According to an NPR story this week, the Federal Reserve is sitting on a billion dollars worth of the $1 Sacagawean and Presidential coins, and the program to replace dollar bills with the metal coins has largely been deemed a failure. The government spends millions annually to mint new coins in order to introduce all the US presidents, resulting in millions languishing in vaults a la “Scrooge McDuck” said Planet Money’s David Kestenbaum. Despite the fact that they are legal tender and the government’s many efforts to promote their use, Americans still distrust the dollar coin.
Why the reason for the distrust? Americans claim they are difficult to spend, not recognized by many merchants, or just weigh down pockets too much. Perhaps we should ask our foreign neighbors how they have integrated them into daily life. America is one of the few countries in the developed world to use a $1 banknote and the only one of the top five traded currencies (including the Euro, British Pound, Japanese Yen, and Australian dollars) to use a bill in such a small denomination. Canada replaced the dollar bill with the “loonie” coin in 1987 and the British pound note has been out of circulation since 1983. Is taking away the $1 bill the only way to get Americans to use the coin? We reported earlier this year on a possible way to earn frequent flyer miles by purchasing dollar coins, a legal (but not encouraged by the US Mint) practice that may actually contribute to this back log of currency. Maybe go out and spend the coins instead and hope the trend catches on.
Photo courtesy Flickr user cometstarmoon. Hat tip to Honza Kerver for the NPR story link.
If you’re having trouble staying awake or just like to party, book your next flight on South African Airways. The UK Border Agency arrested 15 SAA crew members – nine men and six women – at Heathrow Airport. Why are they now guests of the Queen? This crew was caught trying to slip 11 lbs of cocaine into the country.
The episode is just another example of poor timing. The drugs are estimated to have a street value of ???250,000. If nose candy is pegged to the U.S. dollar, it would have been worth almost twice as much six months ago.
Last month, another 15 SAA crew members were busted at Heathrow for hauling cocaine and cannabis into England. They were a bit more ambitious, with a haul with an estimated value of ???310,000. The outcome, however, was the same. BBC News calls it a separate incident, but it smells like a pattern to me … and my nasal passages are clean.
The most recent perps were given bail and instructed to return to court on March 23. The only question that remains is how much more cocaine they’ll have to “import” to cover their legal fees.
[Via BBC News]
Only these women have caused more problems than SAA’s pilots!
There’s been a lot of talk about the poor dollar to euro exchange rate, but it might not be the European currency that travelers should be concerned about. In fact, in terms of economic gains against global currencies, it looks like the Israeli shekel is currently the world’s strongest currency.
Since the beginning of 2008, the shekel has made significant gains against most of the world’s major currencies; 15% against the U.S. dollar, as well as just a little more against the British pound and the Canadian dollar, 8% against the Swedish kroner and 24% against the South African rand. And against the euro? The shekel has strengthened by 9% against the European currency. But even with a strong currency, Israel still hopes to attracts flocks of tourists, 2.8 million this year alone.
The dollar might be low, but if you make your way to Venice you can count on a discount from Harry’s Bar, the renowned Venetian watering hole said to be the birthplace of the Bellini and Carpaccio, and where Ernest Hemingway himself downed martinis. Offering a discount to “poor” Americans who are suffering from the weak dollar is representative of a growing concern across Europe that a decrease in US tourists will have an effect on the tourism industry.
At the entrance of Harry’s Bar you now find a sign that says, “Harry’s Bar of Venice, in an effort to make the American victims of subprime loans happier, has decided to give them a special 20 percent discount on all items of the menu during the short term of their recovery.”
How bad is the current state of the US dollar? When the euro was first introduced in 2002, one US dollar was worth 1.10 euro. Today the same dollar gets about .64 euro, which makes the price of even a simple meal of nutella and a baguette expensive.
“Since the start of January, we noticed a drop in (American) customers of between five and 10 percent and now that we are in April its looks really frightening,” said Arrigo Cipriani, owner of Harry’s Bar. Then again, what better solution to economic frustration than a refreshing Bellini?
You may be sick of hearing how low the dollar is, but today we have just another example of how badly the American currency is fairing. In Amsterdam, small currency outlets are refusing to buy dollars for euros, making it difficult for tourists to exchange their money.
“Our dollar is worth maybe zero over here,” said Mary Kelly, an American tourist from Indianapolis, Indiana as reported by Reuters. “It’s hard to find a place to exchange. We have to go downtown, to the central station or post office.”
Small currency exchanges are different than banks and other institutions in that they don’t want to be holding a currency that will devalue and be worth less next time they have to sell it. One euro is currently worth $1.58, compared to $1.47 a month ago. If you want to make your travel money last, it’s probably time to find a job in Europe.