Bitcoin Forum

Hi, all. Some of you may have heard about the Big Mac Index. It is a system of comparing various economies and currencies, based on a McDonalds Big Mac. Basically, because a Big Mac is a standardised item, with links to agriculture, labour, manufacturing, and distribution, the price of a Big Mac is useful for comparing the value of things. Check it out here (http://www.thebigmacindex.com/)

For example, AUD$1.00 buys 0.23 Big Macs, which is worth USD$0.825. This is interesting, because AUD$1.00 = USD$0.95 at http://www.xe.com/ucc -- which suggests that the Aussie dollar should come down, or the US dollar should come up. Based on this, I predict the Aussie dollar will continue to fall as the mining/resources/China boom here cools down.

What I'd really like to know is the BTC value of a Big Mac!

Not to mention the housing crash that is almost certain to hit Australia because of this. You should follow this guy and listen to every word he says:
http://globaleconomicanalysis.blogspot.com/

His latest post talks about the US housing bubble part 2, but he's been saying Australia is overdue for a correction for the last 6 months.

The Big Mac index is cool, but BTC is too linked to currencies besides itself to have a meaningful index value.

Lol,
My country is not on the list but I checked the price on their website.
A Bigmac is 9.5 RON , that makes almost 3 usd.

But I think the price also in heavley influenced by how Mcdonalds is seen in that country and the number of customers.
Here , for a lots of people is "cool" to eat at , Mc, and even to bring their children to play and eat at young age.
So , if all your restaurants are full , you can charge more .. no?

I thought the CocaCola index was the new cool one?

That's a good point.  The Romanian Leu, like other fiat currencies, has its issues.  You question the viability of such an index, because of influences outside of the direct cost of production.  That seems perfectly valid, and is probably why I have never taken much interest in them.

I think Big Mac Index or McDonalds Index is not real... just to make some advertising...

For example in Morocco you find nearly the same price than in Spain or France... and of course Morocco is a poor country far away from Europe.

Specifically responding to the Mish blog recommendation, Mike Shedlock openly references the fact that he got his ideas and facts about the Australian housing market from Dr. Steve Keen who writes on the Debt Deflation blog here:

http://www.debtdeflation.com/blogs/ (http://www.debtdeflation.com/blogs/)

They are both great sources of reading material for anyone who is interested in learning more about the current state of economic affairs in the world.

It's an interesting comparison since the Economist originally created the big mac index as a way to compare prices across countries as mentioned above.  http://www.economist.com/content/big-mac-index (http://www.economist.com/content/big-mac-index)

For bitcoin it becomes tricky since bitcoins can be exchanged into any fiat currency but as of now I don't know of any McDonald's that accept btc for payment, which complicates the transaction.  It is certainly something to follow at btc becomes more widely accepted and we can observe if there is any arbitrage opportunities between a big mac in local fiat currency in a given country vs a big mac in btc. 

For example if a big mac sells for $2 in the US but McDonald's also accepts $1.90 worth of btc for a big mac in the US it could mean they value the perceived stability of btc more (purely speculative example)

If MacDonalds accepted Bitcoin they'd price in dollars then convert when you paid, so a BigMac will always cost the same in USD and Bitcoins and Bitcoin is always at PPP parity with USD.

In PPP terms, it's the stablest currency ever.

That would only be true in United States based McDonald's, if McD in Germany accepted BTC they would not price it in USD.  Also if McD's suppliers accepted BTC as well there would be no reason to convert at all.  There are lots of different possibilities.

This +1 1,000 times. Mish is one of the few analysts out there who actually bothers to dig into the numbers, rather than just taking them at face value. I highly recommend his website to anyone looking for a different/contrarian take on economic data and Geo-political wranglings.

Correct, Bitcoin will also have PPP parity with the Euro. How's that for stability?

This is great thank you!

Not sure about a Big Mac but apparently you can get a pint of beer and a veggie buerger(sic) for .37BTC.

http://www.reddit.com/r/Bitcoin/comments/19jkk1/i_just_paid_for_beer_and_hamburger_with_bitcoin/

Sounds a bit expensive to me... What would the Fiat price have been?

The link is from 3-months ago when BTC was between 50-60 USD. Price would have been under $20 which is not bad for a burger and a beer.