Latin America Dollar Power II

Latin America Dollar Power II takes another look at the strength of the U.S. Dollar in Latin America.  U.S. citizens traveling to Latin America for business or pleasure, find that their Dollar buys more.  The current conditions in Latin America (LA) present an opportunity for both expats to relocate and tourists to travel to LA.

Latin America Dollar Power II Map of Latin America

Map of Latin America
Wikipedia Commons

There is no crystal ball. 

There are many claims by various interests to influence you to consider a move to a particular country, but it always boils down to what’s important to you.  What are your priorities?

What Country Should You Consider?

Some articles name countries like Argentina, Bolivia, Brazil, Ecuador, and Mexico as top countries for living and extended stays.  For instance, here is an idea of living expenses in Argentina.

Other articles list countries based upon how “cheap” they are for living and travel.

Still other articles point to the boom in tourism throughout LA and the flaws in the sustainability of that tourism boom.

Whatever the country, there is no doubt that U.S. citizens are seriously considering living and retiring abroad for several reasons, chief among them is the Dollar power in LA.  The Dollar simply stretches further, i.e. buys more than it does in the States with few exceptions.

Window of Opportunity

Latin America Dollar Power II U.S. Hundred dollar bills by Wikimedia Commons

U.S. Hundred dollar bills by Wikimedia Commons

The Dollar in Latin America is on the rise again.  Since 2013 the Dollar has risen against all Latin American currencies.

Dollar power has been growing as Latin American countries continue to devaluate their currency.  This presents a window of opportunity for the traveler and expat, and will continue for some time.

Dollar power has been growing throughout LA in the last several years.  Much of this is due to the overall slower growth in Latin America and the increased intervention in each economy by their governments.

Even with those countries that actually use the Dollar, like for instance Ecuador, the value of goods and services you can purchase far exceeds those goods and services available in the U.S. with few exceptions.

Latin America Dollar Power II US gold certificate 1922 Gold certificates were used as paper currency  in USA from 1882 to 1933. These certificates were freely converted to gold coins. Wikipedia

US gold certificate 1922 Gold certificates were used as paper currency in USA from 1882 to 1933. These certificates were freely converted to gold coins. Wikipedia

Of course, the Dollar has no intrinsic value, since it’s one of numerous “fiat” currencies based simply upon confidence in its value.  Historically, the Dollar was back by gold, but President Nixon ended that standard in 1971.

As we all know confidence can change very quickly in our global economy, but current trends are pointing to the dollar’s strength, if not temporary.

 

Buy More with Less

The long term purchasing power trend has been up since the 1990s.

Dollar power means you can buy more assets, goods, and services throughout Latin America with fewer dollars, particularly if you negotiate directly with U.S. cash.  This makes it an overall good time to travel, visit, and live in a Latin country of your choice with the “greenback” in your pocket.

Latin America Dollar Power II Aerial View of Buenos Aires, Argentina Wikitravel.org Author Jesus Presley

Aerial View of Buenos Aires, Argentina Wikitravel.org Author Jesus Presley

Some Latin countries have better exchange rates than others. Argentine and Venezuela “black markets” are currently at the top of the list for making the most of your Dollar.

Argentines and Venezuelans continue to hoard and trade Dollars even though it’s illegal to do so.  The U.S. currency “black market” continues to flourish.  Other Latin countries are not immune to this either.

The crackdown on trading the Dollar has been serious in Argentina and Venezuela. But lately, for example, the government has relaxed some its regulation because of the continued economic decline.

Latin America Dollar Power Plaza Venezuela, Caracas Guillermo Ramos Flamerich Wikimedia Commons

Plaza Venezuela, Caracas Guillermo Ramos Flamerich Wikimedia Commons

For instance, in Venezuela the auto and housing industry are businesses that are quietly switching to Dollars to complete the transaction with de facto government approval.

The Dollar will continue to fair better against other Latin currencies including the Brazilian Real and the Mexican Peso.  The strong Dollar is having a detrimental effect upon most emerging economies now, including LA.

What does this mean to you?

Exchanging your U.S. Dollars may give you a significant higher value above the official exchange rate in most Latin countries.   If you’re paying cash for a transaction, you may have more purchasing power across the board than you can imagine.

Here are three power points for travelers and expats with cash Dollars and Dollar dominated incomes:

  1. Currency Exchange Power:  Your U.S. Dollars will you a significant higher value above the official exchange rate in certain Latin countries.  Here’s a blog article that shows how you may take advantage of this phenomena in Argentina.
  2. Asset Price Power:  Although Ecuador, El Salvador, and Panama use the U.S. Dollar as their currency, you can still buy more with the Dollar than in the U.S.A.  Now the Dollar is the de facto currency in both Argentina and Venezuela.
  3. Price Negotiating Power:  Using Dollars to directly purchase an asset, product, or service can increase your price negotiating power.  The ultimate result is the ability to buy more goods and services for less.  Folks with Dollar assets and/or income have a distinct purchasing advantage.

Latin America Dollar Power continues today.  So now is a good time to travel to a Latin American country of your choice and “experiment” using the purchasing power of your Dollars.  You might find a great place to live or visit and use those Dollars to improve the quality of your life.

 

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