VANCOUVER ( Bullions Bull Canada) -- Business news readers are not only continually bombarded with various "indices" having new ones inflicted upon us. The purpose of these contrived numbers is obvious.
Any economic index is "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 the food value of the raw material that went into them, the same is true (in economic terms) with these indices.
I thus offer readers a refreshing change: an economic index that actually means something.
Presenting the "McDonald's Economic Index," or MEI.
The premise behind the index is simple. With
now 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, McDonald's sales now provide a useful snapshot of overall global economic health.
Note that unlike regular food consumption, purchases at McDonald's 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 MEI useful is 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./Canada market, the nearly saturated European market and MCD's operations elsewhere.
something 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.