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New York City Shops Put Up "Euros Accepted" Signs

Reuters:

In the latest example that the U.S. dollar just ain't what it used to be, some shops in New York City have begun accepting euros and other foreign currency as payment for merchandise.

This comes after the Latest Indication of US Economic Troubles: Hip-Hopper Flashes Euro Notes.

Thus, Kevin Hassett, director of economic-policy studies at the American Enterprise Institute and an adviser to Senator McCain, considers it necessary to remind everyone: Ignore the Obituaries, U.S. Reign Will Endure, which is also response to Parag Khanna's essay in the NYT, discussed on Atlantic Review.

I think it is good that NYC shops open up to Euros, but most customers pay with credit card anyway these days. The Boston Globe claimed in November 2007: "With dollar low, US is one big outlet: Europeans arriving in droves for bargains."

Do you see an expression of Schadenfreude on my face? Nope. I am just reflecting on history: Before we had the Euro and before credit cards were popular in Europe, we would travel to other European, Asian or African cities and use plenty of exchange bureaus or banks to convert our national into the local currencies. But this was not possible when traveling to the United States, where it was extremely difficult to find a bank that would exchange Deutschmark into Dollars without several days waiting period and huge fees. The dollar was the only currency Americans knew and accepted. Every tourist had to get dollars before arrival. So we were carrying plenty of cash and traveler checks in dollars. Now the United States is becoming more international by opening-up to the Euro. Cool, but then again, everybody is paying with credit card these days, so it is not such a significant change now.

Related post in the Atlantic Review: Thanksgiving: More Americans Travel to Europe Despite the Weak Dollar

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Pat Patterson on :

Actually use of foreign currency in the US has a long and sometimes honorable history. The American phrase of something being worth "two bits" refers back to the use of the Spanish peso in the US during the late 1700's and early 1800's. That coin(worth about twelve cents) was divided up into eight pieces for smaller purchases. The Spanish doubloon, the English Pound, the French sou and Louis were all used interchangeably throughout the early history of the US even into the last century. During the Depression Standard Oil often demanded that it be paid in British Gold Sovereigns because American Gold Eagles and Double Eagles had ceased being minted in 1933 as well as being illegal to own. More recently it's easy to find stores along the Mexican border and even hundreds of miles inland that accept pesos or to the Canadian border taking loonies and provide change in either pesos, loonies or dollars depending on what the shopper wants. Now finding a good exchange rate is another story.

Don S on :

Just think of it as an opportunity for additional profit. Passing through Schilpol airport I noticed that many of the shops would take US dollors, but a quick mental currency conversion revealed that the conversion rate into euros was pretty bad and I would be far better off using the ATM to withdraw euros or using a credit card. Which is what I did. The Manhattan shops probably stole the idea from Europeans....

Don S on :

One more observation: The euro actually makes this change possible at all. Pre-euro a shop would have had to change francs, dmarks, lira, and guilders in small amounts at ruinous conversion rates with the banks, which didn't make sense. Now they can exchange a larger amount of euros at much better terms with banks. Particularly the large chain stores can do this because they're in a position to aggregate this over many shops. The banks can offer this service at low markup at a profit.

Detlef on :

[i]Before we had the Euro and before credit cards were popular in Europe, we would travel to other European, Asian or African cities and use plenty of exchange bureaus or banks to convert our national into the local currencies.[/i] Tiny nitpick? Credit cards aren´t popular in Europe, at least in the Eurozone. I mean the [url=http://www.ftd.de/karriere_management/business_english/:Business%20English%20Europeans/314448.html]ECB[/url] itself says that "six in seven of all transactions in Europe are cash only". [i]But this was not possible when traveling to the United States, where it was extremely difficult to find a bank that would exchange Deutschmark into Dollars without several days waiting period and huge fees.[/i] You´re not kidding. What did surprise me though that even in the late 1990s it was extremely difficult to transfer money from an American bank account to a German bank account. Friends of mine moved to the USA for a three year period because their German employer had bought a competitor in California. SF Bay area to be exact. They had to pay their German moving company from their German bank account. Unfortunately their company transferred their moving expenses money to their new American account at Bank of America. They had a really hard time finding a BofA employee in the Bay area knowledgeable enough to transfer that money so that they could balance their German bank account again. I was visiting them at that time and they were seriously contemplating just giving me several thousands of dollars to carry them back to Germany and transfer them to their account. It was just unbelievable. I mean SF Bay area? Not exactly a backwater area. --- Question for Americans (or American residents). Back then (year 2000) I was a bit surprised about mailing checks for rent, utility and telephone bills etc in the USA. That was all pretty automated and electronic in Germany by that time. Likewise no payments in Germany would get rejected (bounced checks?) if you overdraw your account a bit. How is the situation today? Just asking and interested....

Kyle Atwell on :

Detlef, I can't speak for other Americans, but paying bills is easy for me in the SF bay area. I do everything online including phone bills, gym membership, etc... in fact, I don't see much purpose for a checkbook. The only time I use a checkbook is when I make a personal payment (to my parents or a friend) or for rent, although even for that I most often us my Bank of America online account to do an online transfer straight into the recipient's account. I am surprised at how expensive it is to do a wire transfer internationally though. Last week I transfered 515 euro for my first months rent in Brussels (I am moving from SF bay area to Brussels at the end of this month), and I was charged 35 euro processing fee by Bank of America. This seemed a little outrageous. On top of that, my new landlord informed me via email that she only received 501 euro, which makes me think the receiving bank took a fee as well.

Pat Patterson on :

That's Bank of AMERICA Kyle, not Bank of Belgium! Which I hope is recognized as a joke! But like you I do all my and the bills I am responsible for as a trustee online. Either directly from my account or via automatic withdrawal. The only check I have to write is for my mechanic who only accepts cash or check. But it was a great surprise to read the fine print and discover that only 1/2 of these bills are elctronically transferred many still send out checks via the post office. One way to avoid bank transfer fees is to simply set up an account that will depostit funds directly into the credit card of the payee. At least for my bank, WAMU, they do not charge anything except they will calculate the exchange rate.

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