great thing about this “discount” is that it’s an overall effect that applies to literally every penny you spend. Every incidental expense—every snack, bottle of water, upgrade, restaurant meal, or guided tour—that you buy while traveling in Europe will automatically be 15 percent cheaper, give or take.
Purchase. If you’re planning to travel to Europe or Japan soon (thankfully!), make extra purchases while you’re there to take advantage of the situation. Buying clothes or tech devices can be cheaper in the short term, depending on the item (and assuming you don’t have to pay extra for shipping home). Stocking up on cosmetics, yarn, fabrics or other merchandise as you travel through gorgeous European cities is the most economical way to make your hefty dollars really valuable.
If you’re not in the mood to jump on a plane, you can still capitalize on the strength of the dollar by buying a storm – anything imported from Europe or Japan will be cheaper in real terms, including cars, computers and devices, clothing, and luxury brands.
Of course, since shipping and handling costs will still be a factor, you’ll have to do the math to make sure they don’t wipe out any purported discounts. That’s why it’s a particularly good time to import things you can’t easily buy in the US, from trendy European food to anime merchandise from Tokyo.
This situation won’t last forever, so if you have the time, energy, and funds to take advantage of a strong dollar and faltering foreign exchange, don’t oversleep ordering this giant Totoro.