http://www.brw.com.au/p/sections/eco/what_beer_tells_us_about_the_euro_UDqMvzkSKhJ0YSeBicuUKO Via Business Insider comes a nifty graphic that highlights one of the big challenges policy makers face in dealing with Europe's seemingly intractable debt crisis. Using the Federal Reserve Bank of St Louis' FRED economic research website, BI has pulled out the numbers on beer prices in the euro zone to show a staggering divergence between Germany (black line), Spain (red), Italy (orange) and Greece (blue). Explaining how the graphic works, BI's Joe Weisenthal writes, "What basically happened over the past several years is: Prices of everything surged in the periphery of Europe, while staying incredibly stable in Germany. This has been a boon to Corporate Deutschland, as it is far more competitiveon a price basisthan all of its peers. "Now the peripheral countries are being asked to devalue and regain competitiveness, but it is a difficult if not impossible task." As the chart's green line shows, Ireland has made great strides in regaining competitiveness, which is reflected in the broad view that the country is mounting a recovery from its economic woes, even if it's not completely out of the woods.
Comparing the price of beer in Germany and Greece? Well. Can someone do the same chart for Ouzo? Interesting, though. I'm not an economy expert, but isn't this the "inflation" for a bunch of countries that are trapped in the same currency?
Yes you are correct.... I was just explaining this to someone yesterday how printing more and more bailout deals causes inflation to rise.... So a bottle of water that used to cost 7Euro will rise accordingly as the currency devalues as a result of printing more of them. Some people seem to think the solution of just printing more currency is a win win but it is not at all and is actually contradictory and causes deflation.... And I hate expensive beer....It should be free lol!
Sorry, my wording was probably not correct here: I meant that for the Euro, an "inflation" would mean that the prices raise everywhere equally. So this difference in the price is not a "real" inflation ... somehow :/ There is simply no currency that can really be devalued compared to another inside the Euro zone. But locally, for greece, the effect is the same as that of an inflation, of course.
