Tuesday, 24 February 2015

Inflation In Theory Is Only Understood When We See It In Reality.

A bar of Lindt Chocolate.

Flitting through my Twitter feed yesterday, I happened to see that I that a bar of Lindt chocolate cost R 40,99. The R standing for Rand, the South African currency.

It's been almost four years that we have been in Austria and when I thought about this some more, I remembered that when we left, a bar of Lindt was more or less R20. Ouch indeed, that is a 100 % increase in price...

Of course Lindt is a luxury item and not everyone eats it. Yet, it sends a loud signal and I would love to know whether local salaries have also increased along with it. I am not naive, never would it increase 100 % but maybe 50 %?

Now for the extremely interesting part:

Looking at the prices of a bar of Lindt chocolate here in Austria, I found that they fluctuate between Euro 1,59 to Euro 1.89.

The exchange rate of Euro to Rand is about 13 and that makes a bar of Lindt chocolate ( if you were to buy it in Rand ) cost form R21 to R25.

Rather amazing that it seems to cost almost as much to ship it overseas, taking into account that the price of a bar here in Austria does include the supermarket's mark-up!

Now that the price of crude oil has almost halved and for some time too, it might be interesting to find out whether the price at the pump has dropped accordingly?

Often the world of finance and economy is overpopulated with words only understood by a select few. If the veil of mystery where to be dropped from what, let's face it is a simple buyer and seller concept, more of us would understand and maybe not accept everything placed in front of us.

I tend to believe that the world of finance is changing...that incessant greed permeating it, is being dismantled one brick at a time. Instead of watching a soap opera in the afternoon, try watching any of the business channels.

You'll know when a brick is being dismantled, by how upset the various presenters get....at the moment, the fees earned for recommending a pension plan in the USA being one of the bricks in question!