My former employer, The Economist, once the ever tolerant editor of my flabby, disjointed, and juvenile prose (Thanks Peter and Marjorie), has released its new ?Big Mac? index of international currency valuations.
Although initially launched as a joke three decades ago, I have followed it religiously and found it an amazingly accurate predictor of future economic success.
The index counts the cost of McDonald?s (MCD) premium sandwich around the world.
I can personal confirm the top end of the index in Switzerland at $6.59 for a Big Mac. This is the price of the sandwich only, not of the full meal including cholesterol loaded French fries and a sugar and caffeine laden drink.
In Basel, Zermatt, and Geneva I dashed into shops to check prices, but didn?t buy anything. The staff there must have thought I was ?MAD,? while my traveling companions were deeply annoyed.
In fact, my doctors banned me from this heart attack on a plate years ago.
The bottom end of the Index can be found in Malaysia, where the median annual salary of only $4,500 can justify a price no higher than $1.99. There is also a cultural preference for chicken products in this Islamic country.
What are the Index's conclusions today?
The Swiss franc (FXF), the Norwegian krone, the Swedish krona, and, and the Euro (FXE) are overvalued, while the Hong Kong dollar, the Chinese Yuan (CYB), and the Thai Baht are cheap.
The US dollar (UUP) is now at the highish end of the range.
I couldn?t agree more with many of these conclusions. It?s as if the august weekly publication was tapping The Diary of the Mad Hedge Fund Trader for ideas.
I only learned last week that McDonald?s is removing high fructose corn syrup from its hamburgers. I never knew it was in there!
Still, it points to the company?s determination to move forward with healthier alternatives, as is the rest of the entire food industry.
That may partially explain the outsized performance of the shares over the past year, up 40.52%.
I am no longer the frequent consumer of Big Macs that I once was, as at my advanced age, my metabolism has slowed to such an extent that in eating one, I might as well tape it to my ass.
Price rises also haven?t helped. When my mom took her seven kids to the Golden Arches during the 1950?s, the hamburgers were ten cents apiece.
Better to use it as an economic forecasting tool than a speedy lunch.
