Here’s another table I don’t know what to make of: The Economist’s Big Mac index
Based on the theory of purchasing-power parity, under which exchange rates should adjust to equalise the cost of a basket of goods and services, wherever it is bought around the world.
In the present case, the "basket" is — literally — the Big Mac.
The cheapest burger in our chart is in China, where it costs $1.30, compared with an average American price of $3.15. The Economist claims this implies that the yuan is 59% undervalued.
If that’s the case, then any subsequent de-pegging of the Yuan to the Dollar could have devastating consequences for the greenback.
I do not trade currencies, but I find this to be a real head scratcher.
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.