Your money’s no good here

First the world’s richest supermodel stopped taking the dollar as payment for services rendered:

The catwalk star’s twin sister and manager Patricia told Bloomberg in September that: “Contracts starting now are more attractive in euros because we don’t know what will happen to the dollar…” [Link]

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Rupees only please – this is a quality establishment, we only take hard currencies here

Then rapper Jay-Z switched his fetti from Franklins to purple euronotes, choosing gouda over american cheese:

Jay-Z … is seen cruising the streets of New York in Bentleys and Rolls Royces (now owned by Germany’s Volkswagen and BMW) with a briefcase of 500 euro notes. [Link]

But now comes the final low blow for the beleaguered greenback – you can no longer use it to pay the white man’s tax at Mumtaz’s tomb:

Foreign tourists to many of India’s most famous landmarks will no longer be able to pay the entrance fee in dollars, the government says. The ruling is aimed at safeguarding tourism revenues following the recent falls in the dollar. Until now, foreign tourists to sites such at the Taj Mahal have had the option of paying in dollars or rupees. The ruling will affect nearly 120 sites of interest run by the Archaeological Survey of India (ASI). [Link]

That’s right gringos – put away your cheddar and feed sarkar some paneer, you gotta use rupees if you wanna license to skrill.

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64 thoughts on “Your money’s no good here

  1. prob will be one of these two, but that will take a long time to happen…

    and till that time (if it ever comes) US will most likely remain the leader.. unless of course like razib says civilization itself collapses, then all bets are off!

  2. White man’s tax in India sucks big time for us low budget tourists, or for the non-Indians who reside there for an extended amount of time, also on a fixed and low budget, while the bada paisa walla rich Indians get in for peanuts! Not fair, not fair at all.

  3. White man’s tax in India sucks big time for us low budget tourists, or for the non-Indians who reside there for an extended amount of time, also on a fixed and low budget, while the bada paisa walla rich Indians get in for peanuts! Not fair, not fair at all.

    It’s plenty fair. You are upset because some 5% of the locals can afford to pay the non-Indian rate and don’t? Price discrimination makes plenty of sense when you don’t have a tax base that can maintain heritage sites and higher entry prices would deprive locals of their own history. India is not an easy place to navigate and I am on the side of foreign travelers on most issues except this one

  4. So what’s the future of Euro?

    Looks as if the formation of EMU has made the Euro to fit for fight , a worthy opponent to the dollar.what can ,then,stand in the way of the Euro’s ascendancy?

  5. Did anyone catch the bit on CNBC a few nights ago about investing in India?

  6. There’s a reason why our desi culture favored Gold since ancient times :

    Gold is high today because of the 7 year commodities bull cycle. Gold prices are at 28 year high. But make no mistake … GOLD has been a LOUSY investment. If you bought gold in 1980 at $750 you would have to wait 27 years to be in black (to make any profit). Which would be worse than putting the money in bank. If that person had put the money in Dow he/she would have had significant gain.

    I think that Gold and other commodities are at their peak and after second half of 2008 next move in GOLD is DOWN for several years. I am putting my money where my mouth is. Lets see what happens !!!!

  7. To update the story at my comment #42, but otherwise slightly off-topic:

    India is now lifting the ban on rice exports to Bangladesh, and providing other kinds of assistance and relief after the cyclone.

    Also, apropos of the SAFTA issue that I had also mentioned in that comment, the PM signaled India’s willingness to undertake “asymmetrical responsibilities” and provide Bangladesh access to its markets without insisting on reciprocity at the recent SAARC meetings. I see this as a good step forward.

    India’s foreign minister, Pranab Mukherjee is currently in Bangadesh, where he met Bangladesh’s Chief Adviser to the Government, Fakhruddin Ahmed.

  8. A monetary union presupposes stable and compatible political systems – none of the countries in the subcontinent qualify, though Bhutan and India come closest to having a stable one.

    BD – dictatorship with unpredictable bouts of democracy Pakistan – ditto Sri Lanka – authoritarian democracy with occasional streaks of dictatorship Nepal – embroiled in a tug of war between absolutist monarchy, Maoist communism, and plural democracy. Bhutan – absolutist monarchy. Has union with India on many affairs – financial, travel, etc. Interestingly, it tracks “Gross National Happiness” instead of Gross National Product, and consequently is a generally happy country :) .

    Other than Bhutan and India, both countries already having a union, I don’t see a subcontinent-wide union feasible unless these other countries evolve stable political systems.

    India and Nepal used to have a union in financial and travel matters as well, and the Nepali Rupee is still pegged to the Indian Rupee (painfully for them, because the Indian Rupee is gaining value), but the union was abrogated because of the ease with which Pakistani terrorists got into India via Nepal – no visas needed, no currency problems etc. Now India and Nepal require visas to cross their common border.

    On topic, the dollar is still well-valued, thank you very much. A rupee is worth some 2.5¢. A year ago, it was worth 2.3¢. Big deal! Geez, you gloom-n-doomers, talk to me when a rupee is worth a dime, or even a nickel!

  9. most of the developed world is overloaded on debt (which fuels china’s export driven growth). worry about more than the dollar devaluation.

    Although this also includes the U.S. (whose consumption China subsidizes to the tune of approx. $1b/year in trade deficit spending). I actually think the dollar devaluation points to a problem that could have longer-term consequences than people think. I don’t think they’re insurmountable, but I don’t really see folks in our nation’s capital taking any responsibility/action either. Also, a weak dollar is not going to “even out” the dampening effects via exports (when, during the primacy of the U.S. economy, has that ever worked for us?), in part because there are other countries that STILL make the same knock-off goods, but cheaper. I would rather be holding GBP right now.

    Commodity prices are still rising, oil is still high – there are still plenty of inflationary pressures that the Fed needs to be aware of.

    Amen to that. It seems (to me, at least) the Fed has been bailing out a lot of financiers lately. While I understand the importance of banks to the economy, it also might do the Fed some good to actually try to prevent risky and stupid shit shows (e.g. the current mortgage crisis) as opposed to bailing banks out ex post facto.

    I thought Ennis was 2nd gen? Also, the Met IS pay as you go. That doesn’t mean you have to pay anything, let alone $20. I often paid $5-7 when I was a student. If I was making more money, then I would have paid more. I think that’s fair. I also think the NRI tourist price for desi sites is fair. If you can afford to fly to India, you can afford the $5 to see the Taj.

  10. On topic, the dollar is still well-valued, thank you very much. A rupee is worth some 2.5¢. A year ago, it was worth 2.3¢. Big deal! Geez, you gloom-n-doomers, talk to me when a rupee is worth a dime, or even a nickel!

    This is a relative measure that depends on the strength of both currencies. It is concerning when the dollar has devalued so significantly against the Canadian dollar, Euro, and GPB (relatively comparable currencies when we account for market strength, etc.). However, it is even more concerning when MUCH WEAKER economies spur the dollar, in part because of the number of asset-investments held in USD. It’s easy to trivialize this by saying the rupee has not appreciated much. While on its face it might look that way, it’s not a great assessment of the situation. Speaking selfishly, as an American, I certainly hope we are not at the point where a rupee is worth a nickel/dime because of the dollar’s devaluation vis-a-vis our sluggish economy and gluttonous debt (as opposed to because of India’s economic growth).

  11. Speaking selfishly, as an American, I certainly hope we are not at the point where a rupee is worth a nickel/dime because of the dollar’s devaluation vis-a-vis our sluggish economy and gluttonous debt (as opposed to because of India’s economic growth).

    I wouldn’t worry about that happening. I think the weakening dollar, up to an extent, is going to be great for manufacturing to return to the country. Imports are getting more and more expensive. The strength of the Euro in particular is going to be bad for their industry, and they’re already aware of this. The US is the largest consumer market in the world – though Chindia are catching up somewhat – and if other countries want to sell here, they can’t afford their currencies to be so strong. It’s a self-balancing mechanism, so I don’t really see the dollar continuing to depreciate beyond a few years before the trend reverses again – exchange rates are invariably cyclical.

    While the Rupee has appreciated some against the USD (on account of the US weakness), it has depreciated significantly against all other major currencies. So the story that India’s economic growth is leading to a strong rupee doesn’t make too much sense, though you’ll never find that mentioned in the Indian media.

  12. There is a mean-reverting tendency to all exchange rates, so depending on how far back you look, and what segment of the series you focus on, you can make pretty much any statement you want about appreciation or depreciation. The Indian Rupee buys more USD, more Chinese Yuan (CNY) and more Japanese Yen (JPY), but fewer Euro (EUR) and fewer British Pounds (GBP) than it did five years ago. The British pound has behaved in this period as if it were loosely linked to the Euro, with a strong mean reversion in a fairly narrow band, and its appreciation against the Rupee therefore does not seem independent of the Euro’s appreciation against the Rupee.

    So the only major currency that the INR has depreciated against – has been the Euro. But: (i)The Euro has gained against every other currency during this period (ii) The Euro is fairly new, so it can be argued that this gain nullifies the original ‘novelty discount’. There will also be some short-term real gains in consolidating the Euro monetary union – these perceived gains cannot last for ever, and do not by themselves indicate any powerful long-term productivity gain. So bottom line, I think the fact that the INR has gained against every currency except the Euro over the last five years is quite significant.

    To the larger point about a South Asian Monetary Union – first of all, it is on nobody’s agenda as the very next thing to do. It will take a good bit of time before things get there. The political harmonization would be nice, but is not essential – more critical is whether the different economies respond to different macroeconomic shocks in roughly the same way. Here the evidence is not unambiguous, but since some amount of macroeconomic convergence is foreseen even by the skeptics, it doesn’t matter right at this point in time. For the record, SAARC is commited to a ‘South Asian Economic Union’ by 2020, and steps along the way include a preferential trade area, a customs union and a free trade area. Those steps will induce considerably more macroeconomic convergence than now exists, and then a true monetary union can come into being. But these same steps will also induce greater harmonization in political and state structures across South Asia, and that will require reform both in India and its neighbors.

    The nice thing about the SAMU is that an existence proof – or precedent – exists. During 1860-1940, the Indian rupee was accepted throughout not only South Asia, but also parts of the Middle East, East Africa and South East Asia. And something like that can happen again.

    As an aside, I find the persistent, almost xenophobic ‘Indian exceptionalism’ that comes up often, as in someone‘s comment above not only incorrect but also geographically inconsistent and powerfully offensive to common sense. This is not the thread to get into that detail though.

  13. Re:#42 “India is currently negotiating a free-trade agreement with the EU – and it may happen sometime in 2008 – probably even before the free trade agreement with the US, which is also being talked about.”

    is that a Mini Treaty for europe?

    In india,one is aware that so many ingredients and chefs may not improve the quality of “khichiri”,(it is something I’ve never been fond of ,even after 27 years in india)

    it’s because everyone knows that it’s more difficlut to prepare a good meal with 27 cooks than 6.

    The issue is that the EU construction process has a tendency to become political :with each nation having its own ‘national interest’ to safeguard.