We were living in Ireland when the euro was introduced.
In January 1999, 11 member states of the EU, including Ireland, agreed to sign on to use the euro as their currency.
Until that time, we and everyone else in Ireland had been using punts. We all had a window of opportunity to exchange or deposit our punt cash for euro cash at a bank, 1 punt for 1.27 euros.
I wondered how drug dealers would cope.
Indeed, this transition from punts to euro likely helped expand the Celtic Tiger property bubble. Drug dealers, off-the-books bookies, terrorists, and under-their-mattress savers were sitting on piles of cash, as those folks usually are. They couldn’t take their hundreds of thousands of punts to a bank without good explanations for how they’d gained them.
To avoid potentially awkward conversations, they bought real estate instead.
Meantime, Lief and I were earning our income in U.S. dollars. We watched with appreciation as the new EU currency, introduced at 1.16 to the dollar, fell steadily over the coming two-plus years, bottoming out at 85 euro cents to the dollar. Our Irish country lifestyle and our Waterford, Ireland, euro-expense business seemed like bargains.
Of course, what goes down comes up…
By the time we moved from Waterford to Paris in July 2004, the euro stood at 1.23 to the dollar, its strongest position since its conception. It wasn’t nearly as much fun under those circumstances to be earning an income in dollars while paying rent and staff in euro.
We bid au revoir to euro-land in 2008, when the EU currency was flying high. By this time we were living in Paris and happy to trade euro expenses for dollar ones in Panama.
Our Paris apartment, which we held on to, we rented out to earn euro income.
Since our departure from the City of Light, the euro has moved up and down… up and down. We hadn’t paid much attention…
Until now.
The past three months, the euro has grabbed us by our shirt collars and demanded we pay it heed as it has fallen, fallen, fallen steadily downward to reach parity with the dollar.
Ah, ha! Takes us back to those happy times when post-punt pints came so cheap. And inspires us to seize the currency opportunity and refocus on interests in euro country.
Lief and I continue to spend part of each year in Paris. We’ll be returning Dec. 1 in time for the holidays with our kids and granddaughter. What fun to enjoy Christmas delights for what will feel like a discounted rate.
In addition, we’ve just closed on an agriculture investment in Spain.
What else would we like to own that’s trading in euro, we’re asking ourselves. One of my answers to that question is an old house in Ireland… to replace Lahardan House, which we sold and now sorely miss. We’re launching a search.
We aren’t the only ones noticing the opportunity. Roving Correspondents Paul and Vicki Terhorst, who have spent the better part of the past half-dozen years in Asia, are on their way to Europe, too, for an extended adventure.
Other friends have written to say they’re shopping for property in Spain, Portugal, and elsewhere across euro-land.
As one put it, “Europe may be facing challenges, but, at the end of the day, Europe is still Europe. It’s impossible to get that level of variety, culture, and stimulus anywhere else in the world.”
When we were preparing for the move from Paris to Panama City, Lief created budgets to compare our relative cost of living, one city to the other. What he predicted, years ago, was that our life in Panama City would cost more or less what our life in Paris had been costing us.
He was right. In Panama City, we run our air conditioners around the clock, we own two cars, we eat out often, and we buy a lot of imported foods at the grocery store. All those things add up to a monthly nut on par with our total monthly budget living in Paris… back when the euro was trading at a buck-and-a-half.
In Paris we have lower utility costs. We trade the expense of two cars for the cost of two monthly Metro passes. We spend less on groceries, because we buy mostly local French goods.
Layer on top of all this the seriously down euro, and not only Paris but all euroland is looking like an irresistible bargain.
Kathleen Peddicord
Founding Publisher, Overseas Opportunity Letter
