British Pound

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Is the British Pound a “shadow of it’s former self?”  Possibly, if you take the Big Mac Index as an indication.  In reality, that actually depend on the goals of the central banks.  Sure, the Pound went from 18% overvalued to 4% undervalued in a matter of 5 years, but is an undervalued currency necessarily a bad thing?  China has been systematically devaluing their currency, the Yuan, for years in order to increase exports (see the comparison between the Big Mac Index 2007 and the Big Mac Index 2012).

 

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July 2007 to July 2012 Big Mac Index Comparison

August 22, 2012
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The last 5 years have been 5 very tumultuous years and the Big Mac Index shows some of the effects of the economic carnage.  The British Pound, which 5 years ago was 18% overvalued (according to the Big Mac Index 2007), is now 4% undervalued (see 2012 Big Mac Index).  Remember though, that having a currency that […]

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How well did your currency weather the storm?

August 13, 2012
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Between the Big Mac Index 2007 to the Big Mac Index 2012, Venezuela is WAY up ….. 83%.  The British Pound is way down. Big Mac Index prices indicate how well your country has weather the financial storm since 2008. From The Braiser: “Measuring the Big Mac’s value against its cost back in July 2007, […]

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