Inflation . . . and foreign currencies

Several weeks ago while preparing for our Southeast Asian trip, and then again, two weeks ago, while in Vietnam, I got a good sense of what major inflation looks and feels like.

If you ever plan to buy something while you're in a foreign country, it's always nice to have some idea of whether the price is at least "in the ballpark." So before we took off, I did some research about exchange rates.

You want a "general idea" of what you should be looking for.

At the time, then, I found that, for Singapore, I could make the following General/Mental Conversion:

Singapore:

1 Singapore Dollar = US$0.75 (actual/exact US$ equivalent was 0.77)

13 SGD = $10 ($10.05)

100 SGD = $75 ($77.31)

Thailand:

10 Baht = 33 cents

30 Baht = $1 ($0.99)

100 Baht = $3 ($3.29)

2000 Baht = $65 ($65.78)

Cambodia:

1,000 Riel = 1 quarter; 25 cents

4,000 Riel = $1 ($0.99)

Hong Kong:

1 Hong Kong Dollar = an eighth of a dollar; $0.125 ($0.129)

8 HKD = $1 ($1.03)

10 HKD = $1.30 ($1.29)

77.7 HKD = $10

Vietnam, however, blew me away. I've never had to deal with these kinds of numbers before, not while traveling:

20,000 Dong = $1 ($1.02; $1 = 19,400 VND)

1,000,000 VND = $50 ($51.06)

When your primary currency unit is worth about 1/20,000th of another country's primary currency unit, you can pretty well assume there has been some massive inflation! And having just done a bit of research, I confirmed the fact. According to the Vietnamese Embassy, "the inflation rate [in Vietnam] rose up to a record 774.7% [for at least a short time] in 1986." But according to Index Mundi's Vietnam Inflation rate (consumer prices), throughout the '80s Vietnam experienced high double- and triple-digit inflation:

Year	Inflation, average consumer prices	End-of-Year = 1VND on 1/1/80	Year	Inflation, average consumer prices	End-of-Year = 1VND on 1/1/80	Year	Inflation, average consumer prices	End-of-Year = 1VND on 1/1/80	Year	Inflation, average consumer prices	End-of-Year = 1VND on 1/1/80
1980	25%	1.25	1990	36%	6,298	2000	-1.768%	26,245	2010	8%	54,197
1981	70%	2.13	1991	82%	11,462	2001	-0.31%	26,163
1982	95%	4.14	1992	38%	15,818	2002	4%	27,210
1983	49%	6.17	1993	8%	17,084	2003	3%	28,026
1984	65%	10.19	1994	9%	18,621	2004	8%	30,268
1985	92%	19.56	1995	17%	21,787	2005	8%	32,690
1986	454%	108.36	1996	6%	23,094	2006	8%	35,305
1987	360%	498.46	1997	3%	23,787	2007	8%	38,129
1988	374%	2,363	1998	8%	25,690	2008	23%	46,899
1989	96%	4,631	1999	4%	26,717	2009	7%	50,182

Meanwhile, of course, the U.S. dollar has undergone some significant inflation of its own. I won't reproduce a chart and do the multiplication as I did, above. But you can find the "official" consumer price index on the Federal Reserve of Minneapolis' website (look over to the right). 

During the same period, from 1980 till today, the value of US$1 has been inflated to $2.68. 

Divide VND54,197 by US$2.68 and you should find how much "real" inflation (compared to US inflation) has occured in Vietnam. If the Vietnamese dong had been at parity with the US dollar back in 1980 (so that US$1 = VND1 in 1980), then USD1 should buy VND20,223 worth of goods today--very nearly what US$1 does purchase today (more or less, VND19,400 worth of goods or services).

While I'm on the topic, I should note that dealing with all those zeros can get confusing . . . and difficult!

When we first got into Vietnam, I realized that US dollars would likely be accepted at most places I went, but I wasn't carrying near enough dollars for my needs. (We intended to stay at a hotel one night, and we were looking for Christmas presents [for 2011] for Sonlight employees.) So I needed some dong. But not too much. (What good would they be to me--especially if Vietnam continues to inflate its currency faster than the US inflates its currency?)

Well, I figured I would need at least about US$300 to cover taxi fares for a couple of days, plus, if I wanted to pay in dong, the approximately $50 we were going to owe for our hotel room.

Quick! How much money--in dong--do you want to take out of your bank account back in the US via the ATM in Vietnam? You want enough but not too much. And, of course, if you take out too little, you are likely going to be able to find another ATM to get a bit more.

The ATM offered several standard withdrawal numbers, including a maximum listed withdrawal of VND2,000,000 . . . plus, of course, the option to enter your own value in increments of VND50,000 or 100,000. . . . And every withdrawal would incur a VND20,000 service charge on top.

I decided to go for VND5,000,000.

Didn't work.

Oh, no! Was my card being blocked by my bank back in the US? Did I enter a digit wrong?

Tried again. No success.

Is my total too high? The machine doesn't have enough dong?

I tried VND3,000,000.

No success.

Use the standard maximum?

VND2,000,000.

Success!

Hmmm. But that's only about US$100. It won't get me very far with my taxi driver.

Maybe I should try it again.

Success!

So I finally withdrew VND5,500,000--dispensed in VND100,000 notes. 

I feel so foolish for not having taken any photos of the beautiful (but largely worthless) currency!

********

A few additional stories about money from our trip.

One about standing at an ATM. I think it was in Cambodia, though it might have been in Vietnam.

The taxi brought me to a two-ATM location. 

When I walked up, both machines were being used, and a man was standing to the side at the left one--not behind the person, but kind of in front of and to the left side of the person at the machine.

It appeared obvious to me that he was waiting. But he wasn't "in line."

When "his" machine came free, I motioned for him to do his business. Which he happily did.

Meanwhile, the machine on the right remained occupied.

When that guy finally began to move out of the way, stepping slightly to the right and turning away, I moved toward the spot. But a woman came from behind me on my right and stepped up to the machine!

!!!!

Then she turned slightly to the right to give herself room to rummage in her purse to find her card.

I figured two could play the game of "jumping" in line.

I quickly leapt to her side--now, actually, behind her, on her left--reached across and slid my card into the machine.

She muttered something indecipherable under her breath--I don't have any idea whether it was something to the effect of "Well played!" or, "*&^@%#! foreigner!"--and stepped away.

*******

When on cruises, you meet all kinds of people.

I found myself in conversation with a man from Holland. Somehow, we got into a conversation about money. Maybe it was because I asked him about his family, and he told me his son is working in Indonesia, and his daughter is looking for work in Australia: "There is no future for them in Holland," he said. "Taxes run between 80 and 90 percent. And the Euro has no future."

Then he told me: "Joining the Eurozone was one of the biggest mistakes Holland ever made."

"Why?"

"The guilder was a stable currency.

"Just before the conversion was made in January 2002, 1 guilder [the former Dutch unit of currency] purchased a cup of coffee. When the conversion was made, we received 44 cents Euro for every guilder. So our wealth was immediately reduced by a factor of more than two--we had less than half what we did the day before.

"At the time the conversion was made, a cup of coffee cost 1 Euro--effectively 2.2 times what it cost immediately before the conversion.

"Now, a cup of coffee costs EUR2.50."

Do the math: 2.2*2.5 = 5.5. That's pretty severe inflation--450%--for a period of nine years!

And what did the Dutch people gain for their troubles?

Similar stories could be told by West Germans, too, I'm sure, as they were first called upon to help the East Germans catch up after half a century of Communist rule, and now they are being called upon to bail out and support the "poor" French workers who want to retire with full pensions at 60 rather than 62 (!!!) . . . or the Italians and Portuguese, Greeks and Spanish. . . .

******

Okay. Enough financial stories for one day.

Using mechanical power to the max . . .

Sarita and I spent one day in Cambodia. We ran off the ship as soon as we could when it docked in Sihanoukville. We wanted to get up to Phnom Penh. The 150-mile trip took about four hours each way.

On the way, I was fascinated by the ingenuity--or was it desperation?--of the Cambodian people. It was extremely difficult to get decent photos of the various modes of transportation. We were absolutely "flying" compared to the speed of the (primarily motorcycle-driven) vehicles I was trying to capture. But I got enough for you to get some idea.

Imagine if people here in the United States put their vehicles to even half of the same stress that these vehicles experience in Cambodia every day!

For standard commuting or public transportation:

I think this one took the cake for number passengers. One motorcycle and--what? At least 22 passengers in the trailer, not to mention the driver of the motorcycle. And it appears they are waiting for at least one more to hop on!

For regular, everyday, household transportation:

Younger sister, Daddy, older sister, Mommy, . . . and don't forget Baby in Mommy's lap! Not sure what the canes are--sugar cane? Bamboo?

For commercial enterprise of all kinds:

I think he's ready to outfit a concert somewhere. . . .

Motorcycles, obviously, do yeomen's work. But so do vans.

Some appear as if they are regular commercial vehicles, but, after a while, it seemed to me that most of them must be some form of "extreme taxi" for the locals. Plenty of hard goods hanging out the back, but packed with people on the inside. Sometimes.

I saw this guy and, based on what I had seen before, I realized it was possible the van was filled with people. But . . . Nope. He was filled up with these bags of who-knows what! I wish I had taken some shots of vans that had lost their rear hatches and had them patched on again. Those poor hinges took a lot of abuse!

Finally, I was astonished by this use of a motorcycle.

We were flying down the road and saw these guys obviously dragging something and stirring up a dust storm! What was it? . . . Oh! we figured it out as we flew by. And I got a better shot a few minutes later with another motorcycle dragging a similar burden. . . .

Two strips of wood, maybe 25-feet long. What are they for? Will there be any wood left after they have traveled down the highway dragging them in the dirt and on the pavement going 25 or 30 miles per hour?

But the creative use of vehicles--especially motorcycles without trailers--continued in Vietnam.

For people transportation, of course: Home from school? I took this picture on Saturday, January 22. It must have been determined an auspicious day for weddings, because we saw probably seven wedding celebrations in progress. Considering the fine dresses the women are wearing, I wonder if this family was headed to a wedding?

But also for commercial purposes.

On the outskirts of Saigon. Positive social interaction. Just don't speed up too much so the wind whips me off the back end! How much do 22 cases of Heinecken beer weigh? Saturday evening, we found ourselves on a ferry crossing the Mekong River. A bunch of entrepreneurs were bringing loads of fruit and vegetables back over to the city from the country where we had been. And again, I wondered: How many hundreds of pounds were these motorcycles carrying?

And then, among all the other commercial uses for motorcycles, I thought I would put together a short series that has to do with the transportation of food. Heading toward their final resting place on a cold, cold, wet day!

And then, finally, two thematic series.

1. Trees on motorcyles.

First, just for fun: We saw this guy wheeling down the streets in Ha Long (northern Vietnam), carrying a sizable tree with small pink buds on it:

But his cargo was unique. Far more common were . . . Oh. A bit of background, first. New Years in Vietnam and China is like Christmas in the West. And though we were in Saigon almost three weeks before the New Year celebration was to begin, we could already see signs of its coming. I mean, what would Christmas be without a Christmas tree? And what better way to bring home the Christmas tree but on the back of your motorcycle? Well . . . It might be nice not to make the "little woman" hold it! Or maybe not. I think this guy has a slightly . . . more . . . ummmm . . . "civilized" answer! Here, a guy is obviously bringing home a New Year's/"Christmas" present.

And, for a Grand Finale, . . . ummm . . . shall we call it, "Stupid behavior on a motorcycle"?

--This young woman wasn't the only one I saw doing this. She was merely the only one I was close enough to and riding beside long enough to capture on camera.

No! She's not really texting while riding her motorcycle, is she?!?

Oh! Apparently she is!