I Chronicles 29:11 "Thine, O LORD, is the greatness, and the power, and the glory, and the victory, and the majesty:for all that is in the heaven and in the earth is thine; thine is the kingdom, O LORD, and thou art exalted as head above all."

Friday, November 23, 2007

A Lesson In Eh?conomics

So, let’s begin our lesson, shall we? I know it’s long, but I think it best to read this post with an open mind, and remember that I am not perfect, but I do understand this whole economic thing better now that I am living and dealing with it. If you have not faced exchanging currency (even in Canada) then I recommend you not scoff at what I say until you do your research and see that I am right. Then there will be no reason for scoffing, now will there? Of course not.

Every country’s currency fluctuates in value. It is a normal thing, and depends on trade, inflation, and other things that Alan Greenspan knows and I don’t need to. So I won’t get into all that. Mmm’kay?

The current exchange rate for the South African Rand (ZAR) as compared to the US Dollar (USD) is 6.7 ZAR to 1 USD. Not bad, you may say. Well, while I agree, I would also say that a few short weeks ago the rate was 7.2 ZAR to 1 USD.

What does that mean?

Let me ‘splain. We pay 22 ZAR for 4.5 liters of milk. (Which comes straight from the dairy and is not pasturized, and is wonderful by the way.) When the exchange rate is 7.2 ZAR to 1 USD, the milk costs $3.06 USD. When the exchange rate lowers to 6.7 ZAR, then the price of milk in USD is $3.28, a $.22 raise in price just from the fluctuation of the dollar’s value. The price in ZAR has not changed, but the value of the dollar has.

Let’s put it on a bigger scale. Let’s say you are in SA and you need to buy a car. The exchange rate is 6.5 ZAR to 1 USD. So, if you want to buy a car that costs 63,100 ZAR it will cost you $9707 USD. If the exchange rate were 7.2 the car would cost $8763 USD. Does that make a difference? You bet! Almost $1,000 difference!

When you are an American in the US and spending US money, the exchange rate is never talked about. It doesn’t matter. Just like when you are a South African, and you live in SA and spend ZAR, the exchange rate doesn’t matter to you. It’s only when you leave your native country does it affect you.

Missionaries who are living and working in Europe have been the hardest hit from the fluctuation of the dollar. When the European Union got the bright idea to unify their currency and make the Euro, then all American missionaries in Europe automatically lost about half of their support. Not because churches were unfaithful, or because they were dropped, but because the value of the Euro immediately was about twice that of the US Dollar. Even now the exchange rate of the Dollar to the Euro is: 1 USD= .68 Euro. That means for every dollar you exchange for Euros, you only get .68 cents back.

Which also means that missionaries in Europe who were paying $800USD/month in rent for their house had their payment increase to about $1600USD/month when they changed over to the Euro. Think that would make a difference in your budget if that happened to you?

And it’s not just rent, but automatically the price of gas, food, furniture, medicine, clothing, shoes, cleaning supplies, insurance, everything increases in price as the value of the dollar dips. Which means the missionary’s budget is tightened in every aspect. God forbid we should be forced to eat chicken feet to save money!! :0)

Here in SA, the exchange rate is not bad. We are still able to afford rent, food etc. But if the value of the Dollar were to drop as low as 5 ZAR to 1 USD, then we would be in a bad way.

I guess what I’m saying is that I would ask you to pray that missionaries would be wise in their financial dealings, and that God would bless their efforts. That He would help them to see how to get the most out of their money, and to learn to wait on the exchange rate. It doesn’t stay low forever.

Here in SA it tends to be higher in the middle of the month, and then taper off toward the end. So any major purchases should be made in the early to middle part of the month. When you’ve been overseas a while you get to learn the market a little. (Or when you have missionary friends that clue you in.)

So, I hope this has helped you gain a vision of what missionaries experience on the field relating to the exchange rate. I know there are many countries I didn’t touch on. Britain is one of them. So let’s chat a bit about that. The exchange rate for the Pound to the Dollar is worse than the Euro. I think the exchange rate is .48 Pound= 1 USD. So, pray for my friends the Clarks who are in London ministering to people who don’t even want to hear about the Gospel.

And pray for the Pitchers in Czech Republic who deal with the Euro, and the ever-changing policies regarding shopping bags. ;0) Pray for our other missionaries in Europe who are facing the same financial challenges because of the exchange rate.

If you have something to say, by all means say it! Leave a comment. I would love to know your thoughts. If you can explain things better than me, (or I, whatever) have at it!! That’s the purpose of this whole thing anyway, to enlighten the masses. :0) Are you enlightened?


  • Dave

    Spot on. I just posted on this exact issue myself.

    I am going to Germany next month, and have had to deal with the Euro when it first came out. The value of the dollar has dropped 59% since I was there last (2002).

    I bought train tickets online and got a good Euro price, but when the charge hit the credit card, I was shocked!


  • Megan (FriedOkra)

    I'm no math whiz but even to me that sounds awful. I'm sorry to hear it. Thanks for the education!

  • Wendymom

    It's amazing the things we don't even think about at home when you all are over there working so hard!~

    I'm sorry to hear about it-and I think this post should be required reading for everyone who is a non-missionary Christian!

    I know you guys will be fine-- you've always been so good with your money-- but, I will keep praying for you about it! Good thing you got your car when you did...

    Miss you something fierce! Especially at holiday time... by the way, did you guys celebrate Thanksgiving this year? And if so, what did you do about a turkey?!?

    Love ya sister---Me

  • Anonymous

    Good job! I feel enlightened :)

  • Anonymous

    You did a wonderful job putting value and every day life into the difficult conversation of the devaluing of the US Dollar. Only takes 40 days on the mission field to get a HUGE education in international finance!

    We're feeling the devaluation of the dollar and have experienced God's answers to prayers so that we're making it each month. Creative grocery shopping to feed 7 for such a small amount of local currency - but God has been faithful and we're rejoicing!

    I've been good about bringing bags to avoid any opportunity to sin in the grocery line! ha!

    Keep up the good work. YOu're learning and adjusting and doing everything you're supposed to be doing these first weeks on the mission field.

    Andrea Pitcher

  • Brenda

    Wow, this was all news to me. I never even thought about such a thing.
    I am, indeed, enlightened. And I know more what to pray about now.

    Hope you are doing well!

  • Michelle

    yeah, that's crazy.
    What amazes me though is that you have it all graphed out of when and how it fluctuates . . . wow.
    We have the up and down peso, but nothing like that.
    Oh,and by the way, I have a 5 rand coin in my purse right now, don't know how it got there, but I'll pray for you each time I see it, deal?

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