Tuesday, May 12, 2009

International Monetary Policy and the Price of Hookers in Latvia

Johm Hempton diagnoses the dire economic situation in the Baltics, particularly Latvia (which experienced terrible street riots earlier this year):

Ryanair canceled the Shannon/Riga flight (and the Irish lads now go to Prague). The London Riga flights are less full. There are plenty of complaints on the web about over-priced bars and rip-offs in Riga. The oldest and one of the most dependable of professions was – due the ridiculous exchange rate situation – just priced out of existence.

To the extent that for the last fifteen years the economy of Eastern Europe has been based rather unsustainably on cheap beer, cheap hookers, and cheap Ryanair flights, all of this may not be such a bad thing.