Written by Jeff Nielson Thursday, 29 November 2012 14:14
Business news readers are not only continually bombarded with various “indices” concocted by the Corporate Media, but we are regularly having new ones inflicted upon us. The purpose of these contrived numbers is obvious.
Any/every economic index is (supposedly) “derived from” economic fundamentals, while hiding the raw data from us upon which the index is based. This makes these indices wonderful propaganda tools. Much like many forms of “processed food” strip-out most/all of the food-value of the raw material which went into them, the same is true (in economic terms) with these indices.
I thus offer readers a refreshing change: an economic index which actually means something. Presenting the “McDonalds Economic Index.” The premise behind the index is simple. With McDonalds now being firmly established across the (decaying) economies of the West, and rapidly becoming established in the (dynamic) “emerging economies” of much of the Rest of the World; McDonalds sales now provide a useful snapshot of overall global economic health.
Note that unlike regular food consumption, purchases at McDonalds are discretionary. They will rise when the economy is robust, and sag as the economy slows. The one weakness in this “index” is that like all other retail sales data (and most economic data in general) it does not strip-out inflation from its sales numbers, so we will have to make that adjustment ourselves.
What also makes the McDonalds Economic Index useful (for all Western-centric readers) is that it reports its sales with a clear Western perspective. Sales are broken down into three regions: the U.S. (5% of the world’s population); Europe (5% of the world’s population); and APMEA (“Asia/Pacific, Middle East, Africa”) – i.e. the Rest of the World.
Of course such a classification makes sense from a corporate perspective. It separates its divisions into the already-saturated U.S. market (which presumably includes Canada); the nearly-saturated European market; and McDonalds’ still-growing, Rest-of-the-World operations.
In October, McDonalds reported something which it had not done for nine years: a drop in overall global sales. However, not only was there an overall decline, but there were large declines in all three regions. Sales fell 2.2% (month-over-month) in the U.S. and Europe, and 2.4% in the APMEA region.
As noted previously, this is a drop in sales revenues, and thus does not factor-in soaring inflation. As I’ve mentioned in several recent commentaries, as recently as the month of July the World Bank was reporting global food-inflation increasing by 10% in one month alone.
As a low-margin food producer, McDonalds is forced to pass along that inflation to its customers in the form of higher prices. While I doubt very much that McDonalds has hit its customers with any sort of across-the-board 10% increase in menu prices in October, clearly food-inflation would have forced prices higher by at least a couple percentage points on average – effectively doubling the (real) size of this one-month plunge.
Written by Jeff Nielson Monday, 26 November 2012 14:21
Every year it’s the same “song and dance” from the U.S. propaganda machine. Right after the “Black Friday” post-Thanksgiving shopping-orgy in the U.S.; the numbers will be twisted to supposedly show that the U.S. retail sector is strong-and-healthy. That’s immediately followed by a rousing chorus of “happy days are here again.”
Then, once the dust settles after the holiday shopping season (and few of the Sheep are paying attention), it will quietly announce another disastrous year for U.S. retailers. What is so pathetic about this sham is that not only does this song-and-dance never change, but it’s all based upon the same transparent lie.
That lie concerns inflation. All “inflation” is produced by the money-printing of bankers. Indeed the term itself originated as short-hand for “inflating the money supply”; which is precisely what all money-printing does. However, that topic has been covered previously for interested readers.
Where inflation closely relates to retail sales is that any/all retail sales statistics are only relevant if inflation is totally stripped-out of any calculation. Reporting that consumers paid higher prices for goods tells us absolutely nothing about the health of U.S. retailers – which is the raison d’etre for this statistic.
Instead, the propaganda machine does precisely the opposite. Not only does it refuse to subtract inflation out of its “retail sales” calculation; but it refuses to even acknowledge its perversion of this statistic when it reports its data.
Here it’s important to note to readers that when I use the term “inflation” that I’m referring to actual inflation in the real world, and not the hyper-absurd U.S. “consumer price index.” One could write an entire book about how the U.S. government has systematically severed all ties between this statistic and the real world, however a single anecdote will suffice.
In the same month (this summer) that the World Bank was reporting global food prices soaring at an annualized rate of 120%, and Asian governments were meeting to discuss “the global food-price crisis”; the U.S. government proclaimed that inflation in the U.S. was (literally) 0%.
Zero percent inflation in the U.S.; 120% inflation in “the world.” You do the math.
Here another important point must be made. More than ever food-price inflation is “inflation.” Obviously for the billions of people around the world living in poverty and near-poverty, that reality has always been totally apparent. However, for the first time since the Great Depression that Truth has migrated to the West.
One in six Americans must now subsist on government “food stamps” in order to feed themselves properly(?). Tens of millions of other Americans struggle barely above that threshold. This is the inevitable result of the more-than-50% decline in wages for the Average American over the past 40 years, or (in other words) a greater-than-50% decline in their standard of living. Food-inflation is inflation.
By any conservative measurement, inflation across the West now rages somewhere between 10 – 20%. Here even the eminent John Williams of Shadowstats.com is guilty of failing to fully factor-in this reality in his own calculation of the (real) U.S. inflation rate. Mr. Williams only assigns food prices an ordinary weighting in his own inflation calculation, when (as I just explained) food-inflation must now be over-weighted in any inflation calculation.