Wednesday, July 20, 2022

Big Mac Inflation is 40%

Forty percent, big mac inflation is.
Never use Official numbers. Always use big mac index.

Sounds about right to me. America getting absolutely jacked.

So, UBI. They're going to have to print more money to pay for food stamps. Which will cause inflation. Which means they're going to have to print yet more money to pay for food stamps, which drives folk out of work, which means they need more food stamps, which causes inflation...

I dunno how strong this will be compared to the rest of it, but there's a Weimar hyperinflation pathway there. 

Of course they could always try the price controls thing. That has worked once, ever, right? I'm sure it hasn't failed literally every time it was tried or anything? 

I don't think hyperinflation is imminent. I think you're looking at the next 8-12 years for a nearly guaranteed hyperinflation event though. Time to GTFO unless you have an anti-inflation plan.

Could be as close as next year, but they're quite skilled at kicking the can. More ruin in a nation etc.

Alternatively the government collapses in 2024. Sufficiently unlikely in my opinion, but the opening is there. If the Eccles Building can't even staff itself, you can avoid hyperinflation. Kind of have other problems on your mind at that point, however.


Degwin said...

Where did you get this number from? Statistics from here:
show the Big Mac Index to be at a measly 3% year over year. Surprisingly low since the real rate is at least 20%, I don't know why fast food inflation is so slow.

Also, not sure how much GTFO will help, when most every country has their currency and financial system jacked into America's. They'll suffer just as bad, though I suppose a more homogeneous place might see less violence.

Anti inflation planning is also somewhat hard these days. Traditional view is "commodities", but Silver and Gold prices have remained flat. Some speculate price fixing, who knows. Perhaps commodities with physical use like copper, others?

Alrenous said...

JBPguy said...


Real inflation can be calculated conveniently by looking at total money supply m3.

2020 - 160 trillion
today -220 trillion

220 is 37% MORE than 160. Look how nicely that fits with Al's big mac indexing.

Turns out that when supply of something increases it lowers its value. I mean, economists are shocked. No one could have predicted that.

>I don't think hyperinflation is imminent.
It depends if they think the solution is printing more money. If they do, it's imminent.

Degwin said...

That's 40% over 10 years, or 4% per year, really something more like 3% accounting for the compounding rate of inflation each year. Not that high considering the rampant money printing, and hasn't gone stratospheric recently either. Could be being hidden by taking items off of value menus, but those tend to be loss leaders anyhow.

@JBPguy It really is mind boggling how much money supply that is. Most of it is probably in bank hands, and you'd probably see really high inflation if it got dropped onto the US economy. Think about it, what would happen if the US doubled its gdp by giving out $20 trillion in hand outs for one year. Yet your statistics show its quite doable, and not off from what you normally see. That would line up with the theories of the establishment, that velocity of money is what drives inflation, not money supply. Of course, whether they can limit money velocity forever is another matter.

JBPguy said...

>That would line up with the theories of the establishment, that velocity of money is what drives inflation, not money supply

Conveniently the people who control the money printer advocate this theory.

Cui bono. Always.

JBPGuy said...

Oh, also, if 40% big mac inflation is over 10 years, that just goes to show how much the cost of labour and other services have also been driven down.