Mexicans are chasing a world record wave. But before we pop the champagne, let us examine the fiscal currents. The surging interest in surfing, particularly the quest to ride the largest wave, is being touted as a national trend.
Yet, as a seasoned observer of markets, I see a different undertow: a flight from peso-denominated assets. When citizens seek thrills in international waters, it often signals a lack of confidence in domestic economic stability. The recent gilt yield volatility in London has its parallels here.
Why chase waves when your currency is eroding faster than a sandcastle? The government's spending spree, financed by debt, is creating a mirage of prosperity. The real wave is capital flight, and it is not breaking in Mexico's favour.
Market efficiency dictates that we look beyond the froth. The quest for a record wave may be exciting, but the underlying economic reality is a rip current of inflation and fiscal irresponsibility. Beware the distraction; the bottom line never lies.
