This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The McDonald's Economic Index

As noted previously, this is a drop in sales revenue, 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, McDonald's is forced to pass along that inflation to its customers in the form of higher prices. While I doubt very much that McDonald's 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 -- effectively doubling the (real) size of this one-month plunge.

With the U.S. propaganda machine blaming every form of U.S. economic weakness on Hurricane Sandy, let me repeat that these are October numbers, and thus cannot be blamed on the hurricane, which struck at the end of the month.

As a discretionary form of (relatively) low-cost consumption McDonald's sales also make a reasonably good proxy for GDP. With that in mind we can now take a closer look at these numbers to see what else can be gleaned.

The obvious question is what are we to make of the fact that sales in McDonalds' only "growth market" (with growing economies) declined by an even greater amount than sales in its established, dying markets? What we see is a crystal-clear illustration of how money printing by global central banks (and primarily Western central banks) is destroying the global economy.

"Inflating the money supply" is the actual, original definition of inflation, and all price inflation (what we now simplistically label "inflation") is directly derived from that money printing . Inflation destroys both wealth and incomes since the currencies in which our wealth/incomes are denominated are being relentlessly driven to zero via the hideous euphemism "competitive devaluation."

We see this banker-produced inflation not only decimating the crippled, debt-bloated economies of the West but it has now reached such a rapacious rate that it is causing the healthier, dynamic economies of the rest of the world to sag as well.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
FB $79.19 0.00%
GOOG $532.11 0.00%
TSLA $250.80 0.00%
YHOO $42.94 0.00%

Markets

DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
NASDAQ 5,070.0260 -27.95 -0.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs