Bloomberg See Latvian Sex Industry As Economic Indicator

Signs pointing to an end to the global recession are few. if any, as the latest US labor market figures is yet another slap in the face for the Obama-administration,while the real estate market and the consumers hardly show signs of life. The stock market, who is supposed to reflect the health of the economy seems to be totally lost in space, without any connection to the fundamentals. For the last couple of years, I’ve suggested that maybe  traditional economic theories and methods are outdated, and should be replaced. Well, the news agency Bloomberg have found a unique index which is said to be a much better barometer – the sex industry.

“It can change by the hour, by the day. It tells you very, very quickly what the state of demand is.”

Matthew Lynn

Matthew Lynn from the Bloomberg news agency believes that in hard times, traditional indicators are useless, (and I agree on that one). However,  he suggests alternative benchmarks such as the price of prostitutes. The economist claims the Latvian sex market is the most precise indicator of the health of global trade.

So far it’s been a wild ride for Latvia, once the fastest growing economy in the EU, sliding to the bottom of the list in. just six months.

It has the second highest unemployment rate in Europe (after Spain), and its GDP have dropped almost 20%, comparable to that of America during the Great Depression.

While the country is battling with recession, observers outside Latvia are scanning its shattered economy for some hint of when the global crisis will end.

Matthew Lynn from the Bloomberg agency believes that in hard times, traditional indicators are useless. He suggests alternative benchmarks such as the price of prostitutes.

The economist claims the Latvian sex market is the most precise indicator of the health of global trade.

“It’s very flexible. There’s no barrier for people coming here and the price is very flexible. It can change by the hour, by the day. It tells you very, very quickly what the state of demand is. There’s not much money flowing around the system. There’s not much cash there. And that means the economy is getting into trouble,” Matthew Lynn says.

Matthew Lynn’s main argument is that since the price for sex services has collapsed by about two-thirds since the start of the crisis, the global economy is still in big trouble.

Once the cost of illicit comforts goes up, the world will start recovering, according to Lynn’s theory.

That may be true, and I suppose Bloomberg and Matthew Lynn has done the necessary research to support it.

But some are still skeptical.

“I wouldn’t say that for any economy that will suit, simply because there’re many countries in the world where prostitutes are not legal and businesses are not transparent at all and then you will never get a valid indicator monitoring their prices even if you manage to,” financial analyst Evgeny Nadorshin says.

Russia Today reports that many Latvians are not too keen on their country being portrayed as “the red light district of Europe.”

More on the subject:

Night club closed because of sex party and fire extinguishers

“We are looking forward to recovery” – Latvian president

Desert sex amidst financial storm

Sexual discrimination victim receives compensation – in coins

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