A Venti Americano, Please
Welcome to my random musings about the world, on a weekly-to-occasional basis.
Where we are: We said good-bye to Brasov yesterday, and are spending a few days checking out Sibiu and Sighisoara, because any place with a name like Sighisoara just begs to be explored.
A Venti Americano, Please
Preface: take everything I say about economics with a heaping tablespoon of salt. Lee asked me the other day what I had spent at the chocolate shop. I said, offhandedly, around forty, I think. He asked forty what, American or Romanian? That’s a reasonable question, when it comes to me in a chocolate shop. I’ve been known to buy VERY expensive chocolate. Forty American is $40, obviously. Forty Romanian is about $8. Big difference.
Forty monies, I responded. I can’t for the life of me remember what the currency is called here (people mostly say lei, but our conversion app calls it RON—we see both around town). So now it’s monies.
Anyway—nomenclature confusion aside, I’m not sure what to make of the following—it’s just an observation.
There’s a Starbucks in Brasov; it’s one of the only places that’s open early enough to suit Lee. So every morning for four weeks, he ordered a Venti Americano coffee.
Every day, he paid with the same credit card—it was 14.5 lei. When he went back and looked at the credit card statement, he could track the price of his coffee, over a two-week period. The statement lists the converted price, in dollars.
It started at $3.12. It bottomed out at $2.96. That’s a significant difference.
I started wondering what that means for Starbucks, the corporation. Which also made me wonder who profits from a Starbucks in Brasov? American shareholders? Or some Romanian franchisee? Or both? What happens to that profit when the visiting American buys a coffee on Monday, then buys the same coffee on Tuesday, but pays less for it?
Because I read American news, my head is full of words like ‘supply chain disruptions’ and ‘inflation’ and ‘stagflation’ and ‘interest rate hikes’ and ‘recession.’ Our younger kid (the one who owns a car) keeps complaining about gas prices. I was genuinely surprised when Lee told me the price of his morning coffee had dropped at all, never mind that much, that quickly.
We typically use what Lee calls The Diet Coke Index to think about relative costs (to us) of living in one place versus another. Diet Coke is one item that he buys fairly regularly. It’s brand-specific, all over the world. You can get a Diet Coke (or at the very least, a regular Coke) almost everywhere we’ve been. The product/contents are fairly consistent; any price variation seems (by our layperson’s rough logic) to reflect extremely localized economic differences.
We once bought our eldest kid a seven-dollar Coke in Stockholm. We haven’t been back to Sweden—we’re still too traumatized by the memory of that soda, and it was almost fifteen years ago. I mean, a Coke is a Coke is a Coke, right? Seven dollars is bonkers now, and it was even more bonkers in 2008.
It’s useful to have a broad comparison point—like The Diet Coke Index—because if I start thinking about different currencies and how they intersect with the global economy, local wages and policies, taxes, international markets, plus the fact that we earn in a different currency, my brain starts to melt.
Does a Diet Coke cost us more in Country A, or Country B? That is a question that has a (more or less) tangible answer. I can understand it. Seven dollars is a lot to me. Seventy-two cents (here in Romania) is not a lot to me.
I was thinking about the fact that the dollar is strong right now—as evidenced by the drop in Lee’s Starbucks expenditure—and trying to figure out what that means for the US economy. I got precisely nowhere, because the only thing I could focus on was—maybe we should buy some Euros?
What I came to realize, thinking about these complicated money issues, is that I’m only just beginning to see the faint web that connects all of our economies (apparently it’s made out of spent coffee grounds). I don’t pretend to understand it, and I often lose sight of the individual threads, but The Diet Coke Index (or perhaps now the Venti Americano Index) helps me see that the strands are inextricably, stickily stuck together.
It’s the (global) economy, stupid.
From my writer’s notebook:
A new museum has opened in Rome: Museo dell’Arte Salvata—the museum of rescued art. It’s affiliated with The National Roman Museum, and will have rotating exhibits of art that meet a broad definition of ‘rescued’—things that have been confiscated from looters and thieves, saved from destruction or weather or natural disaster, salvaged from the ocean floor, conserved and restored from centuries of neglect.
I’m always looking for any excuse to go to Rome. So now I have another!
Take care,
Lisa
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