Perspective: What Stability Looks Like to Bernanke

>> Tuesday, August 9, 2011

After yesterday's 635 point sell off the DOW is up over 400 today. The question now remains... can Washington agree to disagree and do what's right for the country and the people it purports to represent? Or will it be more of the same and a worsening economy?

The way the DOW see-sawed today, it could have been a lot worse. In some places it is.

Here's a little perspective:


Date: August 9, 2011
Reporting From: Vilnius, Lithuania


Just a quick thought on a ridiculously volatile day:

One of the things that people pick up on very quickly as they travel are how different price levels are around the world. I've been to roughly 100 countries, and I still find it amazing how much variance there is among things like food, property, and entertainment prices.

There are certain places-- Cambodia, Ecuador, Tanzania-- that are so jaw-droppingly cheap that it almost seems unreal. And you wonder how these people could possibly ever survive if they came to your country.

Well, the United States has just joined this proud cadre of banana republics... at least if you're from Switzerland.

You see, the Swiss franc is one of the few currencies that have given investors some sense of comfort recently; Switzerland inspires confidence and stability, and the worse things get in the United States and Europe, the more investors pull their money out of the dollar and euro, and park it in the Swiss franc.

It's all about supply and demand. Increased demand for the Swiss franc coupled with expanded supply of dollars and euros has caused the franc to surge over the last weeks and months. It wasn't too long ago that it would take 1.20 francs to buy a US dollar. Now it takes $1.40 to buy a single franc.

I can think of a lot of words to describe the performance of the US dollar: Farce, Joke, Lunacy, Embarrassment, Disgusting. But it's more clearly summed up like this: the price of a Big Mac in Zurich is now so high (at $17.19) that a minimum wage employee in Minneapolis, Minnesota, would have to work for nearly 4-hours in order to afford it.

This is what stability looks like to Ben Bernanke.


Until tomorrow,





Simon Black
Senior Editor, SovereignMan.com

4 comments:

Jim August 9, 2011 at 10:55 PM  

Actually according to the Big Mac index a Big Max costs $8.56 in Switzerland. The author should actually do some research instead of pulling numbers out of his butt. His math isn't so good either. Minimum wage in Minnesota is $7.25, so even at the incorrect $17.19 price, that's less than 3 hours after taxes. Do any of these people have editors anymore?

Let's go to Hong Kong. Big Mac costs $1.90 there.

ELAshley August 10, 2011 at 11:38 AM  

ACTUALLY... the price of a Big Mac "value" meal (medium size) is 12.70 Swiss francs.

If you had bothered to realize that the price is in francs then you might have thought to convert the price to dollars, which I did, for a grand total of 17.4762 U.S. dollars.

If we're talking just the sandwich, which will knock you back 6.50 francs, then we’re looking at $8.94 American.

I'm not saying your Big Mac index is wrong; it's more likely out of date (July 10, 2010 to be exact). I think the McDonalds Corporation knows how much a Big Mac costs in EVERY country they're sold.

So... the author did NOT pull numbers "out of his butt," he got it right (or near enough, unless you want to quibble over pennies). You however, not only did you pull your numbers out of your butt, but they were old numbers at that.

As to your other quibble, the 'cost-per-hourly-wage' thing, everyone makes mistakes-- Barack, me, you, and even Mr. Black. The point, however, is not the accuracy of his estimation of the number of hours of work it takes for a minimum-waged Minnesotan to enjoy a Big Mac Value Meal in Switzerland. The point is the Swiss Franc is worth more than the U.S. dollar.

As of 9:51 this morning, one Swiss Franc will get you $1.38 American. One Euro will get you $1.42 American, but the Euro is in trouble too. The franc is far more stable. But even at that, the franc requires European stability. If a Swiss traveler wanted to spend 2,000 U.S. dollars during his Florida vacation he only needs to spend 1453.0 Swiss francs. On the other hand, a U.S. vacationer to Switzerland wanting to spend 2,000 dollars will only get 1453 francs.

As for prices in Hong Kong, the official McDonalds website says a Happy Meal $15 U.S. (“and up”) .

...For a HAPPY Meal.

The Big Mac Value Meal, in Hong Kong is $20 U.S. Dollars. A McDouble and a McChicken Sandwich will set you back $8 a piece.

You're so anxious to blow anything posted here out of the water that you too end up making mistakes... imagine that.

BZ August 12, 2011 at 4:11 PM  

I'd like a Royale With Cheese.

-Pulp Fiction

BZ

Post a Comment

Your First Amendment right to free speech is a privilege and comes with a measure of responsibility. You have the right to exercise that responsibility here but we reserve the right to inform you when you've used that right irresponsibly.

We are benevolent dictators in this regard. Enjoy.

Barry Obama : The Young Turk


Young Turk:
Date: 1908
Function: noun
Etymology: Young Turks, a 20th century revolutionary party in Turkey
:an insurgent or a member of an insurgent group especially in a political party : radical; broadly
:one advocating changes within a usually established group.





Photos: 1980 Taken by, Lisa Jack / M+B Gallery

Labels

"House Negro" "No One Messes with Joe" "O" "The One" 08-Election 1984 2009 Inaugural 2012 Election 9/11 abortion abortionists Air Obama Al Franken Al Gore Al-Qaeda American Youth Americarcare Assassination Scenario Atheism Barry O Bi-Partisanship Biden Billary Birth Certificate Border Security Bush Bush Legacy Change Change-NOT child-killers Christians Christmas Civilian Defense Force Clinton Code Pink Congress Conservatism Constitution Creation Darwin Del McCoury Democrat Hypocrisy Democrats Dick Morris Dr. Tiller Dubya Earth Day Elian Gonzalez Ends Justify Means Evil Evolution Evolution-Devolution Failure in Chief Fairness Doctrine Feodork Foreign Relations Free Speech Frogs Fuck America - Obama Has Gates George Orwell Gestapo Global Cooling Global Idiots Global Warmong God GOP Descent Graphic Design Great American Tea Party Gun-Control Guns hackers Harry Reid hate haters Heath Care Heretic Hillary Howard Dean Hussein ident in History identity theft Illegal Immigration Iraq Jackboots Jesus Jihadist-Lover Jimmy Carter Joe Biden Jon Stewart Kanye West Karl Rove Katrina Las Vegas Left-Wing Media Leftists Liar Liberal Media liberal tactics Liberals Liberty Lying Media Marriage Penalty Martyr Marxism McCain Media MSNBC/Obama Administration murderers Norm Coleman Obama Obama 2012 Obama Administration Obama Dicatorship Obama Lies Obama Wars Obama's Army Obamacare Obamists Olympia Snowe Partisanship perversion Piracy Police State Political Hell Political Left Populist Rage Pragmatist Prayer Proof of Citizenship Proposition 8 Racism Regime Change Revolution Ronald Reagan Rush Limbaugh Second Amendment Separation of Powers Slavery Socialist Government Tea-Bagging Tea-Parties terrorists The Raw Deal Thuggery Tom Tancredo Traitors War Criminal War on Weather War-Crimes Worst President in History

  © Blogger template Werd by Ourblogtemplates.com 2009

Back to TOP