Monday, October 5, 2009

Burgernomics

Blink:
Yesterday I withdrew 200 Euros from a cash machine in France. Later when I went on line, I learned that equated to a $291 checking account withdrawal not including the service fees. I could only grimace. For years now, as an American, I have been experiencing bad burgernomics in Europe.

Read On:
The Economist magazine coined the word burgernomics back in 1986 when they introduced the Big Mac Index as a semi-humorous method predicting exchange rate movements between two currencies. The concept was to select a product that is readily available around the world to determine its Purchase Price Parity. I will not bore you with the details of the complicated formula, but the American dollar is seriously under valued here in Europe. According to my calculations, 25%. No surprise the Economist later created other global currency measures, the Tall Latte index and the iPod index.

Reflecting on the bad burgernomics I have experienced over the years here in France, I decided to create my own index to justify one of the reasons I keep coming back. It is called the Géant Food index. Géant is France’s leading supermarket chain. A 1.5 liter bottle of Evian is .66 Euros or the equivalent of $.96 for one and a half large bottles in the States. An average baguette is .92 Euros or $1.33 in the States, considerably cheaper than the baguettes at Whole Foods. Candidly, I do not come here to live on bread and water alone. Overall all the food is considerably cheaper than the States – the produce, cheese, fish dripping from the Mediterranean, etc. Let’s not forget the wine. Why is the Géant Food index favorable here? A majority of the food is local, thus I am not paying for the transportation. Remember, the average food travels 1,500 miles from source to plate in the States. So today, not only am I going to eat some great fresh food, I am also going to be environmentally responsible eating a locally sustainable meal with a favorable carbon footprint.

Just paid 5.80 Euros for a Big Mac
Translates to $8.43 at today’s exchange rate
Ate it and had a Big Heart Attack

2 comments:

  1. Are you trying to make us jealous?

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  2. Your commentary on the cost of food in France is exactly the opposite of the US pricing model. Here, fruits and vegetables are NOT subsidized and thus are more expensive (per ounce) than many processed foods. And of course, processed foods are loaded with corn products (sweeteners, gums, etc) which ARE subsidized, so they are very inexpensive. And the local food push is slowly coming, but currently is only really open to those with a car and the time to go to a farmers market on Saturday. Groceries continue to specialize in cheap procesed foods, corn-fed and fattened meat and poultry, and imported (and often inedible) fruits and vegetables. The entire American food chain needs to be re-invented. Frustrating and sad...

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