The Future of RTW trips..

I wouldn't blame the problems so much on people living beyond their means as on the government distorting the market. Yes, someone who takes a mortgage that exceeds their ability to pay is responsible, but the government is also responsible for putting interest rates (which they have no business regulating anyway) below the inflation rate, effectively incentivizing this spending binge with fiat currency.

I read today that the current unemployment rate is %6.7.

When I use the word "depression" I mean a shrinking economy. Down by %10 in two consecutive quarters is what I would call a catastrophe-- that's an astounding amount. (Especially since the common definition of a recession is two quarters of declining growth.) That definition of recession is probably great for people who never want to admit we're in one!

Grad school after my rtw just keeps looking nicer and nicer...

If there is one thing that every traveler I have met has agreed on its that the prices given in the guide books, Lonely Planet specifically, are crap especially for how much rooms cost. What are your thoughts on if this downturn will bring down the rates for budget travelers at hostels and so on?

To me the biggest decider would be does it actually reduce the number of budget travelers. Those doing it on credit will find that harder to come buy same for those who made money in the housing market. But what about people getting out of university who can't find jobs and decide to go away for a bit? In some of the small towns it definitely feels like there are some set prices that all of the hostels have agreed upon, but if they start getting fewer people coming someone will break away.

Anybody see and of this yet?

And of course, the depression gets deeper, the Obama administration is running $2T+ on the books debt, with probably closer to $3T in real new debt. To put this in perspective, at the end of the Bush term the total outstanding amount of US currency was $10T. Meaning $3T in new debt equals %30 inflation -- in one year.

This is on top of the close to %20 inflation from Bush in his last year.

This is exactly Zimbabwe style inflation, though it hasn't gotten as bad as Zimbabwe--- but the past and current administrations are following the Zimbabwe plan exactly--- just keep spending to try and solve the inflation problem, the irony completely lost on them.

Of course, people like Stoo (and Obama and Bush) will have an endless stream of excuses and denigrations to hurl at those who point out that the real world doesn't work the way their self serving economic fantasies would like to pretend.

And everyone else suffers.

Just because hyperinflation hasn't happened doesn't mean it won't.

What's the definition of hyperinflation? A doubling of prices every three years?

But inflation in the vein of Zimbabwe is a doomsday case that would require a massive devaluation of the dollar, and a massive weakening of the U.S. economy, on a scale much, much larger than what we're seeing now.

In short, the world would have to completely distrust the U.S.' future earning power — a scenario that I, personally, don't see happening to the magnitude that would be required. It is after all the largest... yada yada yada.

We'll see devaluation and we'll see inflation — probably double-digit inflation like in the 70s or 80s. But will we see Zimbabwe? In my opinion, it's not likely.

Regardless, it's always a good idea to look at hedges against inflation — real estate, commodities, et al — that hold their value well in an inflationary scenario.

But inflation is a way's off — still dealing with deflation here!

I have a slightly different theory on why RTW trips as we know it will become less accessible in the future. The gap between the undeveloped world and the developed world is narrowing. Economies in Asia, South America, and the Middle East are catching up to the US and Europe. The positive implication is that the global inequities prevalent in our world today might lessen. Frankly, I think it is for the better. There is certain unfairness in the way the world is today. A hard working genius born in a poor country will still likely end up much poorer than a lazy idiot born to a first world country. No one ever said that the world had to be fair, but wouldn’t it be nice if it was just a bit more so?

As the worlds economies improve, costs will go up. Old salty travelers often recount of how things were cheaper several decades ago. Imagine a world decades from now where every country was as expensive to travel in as the US or Europe. If the cost of the average RTW trip went from $60 dollars a day to $120 dollars a day, many fewer people would be able to afford it.

I dunno. I mean I'm in Europe right now and yes, it's not the $5 a day mecca it was in the previous generation's day, but the hostels still fill up with long-term travelers. So not as many people will travel sure, but it'll just take more time to save up!

LizaW wrote:Of course, people like Stoo (and Obama and Bush) will have an endless stream of excuses and denigrations to hurl at those who point out that the real world doesn't work the way their self serving economic fantasies would like to pretend.

Little miss sunshine lives in a glass house. Insults? Yes, I mocked your posts. More to the point, I questioned you logic, linked to information and posted graphs that contradicted your rant...and your hurled the ol' insults as fast as you could type them into your iPod Touch while traveling in London...and continue on months later.

It was only six months ago when you were talking up Palladium (then down 66% in less than a year) and Gold (still 20% volatility inside a year). "Self serving"? Spare me. Are you not singularly invested in your precious metals? Do you not preach a one-size-fits-all investment strategy? (Your precious metals, again.)

The term 'hypocrite' comes to mind.

I have consistently qualified my advice in this thread as useful for the short/medium turn savings of a soon to be departing world traveler. Full stop. For you to take it any farther is disingenuous.

I have also consistently (in this thread and others) been a long term dollar skeptic, a point which you consistently ignore.

You should at least give me credit for goading you into posting links to support your arguments. (See, even I can add quality to your life. ) Speaking of your arguments:

And of course, the depression gets deeper, the Obama administration is running $2T+ on the books debt, with probably closer to $3T in real new debt. To put this in perspective, at the end of the Bush term the total outstanding amount of US currency was $10T. Meaning $3T in new debt equals %30 inflation -- in one year.

That is a very bizarre definition of inflation. Care to back that up with a link? It just does not work that way. While Government debt and inflation are indirectly linked, they are defendant upon a hole host of other factors and are not nearly as 1:1 as you insinuate. If what you say were true, then then inverse would be true: a government with 1T in the bank, and 10T in 'outstanding' currency would suffer from deflation. Bizarre.


(lisaw & her precious)

Over the past 2 years the situation has been playing out as I predicted, palladium has doubled in price, and gold has more than doubled. Even when pressured the administration won't cut spending, and the economy is continuing to weaken, only its being overshadowed by europe which is circling the bowl faster.

One of the hallmarks of a science is being able to make accurate predictions. Economics is a science. The crap that stoo and krugman and all the other partisan hacks spew is politically based and thus, useless for predictions.

From what I saw on my recent trip, travel is NOT down, hostels are near full, some days there is no room at the inn. However the travelers are Europeans, Australians, Asians & a modest amount of Canadians.

On the other hand, American backpackers are as scarce as hen's teeth, not trying to analyze anything, just saying!

LizaW wrote:One of the hallmarks of a science is being able to make accurate predictions. Economics is a science.

Economics as a science that makes accurate predictions...oh boy. Might as well flip a coin.

Eppyboy wrote:i actually think because of the world's economy, travel will become even cheaper than ever before...think about it, markets go down, cities start to feel the pressure, and a good way to get money back in to the cities is by travelers and tourists...I mean I just found a great flight to Europe during the holiday season through new years...was it cheaper 5 years ago, probably, but still was a great price, budget airlines are popping up all the time and even if they go under there are plenty always coming along and when they start out their prices are dirt low to undercut the rest...hostels are still cheap, food is generally still affordable in most places throughout the world...and for americans, canadians and australians traveling, their respective currencies are picking up ground on the Euro and pound, I know the USD certainly is...SEA, Africa, and parts of south america, eastern europe are still cheap...you can still get great all-inclusive vacations to the carribean, cruises are still very affordable, shall i keep going?

I wrote this two years ago...I was pretty close...the AUD and CAD have definitely become stronger currencies, hostels are still cheap, food prices in most countries are relatively cheap outside of Europe, however, airline prices have soared...probably more than doubled since I wrote this two years ago for long haul flights, especially to europe...and the USD has dropped quite a bit against Euro, Swiss Franc, AUD, NZD, SGD, FJD etc...not bad on my part...

busman7 wrote:From what I saw on my recent trip, travel is NOT down, hostels are near full, some days there is no room at the inn. However the travelers are Europeans, Australians, Asians & a modest amount of Canadians.

On the other hand, American backpackers are as scarce as hen's teeth, not trying to analyze anything, just saying!

*waves at busman7*

No really, one thing that really stood out on my last extended jaunt through China/Nepal was how many more Americans there were traveling there than my last time in Asia- it might be Americans are more interested in that part of Asia than Thailand etc, but we really weren't at all uncommon! I've noticed a lot of the long-term travelers were young people who, like me, did study abroad and fell in love with travel, and that's only been common in the USA for the past few years or so (Europe has always been booked up with Americans and doesn't count, I'm talking more off the beaten path places). Definitely an upsurge in that regard, and I expect there to be more Americans now that study abroad is getting so popular in college.

I also think travel is still doing just fine from what I've seen in the past year, every place is full and I don't think the fact that I'm encountering Chinese travelers more and more will hurt business!

As a final note, I always like it when this thread gets bumped as it always reminds me if we really knew what was going to happen economically we'd all have a lot more money.

Guess I should have clarified the my last trip was nearly 3 months in Cambodia with 2 months in Phnom Penh.

Also my neighbor that operates a hostel here n El Salvador commented on how few Americans he had this past summer & that for the first time Canadian visitors outnumbered Americans. This seems significant as the American population is roughly 10 times that of Canada.

Had a lady from Spain spend nearly 3 months at my GH.

Curious indeed- two years ago as an American I was definitely a rarity in SE Asia, so perhaps for whatever reason we just don't go there? There are definitely always places that some countries prefer over others- Americans are definitely a majority in European hostels, and it felt like every other person in Argentina was an Israeli for example.

Can't guess the stuff underlying El Salvador, as I'm perhaps the only American who's never been to Central America.