Monks entering a temple, Angkor Wat, Siem Reap, Cambodia (photo by Simone Cannon)
On Wednesday, The New York Times reported on the falling value of the U.S. dollar in their story, As Dollar’s Value Falls, Currency Conflicts Rise. The attempts by the U.S. Federal Reserve to stabilize the U.S. economy are having serious repercussions on the global economy as countries such as those in Southeast Asia have scrambled to devalue their own currency.
According to the article, "In recent weeks, central banks around the globe, including those of the Philippines, Thailand, Indonesia, Malaysia, Israel, Taiwan, Brazil and Japan, have intervened furiously in foreign exchange markets in hopes of weakening their own currencies...A stronger United States economy is in everyone’s interest, but (the foreign central banks) fear that investors will flee America’s low interest rates and declining dollar and instead pour capital into their markets, overheating their economies and creating the types of asset bubbles in stocks and housing that burst with such devastating effects in the 1990s."
Salar de Uyuni, Bolivia (photo by Simone Cannon)
What does this mean for travelers? Expensive destinations such as Europe and Japan, countries with strong currencies, will be even more expensive since there is no need for their central banks to offset the effects of the declining dollar. This is especially bad news for Europe, already the subject of a travel alert from the U.S. State Department. There could be a silver lining, however, if in the face of declining tourism, European hotels and travel agencies create incentives, such as bargain travel packages, to lure U.S. tourists back to the region.
Bargains can still be had by traveling within the U.S., especially to traditionally expensive places like Hawaii or Puerto Rico, or by heading to countries where the dollar still has significant value, for example, Argentina, Bolivia, Cambodia, Laos, India and Bosnia. If you are willing to give up some of your independence, package tours can be an inexpensive option. Companies such as Overseas Adventure Travel, while geared toward older travelers, offers tours of excellent value, including airfare, to people of all ages, as well as last minute travel deals.