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Local preachers ran him and his Eye Opener newspapers out of Wetaskiwin and, in turn, Strathcona and High River for "expressing contrary opinions, drinking and hootin' and yellin'and generally disturbing' the Gospel". He arrived in Calgary and the paper became The Calgary Eye Opener in 1904 Wednesday, June 06, 2012 ---
Why can an American buy Mexicans but cannot buy Canadians?

Local preachers ran him and his Eye Opener newspapers out of Wetaskiwin and, in turn, Strathcona and High River for "expressing contrary opinions, drinking and hootin' and yellin'and generally disturbing' the Gospel". He arrived in Calgary and the paper became The Calgary Eye Opener in 1904 Wednesday, June 06, 2012 ---
Provincial Exports circa 2012

I drove the last spike on the CPR railroad in 1885. A fellow I fired wrote a book about me, full of vicious lies and insinuations and exaggerations ... trouble is though, it's mainly true Thursday, March 01, 2012 ---
Geologist calls for a debate on science of global warming

Back in 1877, Crowfoot was the leader of the Blackfoot --- the most feared native tribe in western North America. Wednesday, February 22, 2012 ---
DO YOU RECOGNIZE ME

From the Banks of the South Saskatchewan Sunday, February 19, 2012 ---
A Bum's Xmas in Calgary

Local preachers ran him and his Eye Opener newspapers out of Wetaskiwin and, in turn, Strathcona and High River for "expressing contrary opinions, drinking and hootin' and yellin'and generally disturbing' the Gospel". He arrived in Calgary and the paper became The Calgary Eye Opener in 1904 Friday, December 16, 2011 ---
Is global warming caused by human-made CO2?

Back in 1877, Crowfoot was the leader of the Blackfoot --- the most feared native tribe in western North America. Tuesday, December 06, 2011 ---
Is Global Warming caused by Humans? Let's debate the facts!!!.

Back in 1877, Crowfoot was the leader of the Blackfoot --- the most feared native tribe in western North America. Tuesday, November 01, 2011 ---
"The chief value of money lies in the fact that one lives in a world in which it is overestimated."
H. L. Mencken

Lord Strathcona --- I drove the last spike on the CPR railroad in 1885. A fellow I fired wrote a book about me, full of vicious lies and insinuations and exaggerations ... trouble is though, it's mainly true

21-Sep-10

My dear fellow --- any rumours put out of my financial demise are greatly exaggerated ...

So yer not broke then ... do ya' fancy Big Macs?

I love animals and I'm against them being treated like widgets --- I'm here to find out the price of one Big Mac in Canada --- then I'll take the Victoria Clipper over to Seattle and check the price there --- then I'll head down to the stockbrokers ---

A day later up at the Long Bar at the Alberta Hotel

Yesterday ya' saw me down at the Golden Arches on Pandora Avenue in Victoria --- I wasn't there because I like Big Macs ... I was comparing the price of a Big Mac I bought in Victoria to one I was going to buy across the Salish Sea in Seattle --- the one in Victoria cost me $4.99 (before tax) --- I've just got back from Seattle and the cost there is is $3.77 (before tax). That told me that the Canadian dollar was 22 % too high.

Well I'm goin' down to my favorite bank, the CIBC, and buy up on U.S. dollars and next week I'll go down and bank my 22% ill-gotten gain ...

Hold your horses --- we're talking about comparing prices in Seattle and Victoria not the U.S.A. and Canada --- Victoria is a tourist town --- lots of the merchants including Ronald McDonald --- see their business as the business of ripping off tourists and the generally stupid or stupefied --- no unlike you McGonigle, I'm a wily Scot --- I went down to the Mac's store (which isn't related to Ronald Mc at all but is owned by Quebec retailer Couche-Tarde) and bought a copy of the Economist to check out their annual Big Mac Index story. Well it turned out my suspicions about Victoria were right --- Ronny boy was ripping off not only the tourists but also the great unwashed who were hanging around his Pandora Avenue store. The average Big Mac store in Canada only charges $4.17 for a Big Mac versus Victoria's $4.99. Mind you for every dollar the Victoria tourist industry rips off not-so-unsuspecting tourists I bet those sleepy Tourism Victoria Bureaucrats give $5.00 to those wily folks running the cruise ships coming into Victoria.

But I digress --- Every year since 1986, The Economist has compared the prices of the Big Mac Hamburger in different countries all over the EGA (the empire where the sun never sets, the Empire of the Golden Arches - which is bigger than the British Empire ever was). The Economist has put together what they call the Big Mac Index. If a Big Mac sells in a foreign country for more than it does in the USA, then The Economist says that that country's currency is overvalued. If it sells for less, then it's undervalued. In July of this year the Economist found that a hamburger containing exactly the same quantity of cholesterol and trans fats and anything else bad you can think of - that exact self-same hamburger sold on the average in the U.S. for $3.73 but sold in Canada for $4.03US ($4.17 Canadian); sold in Norway for $7.35US!!! but sold in China for only $1.96US!!!

And the Economist said that, taking exchange rates into account --- the Canadian dollar is precisely 8.3487% too high. That is na' too bad though --- three years ago it was precisely 13.3287% too high. But the Big Mac Index tells me a lot more--- the Chinese, as they always are, are cheating --- they're manipulating their currency, the Yuan, down to where it's almost 50% lower than it should be ... so when they sell us phones or lawn chairs or radios or sweaters they beat out the home-grown product because they can sell it 50% lower than what they would sell it for if the Chinese didn't cheat --- it's called "dumping" and it'd be illegal except that the Chinese are dumping through their exchange rate. The Americans have been hounding them but they hold on to whatever cheating they're doing as long as they can. They may back off a little bit but only with lots of kicking and screaming about discrimination. But let's be fair --- the Chinese're not the only ones. Sri Lanka and Ukraine are both cheating by 52%.

What currencies other than Canada's are overvalued.

Well the Norwegian Kroner is overvalued by 97%. But here, I'll show you all of them:

Country
$US price of Big Mac in July 2010
Exchange Rate
% of overvaluation or under (-) valuation
United States
3.7300
1.0000
Argentina
3.4960
4.0046
-64%
Australia
4.0711
1.0685
9%
Brazil
4.9610
1.7557
33%
Britain
3.5787
0.6399
-5%
Canada
4.0341
1.0337 (1 C$ = 0.967398665 $US)
8%
Chile
3.4364
509.250
-8%
China
1.9594
6.7369
-47%
Colombia
4.4167
1856.60
18%
Costa Rica
3.8977
513.120
4%
Czech Republic
3.5688
18.9417
-4%
Denmark
4.9900
5.7114
34%
Egypt
2.2249
5.8429
-40%
Estonia
2.6161
12.2320
-30%
Euro area
4.4097
0.7665
19%
Hong Kong
1.9055
7.7670
-49%
Hungary
3.4143
216.738
-9%
Indonesia
2.5058
9090.91
-33%
Israel
3.9924
3.7321
7%
Japan
3.7251
85.9031
0%
Latvia
2.8115
0.5513
-24%
Lithuania
2.7169
2.6869
-27%
Malaysia
2.2339
3.1559
-40%
Mexico
2.4966
12.8173
-33%
New Zealand
3.6261
1.3789
-3%
Norway
7.3490
6.1233
98%
Pakistan
2.4064
87.2660
-35%
Peru
3.4944
2.8617
-6%
Philippines
2.2978
44.3900
-38%
Poland
2.7182
3.0535
-27%
Russia
2.2313
31.8200
-40%
Saudi Arabia
2.6592
3.7605
-29%
Singapore
3.1652
1.3364
-15%
South Africa
2.5720
7.1929
-31%
South Korea
2.8788
1181.06
-23%
Sri Lanka
1.8165
115.610
-51%
Sweden
6.8400
7.0760
84%
Switzerland
6.4331
1.0104
72%
Taiwan
2.3632
31.7370
-37%
Thailand
2.2403
31.2459
-40%
Turkey
3.9672
1.4998
6%
UAE
2.9940
3.6740
-19%
Ukraine
1.7979
8.0650
-52%
Uruguay
3.7356
21.1480
0%

Lordy Strath --- are you saying that the Big Mac Index can scientifically predict what the dollar will be trading at in the future jest by comparing the price of hamburgers?

The so-called "science" is called "Burgenomics". Burgenomics is is based on a theory of economics called "PPP". PPP doesn't stand for some kind of roadside marijuana test where the kops'll zap you if you don't give a sample --- no PPP means "purchasing-power parity" --- the theory of the learned economists who peddle the PPP is that red-blooded-god-fearing loyal consumers are made from the same mold all the world over and will --- eventually --- pay the same price all over the world for the same product being, in this case, the Big Mac hamburger, cholesterol, trans fats and all. --- In Consumer Heaven, Old Timer from Pincher Creek, you'd pay the same for a Big Mac in Calgary, Alberta, Kingdom of Canada, as would Sam Slick in Shelby, Montana, United States of America --- that's the way it was in the Garden of Eden before the serpent and god got involved. Don't forget it's just a theory no different from David Suzuki's theory that CO2 causes global warming or that a fat cat has nine lives --- a theory's fine but you have to prove it --- What surprises me is that I cannot find anywhere where The Economist magazine has compared all of their statistics over the 22 years since 1986, the year they started using the Big Mac Index --- for instance --- in 1986, did the Big Mac Index predict what the Canadian dollar would trade for in 1987? Why, all a person would have to do would be to sit down with every Economist report since 1986. Well I can't see anyone's done it. A couple of Hungarians, Antonio Fatás and Ilian Mihov compared the cost of living indexes in Australia and England - converted them to U.S. dollars and plotted them from 1975 to 2003. And then plotted out the exchange rates for the Australian dollar and English Pound over those years. I saw a chart there on page 15 of Chapter 18 of Fatás's and Mihov's report that seemed to give some proof to the PPP theory. And my gut tells me that the learned Hungarians are right and that's why I sold the Norwegian Krona (I discovered McGonigle had bought 'em with money borrowed from CIBC at 45% interest).


After all, Ducks, is said an' done --- what does it mean for non-speculating personages like me?

Well, if the Big Mack theory is right --- the Canadian dollar will go down in the long run ...

Yeah Ducks but, as, John Maynard Keynes, one of the clients of one of my clients once said: "In the long run, we're all dead."


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Fast Food Nation: The Dark Side of the All-American Meal

U.S. dollar's fall 'bodes ill for Canada' - John Morrissy

Pressure on China to stop currency war - Michael Carmichael

Loonie flirts with greenback parity - John Morrissy

Who caused the currency wars? - Simon Johnson

The loonacy of parity: How a strong dollar is weakening Canada - Daniel Trefler

You can do worse than a Double Down lunch - Chris Selley

Let slip the dollars of war - Brian Milner

Optimism at G20 for end to currency war - Bill Curry

Big Mac Index - The Economist

The concept of the Big Mac Index - Wikipedia

What goes into a Big Mac? - Wikipedia

Another view of the Big Mac index theory - Matthias Lutz

The Big Mac Index: Applications of Purchasing Power Parity The Big Mac Index - Applications of purchasing power parity - Professor Li Lian Og

Currencies behaving badly: Why conventional practices can fail - Globe and Mail

Quantitative easing is devaluation by another name - Globe and Mail Editorial

Americans bicker as their country falls behind - Mike Boone

Food chains not meeting fat-content claims - Sarah Schmidt

Average BC home price hits record high of $505,178 in 2010 - Vancouver Sun

In exchange for allowing Europe to postpone an economic collapse, China helps itself to some trade r - Doug Saunders
China backmails Europe into colluding in its questionable behaviour

Aug 2008 -The Economist releases the Big Mac Index - Ronald McDonald claims Canadian Dollar 15% too high - I drove the last spike on the CPR railroad in 1885. A fellow I fired wrote a book about me, full of vicious lies and insinuations and exaggerations ... trouble is though, it's mainly true

© 2004 Thomas O. ("Tim") Davis All rights reserved