Looking for a better life? There's an index to help you find it.

The Organization for Economic Co-operation and Development, better known as OECD, has created what they call a 'Better Life Index'. They have put together a great amount of data from member countries, organized it by topics, mixed and stirred the numbers and the result is a simple, 0-10 scale mark for each topic and country. Unsurprisingly, the 'popular students' have come out on top: Sweden, Norway, Switzerland, Canada, the Netherlands, Denmark, Luxembourg, Australia...

Life Satisfaction Index. Credit: OECD Better Life Initiative

Maslow's pyramid. Credit: wikipedia

The Better Life Index is born as a way to measure the progress of a country beyond the limitations GDP growth figures pose, specially for developed countries. Because let's face it, GDP can be booming in China but life is still way more comfortable in a cozy hut on the Swiss Alps. When you reach certain economic status and your needs are covered, GDP growth goes into the background and work-life balance, personal fulfillment, education... take the center stage. It is just another implication of the widely known Maslow's hierarchy of needs. Only when you have covered your basic physiological needs you can start worrying about the upper levels. The most useful feature of the Better Life index is that you can interact with it. So, independently of what Mr Maslow said, you can define the importance each of the eleven available topics have for you, overweighting the most important ones or simply avoiding others. 

Maybe you have kids and education is now far more important than income. Maybe you are retired so your only worries are now safety and health to be able to enjoy life. The possibilities and combinations are endless... But like it or not, what most of the people are now worried about is housing, and this is where the Better Life Index comes short, showing its biggest and more serious flaw. The housing topic takes into account two indicators to calculate its mark: average number of rooms per house and their access to basic facilities (plumbing, electricity and such). Seriously?? We are talking about arguably the 34 most developed and industrialized countries in the world and all you can think about to evaluate housing standards is having a faucet in the bathroom? A lot of better ideas come to mind when thinking about ways to evaluate housing in a country.

The US Dollar not-so-free fall

When talking about international trading and investing everybody has grown accustomed to the same face, the US Dollar. It was at the core of any transaction, it denominated almost all the financial instruments you could think of and it was the shelter everybody looked for when things got ugly (this last one was shared with gold obviously). But this familiar face seems to be aging quickly for a number of reasons and, most importantly, it does not seem to care about it.

This omnipresence of the USD has always been key for the US economy, as it has allowed for the US to issue more and more debt at quite low prices independently of the markets situation. The perceived-risk of the US debt had always been very low (notice the past tense here). The US government of course knew this, and used it on its favor but they have been using the strategy for too long and too hard. As it happens with everything, if you overuse and stress something for long enough, it breaks...

EUR-USD exchange rate. Credit: Yahoo!

 

Going underwater? Learn to swim

With the housing boom and bust of the last years a fairly new phenomenon has been born, I am talking about 'underwater mortgages'. People were blind and naive to think that the housing market will incessantly go up. Banks, mortgage intermediaries, real estate salesmen, governments and even some economists (that is the most unbelievable part) helped uninformed people think this was true and was going to be for ever after. Of course they all had their own interests in making this fallacy last as long as possible, making the mother of all bubbles grow forever. "Buy a house! It pays by itself" Can you already see the problem with this?