I was in Indonesia last week – and had some exotic experiences.
That picture was taken in Bali, where I first met my wife many years ago.
Indonesia is famous for coffee. For example, "Sumatra" is their biggest island – with “Java” coming in close behind (and both are synonymous with coffee).
They also make one of the most expensive coffees in the world … Luwak Coffee.
It is a very particular coffee, created using a very particular process.
In traditional coffee production, the cherries are harvested, and the beans are extracted, before being shipped to a roaster, ground into a pulp, and brewed by a barista at your local Starbucks.
In contrast, with Luwak coffee, something different happens.
The coffee cherries are harvested by wild animals.
Specifically, they’re harvested by the Asian Palm Civet, a small, cat-like animal that absolutely loves the taste of coffee cherries.
But,if the civets eat the cherries, how can they still be used to make coffee?
Here comes the gross part—the civets eat the coffee cherries, but their digestive tract can’t effectively process the beans, only the flesh surrounding them.
When the partially digested, partially fermented beans are eventually excreted, coffee producers harvest them. The beans are then cleaned, roasted, and used to make astonishingly expensive (“with retail prices reaching up to $700 per kilogram”) coffee.
Now is the coffee that mind-blowing to warrant a price north of $300 a pound?
No, not really. In fact, many critics will openly call it bad coffee, or as Tim Carman, food writer for the Washington Post put it, "It tasted just like...Folgers. Stale. Lifeless. Petrified dinosaur droppings steeped in bathtub water. I couldn't finish it."
To be fair, the Luwak coffee industry is an experience. When I toured a plantation near Ubud, Bali, a smiling tour guide greeted and led me on an in-depth exploration of the forested property, where I was allowed to immerse myself in the various spices, roots, beans, and civets used to produce this one-of-a-kind coffee. Here is a video I shot of the process.
This map shows the difference in living costs around the world using figures from the world's largest database of user contributed data about cities and countries worldwide.
The Consumer Price Index, used to determine the difference in the living costs between countries, takes into account the prices of groceries, transportation, restaurants and utilities.
There are many more charts with specific data by region. The chart below shows the places with the highest and lowest costs of living.
The CPI in the infographic is a relative indicator of a country's living costs compared to New York. So, for instance, if a country has a CPI of 70, on average it enjoys 30% cheaper living costs compared to New York.
The Economist's Big Mac index seeks to make exchange-rate theory more digestible. They say, tongue-in-cheek, that it is arguably the world's most accurate financial indicator to be based on a fast-food item.
The Big Mac index is based on the theory of purchasing-power parity (PPP), according to which exchange rates should adjust to equalize the price of a basket of goods and services around the world. For them, the basket is a burger ... a McDonald’s Big Mac.
According to this measure, the most undervalued currency is India's Rupee at about 67% below its PPP rate. In India, a McDonald’s Big Mac costs just 95 Rupees on average, the equivalent of $1.54 at market exchange rates. In America, the same burger averages $4.62.
The interactive graphic, below, shows by how much, in Big Mac PPP terms, selected currencies were over- or undervalued.
The index is supposed to give a guide to the direction in which currencies should, in theory, head in the long run. It is only a rough guide, because its price reflects non-tradable elements such as rent and labor. For that reason, it is probably least rough when comparing countries at roughly the same stage of development. The Economist has added an adjustment option to account for this in the interactive version of the data.
The Economist's Big Mac index seeks to make exchange-rate theory more digestible. They say it is arguably the world's most accurate financial indicator to be based on a fast-food item.
The Big Mac index is based on the theory of purchasing-power parity (PPP), according to which exchange rates should adjust to equalize the price of a basket of goods and services around the world. For them, the basket is a burger ... a McDonald’s Big Mac.
According to this measure, the most undervalued currency is India's Rupee at 67% below its PPP rate. In India, a McDonald’s Big Mac costs just 90 Rupees on average, the equivalent of $1.50 at market exchange rates.
In America, the same burger averages $4.56.
The interactive graphic, below, shows by how much, in Big Mac PPP terms, selected currencies were over- or undervalued.
The index is supposed to give a guide to the direction in which
currencies should, in theory, head in the long run. It is only a rough
guide, because its price reflects non-tradable elements such as rent
and labor. For that reason, it is probably least rough when comparing
countries at roughly the same stage of development.
What bothers you most about someone else is often a clue about what you don't like about your own circumstances ... or, a political cartoonist could point it out instead.
Here are some of the posts that caught my eye. Hope you find something interesting.
The
World's First Vegetarian McDonald's. To capture more of India's $12 billion
fast-food market, the burger chain will jettison meat entirely in favor of the
McAloo Tikki burger and the McSpicy Paneer. (The Week)
Whether you like the Cowboys, or not, one thing we can probably all agree about is that old white dudes shouldn't rap too often. At least that's what my kids tell me when I try it.
The Most Expensive Coffee In The World Is Made From Cat Poop
I was in Indonesia last week – and had some exotic experiences.
That picture was taken in Bali, where I first met my wife many years ago.
Indonesia is famous for coffee. For example, "Sumatra" is their biggest island – with “Java” coming in close behind (and both are synonymous with coffee).
They also make one of the most expensive coffees in the world … Luwak Coffee.
It is a very particular coffee, created using a very particular process.
In traditional coffee production, the cherries are harvested, and the beans are extracted, before being shipped to a roaster, ground into a pulp, and brewed by a barista at your local Starbucks.
In contrast, with Luwak coffee, something different happens.
The coffee cherries are harvested by wild animals.
Specifically, they’re harvested by the Asian Palm Civet, a small, cat-like animal that absolutely loves the taste of coffee cherries.
But, if the civets eat the cherries, how can they still be used to make coffee?
Here comes the gross part—the civets eat the coffee cherries, but their digestive tract can’t effectively process the beans, only the flesh surrounding them.
When the partially digested, partially fermented beans are eventually excreted, coffee producers harvest them. The beans are then cleaned, roasted, and used to make astonishingly expensive (“with retail prices reaching up to $700 per kilogram”) coffee.
Now is the coffee that mind-blowing to warrant a price north of $300 a pound?
No, not really. In fact, many critics will openly call it bad coffee, or as Tim Carman, food writer for the Washington Post put it, "It tasted just like...Folgers. Stale. Lifeless. Petrified dinosaur droppings steeped in bathtub water. I couldn't finish it."
To be fair, the Luwak coffee industry is an experience. When I toured a plantation near Ubud, Bali, a smiling tour guide greeted and led me on an in-depth exploration of the forested property, where I was allowed to immerse myself in the various spices, roots, beans, and civets used to produce this one-of-a-kind coffee. Here is a video I shot of the process.
via YouTube.
If you think about it, I paid a premium to drink exotic cat poop coffee. Kind of strange!
I wouldn't drink coffee made from people poop (or even domestic cat poop).
It’s the story that allows this not so awesome coffee to fetch awesome prices. People are paying for the experience, not the commodity itself.
The same is true when you buy Starbucks. The coffee at 7-Eleven is cheaper – and Consumer Reports tell us that McDonalds coffee is better.
Nonetheless, I'd still rather drink at Starbucks.
We live in an Experience Economy.
Posted at 12:50 PM in Food and Drink, Ideas, Just for Fun, Market Commentary, Science, Travel | Permalink | Comments (1)
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