Argh! you spoiled brats! Stop complaining and go get a Big Mac
The US is said to be the world's largest consumer of gasoline. As gasoline touched $4.00 a gallon, with the promise of higher prices as we approach the higher demand of Spring and Summer, we hear consumers complain and I wonder why.
Let me give you and example. While we bitch and moan for paying a bit over $1.00/liter in the US, people in Uruguay are paying close to $2.00. Here in Argentina, it is running around $1.75/liter. As a matter of fact, we in the United States pay less for a liter of gas than more than a hundred other countries, including Rwanda, Uganda, Turkey, Zimbabwe, Peru, Bolivia and Paraguay.
Of course, I don't have to tell you bunch of very well educated imported-banana eating monkeys that people in Uruguay don't really have the income of the average american. As a matter of fact, per capita income on a purchasing power parity basis, according to a 2011 IMF report, ranks the US seventh among the nations surveyed. Uruguay ranks 59th, with less than a quarter of the average income of a US citizen. And yet, they pay twice as much for a liter of gas than we do.
When I wasFX, I always followed the Big Mac Index to look at PPP and under or over valuation of currencies. The Economist's Big Mac index tracks purchasing power parity based not on a basket of goods, but on the price of a Big Mac around the world, compared to the US "base" price. Well, you guessed it! Uruguayos pay more for a Big Mac than we do. The latest Big Mac index reflects a ten percent overvaluation of the Uruguayan peso against the US dollar. If you add the cost of gasoline to drive to your local Mac Donalds, those poor uruguayos are really getting stifffed.
I know I'm getting a bit off subject here, but if you like currency Big Mac Index, often called burgernomics by my friends at the Economist, reflects a whopping 62% overvaluation of the SF against the dollar. And last year, the index showed a 21% overvaluation of the Euro against the dollar, which has corrected significantly since then. That, my friends, was a good trade., the latest
Back to gasoline prices. The New York Times reported yesterday that, while angry at rising gas prices, this fact will not really sway US voters in the upcoming election. Apparently, US voters care a lot more about electing a leader "they can trust". Me? Finding a leader I can trust will be harder to swallow than a Big Mac in Uruguay.