There is no end to which I am willing to go to understand the future direction of the world economy. So when I learned that the price of Brazilian bikini waxes was going through the roof, I had to sit up and take note. Last month, the price of the popular beauty treatment soared by 16.6% to 35 Reals, about $22.
This is no joke. The Brazilian government includes the removal of unsightly body hair in the most strategic of places in a basket of consumer services that it uses in calculating the country’s inflation rate, now estimated at 6.49%. An economist in Rio de Janeiro assured me that this has nothing to do with the opposite sex. It is one of the few measures they track, which can’t be clouded through the surreptitious altering of its quantity or quality. You either get it, or you don’t.
The big picture here is that inflation is worsening, not only in Brazil, but other emerging markets, like China, India, and Vietnam. This is why the yields on one year Brazilian debt are sky-high, a hedge fund favorite.
What can I say? An economic indicator in the hand is worth two in the bush? And I won’t even get into the implications of “Stealth” inflation. This certainly gives new meaning to the term “market bottom.”