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.
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?
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
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 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.
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.
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.
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.
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:
- 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.
- 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.
- 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.