Exchange Rate

[Alex C]

The value of the Euro has dropped from $1.35 in May, 2014 to $.88 today in 2016, almost a fifty cent drop per Euro. Correct me if I'm wrong but that means that a thousand USD used buy 740 Euros in 2014 but now buys 1136 Euros, all rough figures. That's almost a 50% increase in the value of the dollar.

Why hasn't there been a reduction in US prices from European manufacturers to reflect this strength in the dollar? We all saw the prices rise as the Euro got stronger, why no reduction as the Euro gets weaker? A new 186 for almost $10,000 is approaching ridiculous. No wonder third world horns are making such inroads.

BTW, the Yen is up strongly, reflected in the price of Yamaha Instruments. Even if the instruments are not made in Japan it makes partial sense.

[bort]

I'm used to thinking of the conversion rate in the other direction... but I still get your point. Interesting question, and I don't know the answer.

Question -- Is it to the point where buying a new horn and having it shipped from Germany is cheaper than buying it in the US? I think there would have to be a cheaper alternative than buying it in the US for them to reduce prices significantly.

Otherwise, if times are tough in Europe, then why shouldn't they try to soak us and make their profits here? It's our fault for buying them, if we don't like the prices. I wish there were more and better American-made tubas, so there was really an alternative to this.

[Three Valves]

If you are getting hosed, then the "conversion rate" is working perfectly.

[gionvil]

As of today, 1000$ buys "only" 903 Euros .. There is a sensible difference with the exchange rate of 2014 but nothing like the 50%!!

[Donn]

I'd be interested to know where one can get that .88:1 number - I'm getting 1.11:1, one euro is $1.11. If there's a convenient way to buy euros for $0.88 and sell them for $1.11, I'm in.

[bort]

I'd be interested to know where one can get that .88:1 number - I'm getting 1.11:1, one euro is $1.11. If there's a convenient way to buy euros for $0.88 and sell them for $1.11, I'm in.

Yeah, there's a problem with the direction of the conversion and the order of the units.

To be clear: 1 euro is still worth more than 1 USD, and 1 euro has not ye It's just not worth as much more as it used to be.

Something that costs 1000 Euro used to cost about $1,500 USD.
Something that costs 1000 Euro now would cost about $1,110 USD.

So why are the US prices still $1,500 and not $1,110? Maybe it's as simple as this... the price, in Euro has increased accordingly. So if that 1000 Euro object now costs about 1350 Euro, then that would be $1,500 USD. Maybe it has nothing to do at all with the dealer, but something the Europeans do to regulate their taxes for export items so they can keep the US prices the same?

Again... if we're dumb enough to pay it, why change it?

[TheGoyWonder]

Well, you can hit up Ebay.de and try to score some deals with the strong currency. You might have to send a lot of messages to sketchy Polish dudes asking for shipping, and then resist all their attempts to deal outside of Ebay.

And you will have to count on the bell getting damaged and needing to complain to the seller, which is really easy on Ebay.

[gionvil]

As a european producer ( not of musical instruments..BTW) I can say that in our case we are selling in Euro, no matter where we dispatch our goods, because our material and labour costs are, of course, in Euros. So we might take advantage of the increased strenght of the US$ for now, and we can be more competitive and sell more. It's probably just the US importers, dealers or retailers that do not change the sale price in US $ to protect themselves from eventual sudden changes in the rates, or simply to make a bit more money.

[bort]

gionvil...

Thanks for the insight.

Also, I just Googled your location -- what a beautiful town! Maybe I should spend my USD on tourism, not tubas!

[bisontuba]

The value of the Euro has dropped from $1.35 in May, 2014 to $.88 today in 2016, almost a fifty cent drop per Euro. Correct me if I'm wrong but that means that a thousand USD used buy 740 Euros in 2014 but now buys 1136 Euros, all rough figures. That's almost a 50% increase in the value of the dollar.

Why hasn't there been a reduction in US prices from European manufacturers to reflect this strength in the dollar? We all saw the prices rise as the Euro got stronger, why no reduction as the Euro gets weaker? A new 186 for almost $10,000 is approaching ridiculous. No wonder third world horns are making such inroads.

BTW, the Yen is up strongly, reflected in the price of Yamaha Instruments. Even if the instruments are not made in Japan it makes partial sense.

I get just a whisker under $1.11 Dollars to $1 Euro as of today. But your point is right on and one that I have thought about for a while......
Mark

[gionvil]

gionvil...

Thanks for the insight.

Also, I just Googled your location -- what a beautiful town! Maybe I should spend my USD on tourism, not tubas!

Thank you! Yes, A good espresso coffee here is still 1 Euro a cup / 1,11 $

[Donn]

I bet that espresso is more likely to taste good, too.

How's the tuba playing action, should we bring our tubas when we emigrate? I think you've mentioned a chronic shortage in community bands. Are there folk/popular ensembles where a tuba would fit in?

[happyroman]

Back in the day, Rex Martin was a sales rep for Rudolf Meinl. The exchange rate was so favorable, he at one time had in his studio two complete sets of tubas; 3/4 CC, 4/4 CC, 5/4 CC and F, one set of each in yellow brass and gold brass.

[Alex C]

I'd be interested to know where one can get that .88:1 number - I'm getting 1.11:1, one euro is $1.11. If there's a convenient way to buy euros for $0.88 and sell them for $1.11, I'm in.

I was using earlier research when the euro was lower and I did say it was rough estimates and ask for correction. However, even taking in today's close at 1.07 that's a 20% decrease from two years ago. I think it's legitimate to ask why prices haven't slackened some.

[Wes Krygsman]

Could also be that current inventory was purchased at the previous high prices, and the new lower prices could be on the next turnover.

[Rick Oakes]

I suspect that the European sellers see no reason why their prices should be influenced by the exchange rate and that considering the small market in the USA the only way for prices to go is up.

[bisontuba]

healthcare and education!

cellphones and foodstamps!

and if you weren't godless cretins I'd suggest "pie in the sky"

this ↑



(psst: If prices are higher than consumers are willing to pay, consumers will not pay them.)

The first axiom is called the reflexive axiom or the reflexive property. It states that any quantity is equal to itself.

As usual...WRONG

[bort]

Mark, are you suggesting the reflexive axiom of geometry is wrong? Tsk, tsk...

[bisontuba]

Mark, are you suggesting the reflexive axiom of geometry is wrong? Tsk, tsk...

No. He is insisting that consumers will pay prices higher than they are willing to pay...because that's just what he does.

(You'll see... He's posting his clarification from his 0bamaphone right now.)

Well, exCruz me...

[Donn]

He might be thinking that prices don't necessarily simply rise and fall according to what people are willing to pay. You can see plenty of examples of this any time you want to look. Check ebay - see a shined-up Conn 21J or two that look awful familiar? There's stuff that's been there long enough to retire, and we can see from this that prices are higher than consumers are willing to pay. Yet, some day, a new consumer may come along and see no problem with paying that much.

So "if prices are higher than consumers are willing to pay, consumers will not pay them", is like saying "if the water isn't high enough, it won't spill over the levee." It doesn't mean you can look at the river and tell whether the levee was adequate.

I seem to remember previous examples of tuba inventory priced according to the exchange rate in effect when acquired, as opposed to re-priced on some regular schedule to follow current exchange rates. I didn't get DP's point as to how this would relate to cellular phones, food stamps, education etc., but I always like a "pie in the sky" reference. Didn't guess he'd be a Wobbly. "Work and pray, live on hay, you'll get pie in the sky when you die." (To the tune of "Sweet By-and-By.")