“Laos sounds crazy with only 3 ATMs. There are 3 ATMs within 3 minutes of my house driving. There’s an ATM at 7-11 which is 5 minutes walking. I don’t know how I would survive in a completely foreign country with no ATMs. I wouldn’t want to have cash because I’d be afraid of losing it or getting it stolen by some locals. Without an ATM though it seems like you have no choice.” –excerpt of email from my good friend Anthony Salazar

Now in Vietnam, where the it’s over 16,000 dong to the dollar, I figured it’d be a good time to write a post about currency. I’ve lost count, but we’ve used around 20 different currencies so far on this trip and besides getting really good at dividing any number by multiples of 3, 4, and 10, going through so many currencies has had a few other effects on us.

1. Instead of converting prices into dollars, we usually convert local prices into the last country we were in. In Nepal we converted to Indian rupees to see if we were getting a fair price. Same for Thailand. Then we converted kip to baht, riel to kip, then back to baht before converting ringgit to baht, rupiah to ringgit, and now dong to rupiah. The other day, I asked a street vendor how much for a baguette, to which she replied, “2,000 dong.” I thought, “Okay, we usually paid 500 riel a baguette in Cambodia and 500 riel equals…carry the one….2000 dong.” I bought the baguette. I realized that I do these split-second currency conversions all the time without even thinking about them. Slowly, we’ve gotten a feel for how much things should be in USD though. Local beer 50-75 cents, imported beer 1 dollar, soft drink 25 cents, internet 25-75 cents/hour, DVDs 80 cents to a dollar, fruit ask Joylani.

2. To Salazar’s point, besides having trouble finding ATMs in Lao and Cambodia, high exchange rates really create some maddening problems. Firstly, the numbers start getting confusing when FX rates get into the thousands. But worse is that the bills start coming in really big denominations. My wallet is filled with 100,000 and 500,000 dong bills at the moment. But since sky-high currency rates are usually indicative of past high inflation, there are lots of small bills around too. So my pockets are filled with 500, 1000, and 2000 dong notes, roughly 3, 6, and 12 cents, respectively. So what happens is that you just accumulate huge wads of worthless small bills. The other problem with this is that ATM’s can only physically handle so many bills at a time. So ATM’s usually have a max withdrawal, usually 2 million dong here in Vietnam. If you want more, you’ll have to make another transaction and eat another ATM fee. Its not so bad here, but in Lao where the largest bills were even less valuable, the max withdrawal at the few ATMs was equal to 70 USD (although you could do up to like 10 withdrawals a day). And lastly, since the even the large bills here in Vietnam aren’t worth very much, finding empty ATMs is also a problem. So in review: confusing numbers, big pockets full of small bills, and insufficient ATMs.

3. Constantly checking and watching FX rates has really shown me how the dollar is just getting destroyed. The Fed and Treasuries actions over the past few years have really sacrificed the dollar in the name of growth and now the effects are becoming clear, albeit even more exaggerated because of the sub-prime crisis. Although we left the US a month before the sub-prime crisis began, we’re feeling its painful effects more than the average American, since we’re abroad. While Americans’ salaries and savings have decreased between 10 and 20 percent in the past year, relative to the world, at least they still live in a dollar denominated world. But we on the other hand, feel the effects of the dollars depreciation more immediately because we’re spending in rupees, riel, and ringgit to name a few. If the economics and forex math are too much, perhaps these charts illustrate my point more clearly.

Each of the below charts is a two-year graph of the dollar’s value relative to the respective currency. The red dots indicate our entry and exit dates in each country.

US Dollar against Indian Rupee

US Dollar against Malaysian Ringgit

US Dollar against Singapore Dollar

US Dollar against Thai Baht