Deacon wrote:When you own a hotel you charge a fee. If you are charging $100/night and the ones in the UK are charging £100/night, then when a Brit travels to the US and the pound is worth 2 dollars, they're delighted that their £100 now buys them TWO nights.
See, I take issue with the assumption that a hotel in the US and a hotel in the UK would cost the same amount of currency. These are different goods, in different locations, despite both being hotels. Hell, I could buy a night at a Super 8 in Colorado, and compare that to a Super 8 in California, and think my dollar goes farther in Colorado (when really, the hotel in Colorado is a fundamentally different good, as location matters). Prices would be different, but they are set based on supply and demand. For instance, it could be that the pound is worth two dollars, but the hotel in the US is not $100/night, but $250/night, so the Brit still would be disappointed his money isn't "going as far".
And inflation would counteract the difference in the exchange, I think. If the pound is worth 2 dollars, and the rest of your example is the same, the Brit would be delighted to be able to afford two nights at the relatively cheaper hotels stateside. But, were the dollar to inflate so the pound was worth 4 dollars, the price of the hotel in the states would not remain constant, but rise. It would rise to, roughly, twice the price. So the Brit turns his £100 into $400, but the hotel in the US costs (roughly) $200 now, so he still only gets two nights. The inflation of the currency did, on net, nothing for the traveler. (If demand also increases, the price will rise even higher, and his money will go less far, even given the favorable exchange rate.)
I suppose, also, that the problem is that I am thinking about this economically (I tend to do that), and not as a tourist or traveler.
Frédéric Bastiat wrote:And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works.
Count Axel Oxenstierna wrote:Dost thou not know, my son, with how little wisdom the world is governed?