I simply do not understand today i received a wire transfer from my bank in the U.S i lost 38 cents per dollar???? in conversion to Euros. When i decided to move here i knew the dollar was unfavorable exchange with the Euro but now this has increase close to 3 more cents per dollars since i moved. I know that could be insignificant, but when you exchange big amounts you see the diference. Now here in Puerto Banus everything is very high end prices are higher than Malaga and Sevilla. What i do not understand is that regular people in Spain make less money than counterparts in the U.S but life is so expensive here comparing it to what they make.
Gasoline , electricity, Cars, Housing, everything here is way more expensive than the U.S. Even the food that you buy in the supermarket is more expensive. I still have most of my money in the U.S i still trust the U.S banking system over European but i am looking very carefully in maybe opening somekind of Swiss account because this brings the most security. Today in my bank i had a conversation with the bank manager he and I have become a freinds he told me it is just market fluctuations and that is due to the mortgage meltdown in the U.S. What i do not understand is that the GDP per capita of the U.S $ 44,000 comparing with the UK $ 31,800 and Germany $ 31,900 and the EU in general $ 29,900 it clearly shows that America is the richest country in the world with the strongest economy in the world it just does not make since to me.
That GDP stat is, evidently, out of date. With current exchange rates those will have evened out considerably. It sounds like you’re seeing a bit of culture shock; indeed the US and all it’s riches are, essentially, tied up in the top 10% of its citizens.
Remember though, you don’t have $300/month in medical insurance! Food is cheaper in Spain, restaurants are cheaper, booze is cheaper. Housing should be about the same averaged out. Energy is, however, going to be more expensive in Europe. That ought to tell you something about personal energy dependence - you gotta conserve.
What we’re seeing now is the beginning-midst of the end of the USD as de facto. The Euro is far safer. Even the Arabs are ditching their bucks for bridges. Whatever money I have I get it out of US currency asap. Then I buy products from the US cuz they’re cheap now! 😊 Too bad about those customs guys though.
Puerto Banus is NOT the cheapest place in Spain by the way, in fact it’s about opposite.
And you really ought to look at a currency exchange provider: they’ll beat the banks on exchange rates.
Now the GDP figures are current in the CIA factbook 2006 even with the Euro-dollar exchange rate. The US still has a better nominal GDP per capita way stronger than Europe as a whole and stronger than Germany and the UK. It is true that allot of people have move their savings to Euro please understand that more than 400 million people in Eurozone uses it as the currency of savings when they used to use the U.S dollar. Parts of the actual problem with the U.S dollar is the trade deficit mainly with china this creates an effect that downgrades the value of the currency. Also the amount of debt of the U.S goverment has that is issue in bonds which is bought mainly by pounds, and Euros from international investors specilly the chinese which trade their yuan for Euros to get great value. The dollar is sitll the worlds currency and that is changing but if you talk to any Swiss banker they will tell you the world still has it reserves in U.S dollars. As you know historically the Pound has been the stroghest currency in the world but this is directly due to the actions of the Bank of England controlling the fluctuations of foreign currencies to protect the pound. I due think that now it looks more favorable to have Euros than dollars but time will tell when it comes to worldwide trust U.S fed controlls the World Capital Markets and they could start reversing the trend in reducing interest rates and buying back U.S debt liquidating the markets with U.S dollars putting pressure n the Euro putting it back to pre 2003 levels under the dollar. But understand by keeping the U.S Dollar low U.S exports are cheaper and to weather the Mortgage meltdown that is going on in the U.S Exports and Industrial investments are keeping the U.S economy out of recession.
I disagree with you Food is more expensive than U.S. For example i understand the Area that i live is very high end so is much expensive but i due most of my food shopping so far at Hipercor in Marbella and from experiences prices are higher. Last weekend my neighbor invited me to go with him to Carrefour in near Malaga is the French version of Walmart and still prices are higher than U.S. In regards to Housing maybe on the rural areas but in big cities including Marbella there are more expensive. But still the pace of life here is wonderful people are great specially the Britts that are very educated and classy and are the majority of expats in this area. The only problem that i had here Once is that i look very latin and i talk spanish with a latin accent. And i was stop in the road by a guardia civil which question in a rude manner if i was an illegal alien and if the car that i was driving was stolen. Thank god! i showed him my a copy of my U.S Passport which i carry in my wallet as well as a copy of my Residence visa and my NIE number which all check out. He told me that i need to change my license that i am not an EU member i explain to him that by an agreement People from New York and Florida could drive with foreign license for a year, He check that out and let me go but he was very rude!! I Spoke later to my lawyer and he told me that they are cracking down on Illegals and to expect the unexpected but to be quiet and nice if you don’t want a stupid ticket on your record. Besides that and the quality or the lack of service in restaurants and shops and closures on Sundays like everything you must adapt to it.
Yeah, it seems like you have a good attitude about it (by the account in your last paragraph), but that’s tough to keep up over the years. Have you clicked the Spanorama link at the top of the page here? Check those out. They’re by The Cheat, who’s writings are often about bitter expat vs. happy expat.
The USD meltdown still has a ways to go, long term. Their baby boomers are going to be pulling $ out of the markets in droves by about 2012. National deficits of half a trillion dollars every year. The shrinking middle class… I could go on and on but any way you cut it the US is a shaky investment at best these days; it’s due to hit the wall in the next decade.
Food is SO not more expensive my man! Go to Dia! Mercadona! It’s like 2/3 the prices of Walmart (well, maybe with the exchange rate it’s closer to the same now). Carrefour is pretty cheap too. As for housing, if you take a look at the top end of the market you’ll see that the US still peters out at over $1.5 million (Marin, Palo Alto), I think in Spain there are a few cities that approach $750,000.
But why Puerto Banus and Marbella? It’s sooo not the Spanish experience. 😊
In addition to what i have been saying allot of younger Spaniards between the ages 25-35 have ask me why i move to Spain? they still feel that America is the land of Opportunity to become rich entrepeneur and that is true. But i tell them personally that you get tired of the fast pace of life and that is really demanding on one’s body and soul and that i think the pace of life enjoy in areas of Europe is much better because it allows to find yourself and your real happiness. Life in the U.S is based on how many material things you could amount to have and that is fine for whoever like s that. Life in Spain is more family oriented Socially healthy and Sound. Even thou i complain sometimes about the slow service and lack of different things you enjoy in the U.S i feel more calm and able to spend time in which ever manner i feel is right to me. When people ask me were i am from i said latin America with Spanish roots and this does makes a difference specially with Spaniards. But now i do not agree with the treatment Gringos blue eyes Americans are getting by some Europeans and that is simply not accpetable and that is why sometimes i retaliate with Facts and Figures which put things in perspective. Like i said not all americans are republicans not all Americans are pro bush and pro war and it is not fair that all Europeans think that is America.
Mortgage meltdown is going to hurt the economy but by next year it will all be over!!! that i assure you. Take it form a person that has made money in Real State all there life. Go back to the Dot.com bubble burst in the year 2000 and then sept 2001 by 2003 not only did the market recuperate those events and i feel were worst than this one but it gain territory convertng the disaster in great gains. from 2004- until July 2007 the U.S market grew and average of 14% per year this is higher than any other market in the world. What happen in the U.S was predatory lending to people that could not simply afford to buy their current homes. Mortgage lender in order to make a quick buck lend money to those people at very high interest and non-conventional loans that they knew that when it came time of pay the balloon payments these people were not going to have the money to pay. During that practice the construction of new homes became the highest America has ever known this cause a ripple effect on overstock on inventories. This became the perfect storm the easy credit market inflated by those factors created allot of speculators flipping investments to make quick buck and for a while this resulted in a very good business ” I Know”. After the origination of those loans reach 4-5 years in those conventional loans people were just paying interest on interest and then came the reality checked those balloon loans for those people had adjustable mortgages and adjustable payments which required a deposit to the principal and simply people did not have the money. Then came Refinancing but because of the amount of loan Defaults banks were squeezing out credit to the Mortgage lenders so this created a Ripple effect on investors and Specualtors that now were not getting the finance to complete their flips or developments. The lack of Sales in the Real State market created a 20-25% price decreased in values those who could not pay their crazy loans were unable to borrow from their houses to make the payments because suddenly their loan was worth more than the house. This situation was caused by predatory lending and people getting over their heads. Now what i see this correction has may 6 months to a year to completely recover and we will go back to normal lending practices which will create a better and stronger market for the future. Now the U.S Economy is a credit Financial service economy and is based on credit gains form different tipes of Finance and loans now the amount of money being lost by banks i causing that banks protect themselves and be more stricter in finance. But still the U.S Fed as well of the Banking sector is so strong and deversified please understand that U.S banks like Citibank and Bank of America as so deversified outside the U.S as well as JP Morgan, Goldman Sachs, Merryl Linch that they are still posting good gains. PLease remember that the U.S financial institutions are the largest and most liquid in the world.
Sorry that i go on but this subject is my passion of mine. I am an engineer that became a developer and investor and the reason i did not loose money in the Real State market in the U.S specially Miami is because i study the signs of the times and saw this situation coming. I did made allot of money but by 2005 i started to see trend regarding predatory lending. I started pulling back and only investing in those projects that had quality borrowers and also started diversifying myself to emerging markets like Panama and Dominican republic. Whoever in my industry say they did not see this coming they were living under a rock!!! This tidal wave has been coming for at least 2 years but people were not paying attention and the mighty quick buck was more powerful. In my Experience here in Malaga i contracted Kristina Szekely very experienced Realtor and staff and what i am seeing is a drop in Sales in Spain as a whole and a steeper hole in Costa del Sol. Even thou in Spain Credit is not as easy as it is in the U.S Slow down is scaring investors all over the place and specially in the U.K which is the country that invest the most in Spain’s realty market. This is due that allot of UK Banks had very important investments in funds tied to Mortgage Lenders in the U.S and they are loosing billions of dollars. This ripple effect is being felt in the UK were housing is sluggish dropping 8% from last year and expecting even bigger loses as UK banks also feel the credit crunch and they are transffering that to borrowers in the UK.
No worries, that’s cool that you’re going into detail and all. Have you read any Robert Kiyosaki? I read a few of his books back in the early half of the decade and it sounds like you’re pretty in touch with his ideas.
In the last 12 months the exchange rate has ranged:
1$ buys:
.72150 - .80070 euros currently at .72635
also in the last 12 months
1 UK pound buys:
1.4557 - 1.52950 euros currently around 1.47
so the Brits are also having to deal with currency exchange fluctations.
There are currency exchange companies who will fix a rate a year ahead. However I was offered 1.45 but have managed to average 1.47 during this year using my own bank.
Regarding cost of living it has gone up a bit - but of course it depends how you shop - if you like the locals ie fruit and veg in the street markets it is still cheap and good quality. Try the DIA supermarket and get their card for even more discount prices. In this area (Costa Blanca) we have a very competitive market with Carrefour, Mercadona, Dia, Eroski, Mas y Mas, SuperValu, InterMarche, all looking for customers.
Rokipatel is quite a breath of fresh air in these posts, and many of the issues raised I agree completely with. Especially cost of living. Years ago (on the peseta) things were much different… Now it seems that just for changing to the Euro, Spain has become a much more expensive place to live. However - based on the actual standard of living - I would never move back to my native country (UK) infact I spent 4 days there this week and couldn’t wait to come back!
Anyway - on to what I know best…
Foreign Exchange - without me going into over and over in different areas of the forum, check out my other posts. Anyone regsitered on the forum is more than welcome to use the services of my company @ zero commission. Meaning we will give you he best rates backed up by the best level of service. I am based in Spain and am the Country Manager within the company. If anyone needs advice or help with this, let me know!
With regards to Robi’s post…
Have you checked that you are actually getting that rate? In my experience you may well be, however TT fees and commissions are usually quite high. Your bank has to make a profit so getting so close to what looks like InterBank rate would probably mean that you are actually getting less in a round about way.
Booking a forward contract with any provider means that the provider will take about a 3% margin. This has nothing to do with currency fluctuations and is actually about the interest rates of the currency pair (eg EUR/GBP - Interest rates from ECB / BOE - forecast)
Normally - if you have someone keeping their eye on the markets (i.e a dealer, like our guys) a spot purchase of any currency would be better than a forward, depending on amounts and other factors.
It would be interesting to find out the service you are getting from your bank so we can all compare whats what.
Rokipatel claims food is more expensive in Spain than it is in the US. Is he comparing the same stuff? Everyday food is much better quality in Spain than the US (unless you search out farmer’s markets and so on in North America). When I’m in Spain I buy jamon serrano, hand-made sheep’s milk cheese, artisan bread and pastries, ultra-fresh fruit, veg and fish, extra-virgin olive oil, organic lamb and goat meat, wild mushrooms… This stuff is all affordable and widely available in Spain, whereas in the US and even the UK you’d have to go to specialist stores and pay a fortune. Basics like rice, pasta, garbanzos, coffee or whatever are cheap here too. So what’s more expensive in Spain - imported Hershey’s and Cheerios? Marshmallow fluff? No shit, Sherlock. As for eating out, I’ll accept that you can spend a good deal in a Spanish restaurant these days, but I don’t know where in the States you would find the equivalent of the 7 or 8 euro menu del dia consisting of three courses of real food and wine. Or for that matter, a couple of exquisite tapas and a glass of good wine for the price of a burger and a soda in the States. One of the great joys about life in Spain is the enjoyment of really, really good quality, local and seasonal food on a daily basis, within a sophisticated and knowledgeable culinary tradition where everyone is an expert. Even France has fallen behind in this, in my opinion, although Italy and Portugal are still comparable. The food culture in the States is barbaric by comparison, whether it’s cheap or not.
Hi Riveria, Yes that is the actual exchange rate that I have received from the Caja Murcia - I am not using a transfer system I am paying in a UK cheque for which they only charge me 6 euros at my branch - 12 euros in other branches! I was offered 1.45 fixed at the start of 2007 by one of the big currency exchange outfits but to be honest I have done better with the bank.
Having said that I do believe that anyone in the UK who wants to send money to Spain would be wise to check out what the companies are offering vs. what their UK bank offers.
I must say I am surprised but it is not the first instance I’ve seen of a ‘Caja’ dong well for a client. Most people make the mistake of not using a ‘Caja’ and just going with one of the better known brand banks.
I for one made the switch to using a Caja and have noticed the difference ever since. However I have had problems in the past with UK / US cheques taking upto 6/8 weeks to clear. I now use my company as they clear much quicker and I get a better rate.
Most of my posts revolve around the anguishes some clients find when using a bank. My point is, try something new - see what you can get - instead of settling for something lower.
You have obviously been vigilant in the process and made it easier for yourself which I commend. But… (theres always a but) I bet I could beat the last rate you got from your bank!!!
It’s not a case of ‘told you so’ but more of a ‘lets actually see what you’re getting’...
If you want me to do a historical comparison let me know some details and I’ll find out what we could have done.
For your own security lets make it theoretical - but as close to the truth as possible?
Hi Riviera, I have checked the dates regarding my UK cheque clearances in Caja Murcia and in August I paid it in on the 22nd and it became available on the 27th which is interesting because Lloyds in the UK show it being debited on the 29th. I am happy with this service and it is very convenient for me.
Sounds good to me Rob. Can’t really grumble about that level of service. As I mentioned before the ‘Caja’s’ over here seem to be that bit better…
I had a look at your website and notice that you have links to a few currency sites, that are just links and not ‘partner click throughs’ does your company have a relationship with these to help your clients?
We do not have any contractural arrangements with any of the links on our site - they are merely for client convenience, information and options. Neither do we offer any guarantees or endorsements regarding their services.
