From time to time, The Economist runs a chart of the Big Mac Index. It may be the only market index named after a hamburger!
They use it to illustrate purchasing power parity, the idea that the same item should cost about the same amount in every currency. The graphic is below:
Source: The Economist
One of the stunning things, to me, was that despite an absolute pummeling of the Euro lately, the Big Mac is still more expensive in Euros! Despite the weakness we’ve seen already, maybe there is more to go. It’s cheapest to clog your arteries in China and Russia, which is a potential argument that the yuan is still too low.
Source: Fox News
I have to admit I’m actually a little hungry after writing this post! Next time I suppose I should leave out the picture of the burger.