Jaunted

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Dollar-Euro Exchange Rate Totally Killing Us

At this rate, we'll never head back to Europe: a Euro now costs $1.40, a record high for a currency that you could buy for 90 cents seven years ago. So why does the dollar suck so bad right now? There are a few reasons, none of which we completely understand. (We made it through our college finance class by reading Pico Iyer books instead of paying attention.)

But we'll try to sum it up: a few years ago, some rich guys borrowed a lot of money at really cheap interest rates. Now it looks like they maybe, possibly, kinda-sorta borrowed too much, which means there's not enough cash to back up the loans. So the US government lowered its official interest rates, and that made currency traders scared that inflation may take off in the States.

Now, there's not much you can do about this, other than decide not to go to the Euro zone. To which we say, awesome! Eastern Europe is still a good value, and Southeast Asia and South America are both super, too. But don't try Canada: a loonie--which used to be cheap--is now on par with the greenback.

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[Photo: ganessas]