Wednesday, April 6, 2011

Worried About Inflation? Skip Europe and Stay Home This Summer

Over the course of two weeks in August 1967, TBBW (The Beautiful Brilliant Wife) and I visited the capitals or leading city in Greece, Italy, Austria, Switzerland, France, Belgium, Netherlands, and Denmark.  Our average daily expenditure was $22, which covered hotels (all en suite bathroom), meals, entertainment, and local travel (including to and from each airport).  The CPI Inflation Calculator puts the 2009 value of $22 at $141.31, an increase of 642%.  (Using 2009 data permits easy comparison with German Marks, French Francs, Swiss Francs, Austrian Schillings, Belgian Francs, and Danish Kroner, based on conversion values into Euros for eurozone countries from 1999).

How far will $141.31 go in Europe this summer?  Not very far.  (European currencies have appreciated against the dollar in 2010 and early 2011, further reducing dollar purchasing power.)  Maybe dinner for two with house wine at a decent restaurant.  Slum accommodation.  Plan on lots of walking, public transportation, and search out free museums.

What happened to King Dollar?  Between 1967 and 2009, the German Mark (followed by equivalent euros) appreciated 65%, Swiss Franc 75%, Austrian Schilling 62%, Belgian Franc 42%, Danish Kroner 23%, and Norwegian Kroner 12% against the greenback.

The dollar doesn’t buy what it used to buy overseas, at least in places one might want to travel on vacation this summer.  So stock up on charcoal and spend days and nights watching the travel channel.  (Thanks to all Members of Congress and the Federal Reserve Board for encouraging us to stay home by debasing our money.)

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