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. Wouldn’t know. When I’m in India, I never pay the NRI price or use NRI sales channels. That’s why I called it the white man’s tax – when I was last at Agra I paid the local price and walked on in. Never thought to pay 10x more.

  2. PIOs won’t hurt so much either way, I guess. i wonder how this is playing out on the black market.

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

  4. 5 · razib most of the developed world is overloaded on debt (which fuels china’s export driven growth). worry about more than the dollar devaluation

    Yeah, though frankly I’d be more worried about being a creditor in this environment (particularly of dollar-denominated debt). I shall have to look into obtaining one of these 500 euro notes to wrap around my “Philly-roll” (wad of cash, though I couldn’t find the term so identified online–thanks for the other cool new phrases, Ennis!).

  5. A little bit of devaluation will do the dollar good. Manufacturing threatens to return to the country because of the increasing expensiveness of imports. China and OPEC are gradually moving away from the dollar, but only very gradually because they don’t want the value of their dollar-denominated assets to plummet BEFORE they get out of the dollar.

  6. damn – i still got a few hundred USD left in a cupboard somewhere. I gotta get rid of that really quickly. Now if only I had kept the Canadian $$.

  7. Yeah, though frankly I’d be more worried about being a creditor in this environment (particularly of dollar-denominated debt).

    well, unless civilization collapses big creditors will get bailed out. they always do, right? and if you are in a position to be a creditor you have more margin than if you are a debtor ;-) filing for bankruptcy doesn’t put food on the table.

  8. 9 · razib well, unless civilization collapses big creditors will get bailed out. they always do, right?

    Well, (1) I’ve got some Czarist Russia railroad bonds in my apartment’s foyer, qua wallpaper (OK, I’m odd) and (2) yeah, creditors are not going to get nothing from the US, but they will take a “haircut” (e.g., devaluation of the dollar is already hitting holders of dollar-denominated debt far harder than it’s hitting the average American consumer–the latter buys far less than 100% of purchases from global markets (think haircuts)). The far more difficult task will be for the US to take the world for chumps (by taking dollar-denominated debt) a second time!

  9. 11 · razib like i said, unless civilization collapses

    Fair enough–what are your odds on that, btw? Did you read about the uranium bust in Slovakia? I’m going with gold!!

  10. i’m ignorant, but put at 1 out of 3 the chances for a major world wide depression in the next 15 years. i don’t think the major problems are environmental or military. i think they’re sociological and psychological. humans are subject to the ‘irrational herds’ tendency, and i think information technology is exacerbating that problem.

  11. also, there’s a long line in anthropological thinking that our civilization, broadly speaking, has over the last 10,000 years evened out short term ‘corrections’ and dampened instabilities at the cost of major longer term mega-disruptions. i think that’s plausible.

  12. I was considering coming to New York for Christmas shopping…to take advantage of the dollar’s all-time low exchange value…now I can only point and laugh at the Indians who left our country to seek “a better life” in the United States…

  13. now I can only point and laugh at the Indians who left our country to seek “a better life” in the United States…

    Yes, Americans are lining up the Indian embassies to get work visas for India. Some are going to Nepal in the hope of illegally crossing the border and finding a job in any dhaba in Eastern UP.

  14. Wouldn’t know. When I’m in India, I never pay the NRI price or use NRI sales channels. That’s why I called it the white man’s tax – when I was last at Agra I paid the local price and walked on in. Never thought to pay 10x more.

    Because its somehow acceptable to reap the benefits of the Indian public works departments and architectural trust departments, without paying Indian taxes or accepting the responsibility of Indian citizenship. India relies on the extra money charged from foreigners to preserve its architectural heritage and every rupee of lost revenue means that some exquisite Avadhi tomb goes further to seed or some poor guide with a masters degree gets paid even less of a pittance. It always fails to amaze me how some NRIs are ok paying $20 to get into the Met, but not ok doing the same in India.

  15. Because its somehow acceptable to reap the benefits of the Indian public works departments and architectural trust departments, without paying Indian taxes or accepting the responsibility of Indian citizenship. India relies on the extra money charged from foreigners to preserve its architectural heritage and every rupee of lost revenue means that some exquisite Avadhi tomb goes further to seed or some poor guide with a masters degree gets paid even less of a pittance. It always fails to amaze me how some NRIs are ok paying $20 to get into the Met, but not ok doing the same in India.

    I knew somebody would bring this up. For the record, the Met is pay what you wish, and I have never once given them an Andrew Jackson for the privilege. And the real reason I end up paying local prices is because I’m usually in a group of my cousins, and somebody will pay for all of us together, usually not me since I’m the guest.

  16. Going by Bernanke’s comments this morning, further interest rate cuts are likely, putting even more downward pressure on the dollar.

    There’s a reason why our desi culture favored Gold since ancient times : Fiat currencies are unreliable.

    M. Nam

  17. For the record, the Met is pay what you wish, and I have never once given them an Andrew Jackson for the privilege.

    So you are a freeloader in your adopted country also.

    like the proverbial bats in the animal-bird fight story I guess.

  18. Going by Bernanke’s comments this morning, further interest rate cuts are likely, putting even more downward pressure on the dollar

    Would you say more interest cuts within a week, months?

  19. Give Ennis some slack will ya! He is doing India a favor by blogging on all things Desi. Goes to say he is Indian at heart.

  20. So you are a freeloader in your adopted country also.

    No, I’m a cheepskate in my own country.


    For those of you who need further explication:

    My reference to being an NRI was confusing. I am an ABD. And I’m not freeloading, I always pay at any museum. I just don’t pay the “recommended” amount, that makes it cheap, not free.

  21. now I can only point and laugh at the Indians who left our country to seek “a better life” in the United States… Yes, Americans are lining up the Indian embassies to get work visas for India. Some are going to Nepal in the hope of illegally crossing the border and finding a job in any dhaba in Eastern UP.

    I believe Meena meant the Netherlands by ‘our country,’ not India. Right, Meena?

    Though I guess an argument could be made for people who work in IT and who prefer middle class Indian life to middle class American life.

  22. Would you say more interest cuts within a week, months?

    The Fed’s meeting on Dec 11th – the stock market has already priced in a 50 basis point cut.

    M. Nam

  23. So you are a freeloader in your adopted country also.

    ouch. there are moments i cringe when dad starts negotiating in the (say) shoe store. the cringe goes away when he actually gets a 10% discount and a free jar of shoewax. That’s about $40 saved – a tank of gas to put it in perspective. it isnt ‘freeloading’, it’s a free market and a timehonored tradition in ANY society. dont see any reason why ANYone should be macaca’ed to ‘behave’ a certain way. Money isnt dirty yarr. keeps the world rolling.

  24. furthermore, PWYC is typically used for slow-days to bump up traffic volume, eg monday matinee or tuesday evenins. There is a strong financial reason. they arent losing money.

  25. Wait, makes no sense – they’ve still got to buy those rupees from somewhere. Now some Indian bank gets saddled with the dollars instead? Is that an improvement?

  26. Wait, makes no sense – they’ve still got to buy those rupees from somewhere. Now some Indian bank gets saddled with the dollars instead? Is that an improvement?

    If the dollar keeps falling against the rupee, they’re better off fixing admission in rupees rather than dollars.

  27. Wait, makes no sense – they’ve still got to buy those rupees from somewhere. Now some Indian bank gets saddled with the dollars instead? Is that an improvement?

    i think the bank is better suited to managing FX risks than some tourist site. its clearly better. although the demise of the greenback is annoying. thats why i hold all my debts in USD and a lot of assets abroad. my only USD asset is my primary residence. i would rather not sell my home. its pretty.

  28. An interest rate cut now would be unwise – the Fed’s job is to keep inflation in check, not bail out financiers with cheap money. Commodity prices are still rising, oil is still high – there are still plenty of inflationary pressures that the Fed needs to be aware of.

  29. An interest rate cut now would be unwise – the Fed’s job is to keep inflation in check, not bail out financiers with cheap money. Commodity prices are still rising, oil is still high – there are still plenty of inflationary pressures that the Fed needs to be aware of.

    the downside risk is that financial turmoil spills into real economic activity. im bond bullish these days…

  30. In 1960, my first year in the United States, the exchange rate was fixed, one could get dollars only after Reserve Bank authorization (forunately, I had a scholarship in dollars, as many did in those days), and the dollar was five rupees. Some years later it became ten rupees. In the era of floating rates, it seems to have been close to fifty rupees for some years, until sinking to the present forty or so. Still, from what I have read the dollar is not about to cease to be the world’s reserve currency.

  31. nala:

    I believe Meena meant the Netherlands by ‘our country,’ not India. Right, Meena?

    Yep. I wanted to post, but you were first. ;) The reason I said that is the way some Indians go on about Europe, you’d think that we were all very much oppressed by white man. Of course every country has it’s flaws, not saying it doesn’t…but it’s not a frickin’ Third World country, ain’t it?

  32. people have realised that the EU(Euro)is the only opportunity to survive in the global world?

    these things change. when i was in the UK in 2001. all the investment banks were saying the GBP was going to go to 1.1 to 1 vs the dollar. 9/11 kind of reversed that trend. something big can change it in the other direction….hard to tell with a long enough time horizon.

  33. Yep. I wanted to post, but you were first. ;) The reason I said that is the way some Indians go on about Europe, you’d think that we were all very much oppressed by white man. Of course every country has it’s flaws, not saying it doesn’t…but it’s not a frickin’ Third World country, ain’t it?

    europe is quite nice….i would have a hard time living there though. felt a bit out of place.

  34. Re: #39 – 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.

    This, combined with strong FDI flows into India, could make the INR continue to appreciate relative to the USD in the long term, quite separately from any short-term appreciation. Even a return to the kind of rates Candadai spoke about in #37 – is not beyond imagining, in the sufficiently long term (in my view).

    A South Asian Monetary Union (trust me to bring that up!) has already been scoped out, both to hedge against instability in inter-country financial flows, and to serve economic increased transactions resulting from SAFTA. I was surprized to find recently that even countries such as Bhutan and the Maldives have their own currencies – their population, when combined, is less than 1 million people. I can easily see these countries ‘rupee-izing’ in the first round.

    Two things to think about:

    1) Two relatively unknown brothers made more than $4 billion on the Bombay Stock Exchange earlier this week. Each. The first $4 Billion in just 20 minutes. With the money they made just on that one day, they could buy out everything both Bhutan and the Maldives make in goods and services in a whole year, and still have more than $2 billion left over. Again, that’s just from what they made in a single day on the BSE.

    2) India announced $1 million (that’s with an ‘m’) in aid to Bangladesh after the cyclone of November 15. (Why was it denominated in dollars?) And by the purest of chances, the USD touched its lowest point in the recent past – against the INR on November 16, the day this was announced.

  35. europe is quite nice….i would have a hard time living there though. felt a bit out of place.

    I guess if you’re used to lots of brown you’d feel that way…but I wouldn’t trade this place for the USA for the world…there’s a million things wrong with it, but I think that I’d feel a bit strange in a country where everybody spoke English and where it would be like Little India in some parts of towns…;)

  36. I guess if you’re used to lots of brown you’d feel that way

    not so much lots of browns. more like, my parents like an american now. not sure if i would ever be “european” the same way my parents feel american. i could be wrong though. i guess any place is nice if you go there with a high paying job offer.

  37. For the record, the Met is pay what you wish, and I have never once given them an Andrew Jackson for the privilege

    Absolutely–they already get tax exemption, etc., which we pay for. I always say “sorry, I’m a bit short today,” and fork over a $5 or a $10. Never freaking $20.

  38. people have realised that the EU(Euro)is the only opportunity to survive in the global world?

    But Europe doesn’t have the ROI like the US does (or did so far). Can’t imagine Europe being the next biggest marketplace to be! Maybe China, maybe India, but the US is not going to let go of its lead easily.

  39. There’s just something about the ewwro that rubs the wrong way ;) .

    The euro is not meant to be used as a topical ointment