If you’re curious, check out this article published on CNN Money today. The important facts to know is that Riga, the Latvian capitol city, placed 46 on the list of most costly cities to live in, around the world. That makes it more expensive than Dubai, UAE; Perth, Australia, Toronto, Los Angeles, Houston, Boston and a whole host of other cities.

Even more interesting than it’s ranking this year is that it moved up, not 1 or 2 or even 5 places, but 26 places since last year. The article also mentions that “Latvia’s gross domestic product rose 10.2% in 2007,” but doesn’t mention the 15-20% inflation rate this year. Couple that with the fact that the “U.S. dollar index, which measures the dollar against other global currencies, has fallen 14% over the past 12 months”, and you will begin to understand our sometimes financial struggle to live in this country, and also the struggle that those around us deal with.

So, you can think about it this way… for an American living in Latvia, the exchange rate, Latvian Lats to US Dollars, has gone up 22% in the last 2 years, which means, even if all prices stayed the same in Latvia in the last 2 years (which they haven’t) it would cost 22% more to live here now than it did before. Now, add in Latvian inflation of 15-20% (just this year)… it costs 37 - 42% more for an American to live here today than it did 2 years ago. For a Latvian, it’s still 15-20% more than just last year.