Sunday, January 28, 2007

Of Dollars and Pounds and 16 Ounces of Water

My body and my clock do not correlate at present. My body tells me it is 9:25 PM January 28. My clock indicates otherwise, that it is 3:25 AM January 29. Presently, my body prevails. So, I am awake and writing this note. And to what do my late night thoughts turn? Economics.

Economic news back home has routinely called attention to how "weak" the American dollar is to the euro but especially the British pound sterling. After my meal last evening, GMT, or earlier on Sunday morning, US Central time, I have been thinking about economic perspective. As it appears to me, the US dollar is not "weak" in relation to the British pound sterling. Rather, the British pound sterling is excessive in relation to the US dollar. What do I mean? Let me illustrate the matter with 16 oz. of water.

When I ordered my Roast Sirloin of Beef at Ye Olde Six Bells pub, I had in mind that I would save some money. Instead of ordering a soda, as I characteristically would do with a meal, I ordered a glass of ice water. I thought that was simple enough, but alas, I should have remembered from previous visits to the UK that such an order here is not as simple as back home. Culture change! I was instantly faced with a decision. "Sparkling or still?" inquired the pub cashier. Quickly processing the query, I realized that "still" must mean either tap water or spring bottled water. I responded, "Still." The pub cashier, now bar tender, twisted the top off a fancy blue bottle, not chilled, and poured it into a glass half filled with ice.

I proceeded to my selected table, located in the fireplace room, to enjoy my bottled but "still" water. Oops! Then, upon looking at the menu, I learned that my 16 ounce glass of beginning-to-chill still water was costing me £2.95. Having no conversation partner and having already read everything within reach, including the entire menu, my mind began to process the matter of the water. Three things promptly presented themselves to me.

First, in the States, when one asks for ice water, one does not ordinarily have to pay for it as a distinct menu item. The water is drawn from the tap. Second, flowing from this (pun intended), one is not restricted to one glass of ice water. Water and ice are replenished as frequently as one asks, and at no additional expense.

Third, however, is the major economic issue that I want to address. One US $ back home regularly buys 16 oz. of chilled water either from a vending machine or at a kiosk. Consider, then how expensive it would be to purchase 16 oz. of water for
£2.95. Imagine buying water at nearly $6.00 for 16 oz. Yet that is precisely what I did earlier today. Ouch! Now consider this. If 16 oz. of water cost £2.95, then 1 gallon (128 oz) of water, at this rate, would cost £23.60. Convert this amount to US dollars, and what would 1 gallon (128 oz.) of water cost at this rate? It would be approximately $47.20. Would anyone, except in dire straits, purchase one gallon of water for $47.20? I would not. Yet, I did purchase 1/8 of a gallon of water for $6.00. This was not even "penny wise and pound foolish." It was simply foolish, no matter how one views the matter. (Note to self: No more "still" water from fancy blue bottles.)

So, is the US dollar weak against the British pound sterling? I suppose that it is. But is it not really a matter of perspective? It seems to me that the British pound sterling is staggeringly excessive in relation to the US dollar.

In a global economy, one has to be prepared for such things as my water expense crisis. I realize that the South of England has suffered drought which surely increases water costs. Thus, it is understandable that a pub may not serve tap water as freely as we do in the US. All things considered, though, the British pound sterling is excessively costly. Why should the British pound sterling be the standard by which the US dollar is judged "weak"? Why do we not, instead, point to the US dollar as the standard by which we assess the British pound sterling or the euro? It is rather evident that the US dollar has much greater purchasing power in the US than the British pound sterling has in the UK.

Update: When I spoke of my experience concerning the pricey water with my hostess, Carmel, this morning, she cracked, "Go on beer! It will be cheaper. You can get a pint for a
£1.50." I inquired of Carmel how to order water in a British pub. She said, "Be sure to ask for chilled tap water. You should not have to pay for tap water, even if chilled." Good news! I had to laugh, though, when Carmel said, "Go on beer!" She is Irish. She knows something about beer. Whether I will take Carmel's advice, I will leave you to wonder.