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Where is Mexico Headed?


Ajijic

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Ab

The Peso has not hit a high of 9 in the last 5 years. See: http://finance.yahoo.com/echarts?s=MXN=X&t=1d#chart2:symbol=mxn=x;range=5y;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined Mexico"s foreign reserves are not IMF loans. Mexico's negative trade balance is miniscule Mexico has the 12th largest economy in the world. Check Yahoo Finance and/or The Economist for further details. You're welcome to your own opinion but not your own facts.

Atlas, I don't think it is a coincidence that you and Maincoons are the one's who can't understand why the local Mexican community was disappointed with the talk about property values and how much we gringos spend in the community instead of issues like safety on buses and extortions of businesses that are destroying the local economy (and extending that concept to places where the situation is worse, destroying a large segment of the Mexican productivity) etc. It seems like you don't really understand the local culture and Mexico in general. I won't do your research for you or more specifically review and correct yours, internet research is a tool, but your ears and eyes here where we live are the more dependable sources of information and a sanity check for what any of us read about Mexico's economy... assuming you speak the language, have Mexican friends from a diverse segment of the population and an open enough mind to learn from them.

The peso was 8.28 on Nov 11 2009.... just as an example. http://www.exchangerates.org.uk/USD-MXN-exchange-rate-history.html

Mexico set up a credit line of 47 Billion dollars to stabilize the peso in April of 2009. http://www.imf.org/external/pubs/ft/survey/so/2009/car041709a.htm

Mexico is the 14th largest economy in the world but has a population one third of the USA and an economy 1/15 as large... that leaves them fragile considering that half the country lives in poverty and most of the forms of foreign income are threatened by cartels and physical circumstances. Mexico's trade balance is important because it is so tied to trade with the US, if the US slows down Mexico has the possibility of actually collapsing.

Google is your friend... 'facts' are subject to interpretation.

If you're so bullish on Mexico I assume you have bought futures on the Peso and invested in peso stocks with the majority of your resources. If you haven't then maybe you aren't so sure. I am pretty sure of my predictions and have as little as possible in peso based investments at this time.

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Some were disappointed, some were not. You didn't bother to read the part where I expressed an opinion that this part of the presentation was IMO overdone and should have been specified up front as addressed to the expats.

Our maid and her husband attended. We asked her what they thought, she said that if the expats leave, there will be much unemployment and the Mexicans do not treat them well. She was glad this meeting happened. I also noticed that most of those restaurant owners who cornered the Mayor initially were Mexican. I don't have to be an expert on Mexico to notice that there are a lot of expats in all those shops and doctors offices up and down the Carretera.

I don't have to be an expert on Mexico to notice that virtually everyone we know is employing Mexicans very frequently to work on and make improvements to their homes. Nor do I have to be an economic whiz to understand that a weekend population from GDL isn't going to spend the kind of money here that a resident expat community does.

I don't claim to speak for everyone expat or Mexican, neither should you. It is pretty clear there is a lot of support for Linda's initiative from the Mexican community. I also think the police responded very positively. Not sure about the Mayor, he went on leave right after the meeting. :)

Mexico is solvent and fiscally stable. It is benefiting from companies moving manufacturing back from overseas. I have a good friend who is an executive of one of those companies, who decided to build another plant in Mexico for the North American market and devote their Chinese plant wholly to that market. He stated that he knows of other companies that are doing the same despite the problems.

By contrast, the U.S. is borrowing 40 percent of its national budget and printing money wholesale. If you don't understand that is what QE1, QE2 and who knows how many more of same do, perhaps you should spend some time with Google.

Perhaps we are overly optimistic, I prefer that to being a pessismist and a naysayer about this country. The entire western world is having severe problems right now. The EU is on the brink of dissolving despite the latest attempt at a band aid. Chinese manufacturing output is in free fall.

Things are tough all over. I'll take my chance with the Mexicans, they are suvivors.

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Ab

The peso was 8.28 on Nov 11 2009.... just as an example. http://www.exchanger...te-history.html

You'd best check your facts further:

The week of November 9,2009 the Peso was over 13 to the USD, that's the bank rate on Yahoo Finance. On XE.com it was 12.969 The Peso has never been as strong as 8 in the 7 years I've lived here. Predictions are difficult, especially when they involve the future. But the record of the value of the Peso is history and easy to verify. The one site you used has a significant error in November of 2009. It does not correlate with any other source.

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All I can say is that everyone is going on and on with their own set of facts and figures -- and from where I sit in a lovely casita overlooking beautiful Lake Chapala my reality is this:

You can go back to Canada and freeze your arse off for 8 months....

Or, better still, go back to the US where most people are in this category: (1) no job and no prospects; (2) run out of their unemployment benefits; (3) already gone through their 401Ks and pensions; (4) lost their hard earned homes to foreclosure; (5) moved in with family/friends; (7) live on subsidized food from local Food Banks (fact, my niece is head purchasing agent for two counties in the once prosperous East Bay of Bay Area of California; (7) approaching Christmas season with no way to buy presents for their children except with over extended credit cards; and, in case you have forgotten, their is rioting and protesting in the streets with the intermittent intrusion of the "police state", oh and lest we forget the upcoming elections (always an amusing thing to watch from afar).

Good luck to you all and Feliz Navidad -- I, for one, will enjoy Our Lady of Guadalupe, posadas, Three Kings, etc. while you are driving north to the cold.

Just my opinion....humble as it is.

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Atlas, the link I supplied shows the peso in the 8s from nov 8 through the 12th of 2009..... I believe my link is accurate.... Your link shows different numbers and I have no explanation but will say I don't use yahoo for currency numbers because I find them often inaccurate..... The point is the peso has fallen somewhere at least 33% to maybe 40 over the 6 years, Not the mark of a booming economy, especially if you've been here 20 years and lived through the long term patterns.

I note that you didn't comment on your commitment to your beliefs that Mexico is a better place to invest than the US.

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Atlas, the link I supplied shows the peso in the 8s from nov 8 through the 12th of 2009..... I believe my link is accurate.... Your link shows different numbers and I have no explanation but will say I don't use yahoo for currency numbers because I find them often inaccurate..... The point is the peso has fallen somewhere at least 33% to maybe 40 over the 6 years, Not the mark of a booming economy, especially if you've been here 20 years and lived through the long term patterns.

I note that you didn't comment on your commitment to your beliefs that Mexico is a better place to invest than the US.

If you can find even ONE finance or exchange site that shows the Pesos in the 8s during that week perhaps I'll listen to you. I couldn't find one, they all show 13ish. I made no comment to my investment strategy in either post. You brought that up and it's not relevent to this discussion.

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I also was unable to find another site with the 1:8 ratio--or anything close. In addition to Atlas' and bournemouth's observations, I'd add that even if that site were correct, it is not statistically valid to take a 4-day period out of an entire year and cite that as evidence of anything valid as to currency trends or the relative worth of either countries' economies.

As a furtherance to my skepticism of the site's data validity, my experience with exchange rates (based on many years of filling out expense reports in multiple currencies, is that official rates don't change over the weekend. Rates for Saturday and Sunday are the same as Friday. Monday may see a change. The site provided has differing rates on Saturday and Sunday.

To be fair, I have not had to do this for a number of years and things may have changed

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The drug violence ends when Mexico and USA follow the recommendations of the Blue Ribbon International Commission [Kofi Anon, George Schultz, many ex presidents Mexico, Brazil, Greece, Richard Branson, etc.] to decriminalize marajuana etc. Making alchohol illegal in the USA led to big time violence which was greatly reduced with prohibition.

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OMG a typical, naive perspective. The cartels suppy huge quantities of drugs to Europe, Canada, Australia, Central America, etc etc. They also control prostitution, sell watered down stolen alcohol, steal tankers of oil from PEMEX, are into prescription drugs, own large number of construction, trucking, real estate and auto businesses, kidnap and they extort millions of businesses from the little markets we all shop at to professionals including teachers, doctors, vets on a scale few realise.

They are barbaric terrorists in many parts of the world. On a side note, all those severed body parts including heads are the result of chainsaws.

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There goes Atlas again contributing nada.... typical. lmao yes I suggested Mexico may need UN peace keeping troops to turn the country around. You suggest nothing as usual.

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Double ditto and this sniping is what causes threads to be closed by the mods. I'd like to see this discussion continue. Everyone should remember that none of us can predict the future for certain. There are a lot of conflicting megatrends out there right now. Depending on which one emerges on top, things could go in a lot of different directions.

Mexico is highly dependent on the U.S. for export trade. You could look at the obvious decay of the U.S. economy and say that is a bad thing. However, you could also look at the fact that shipping costs from the far east have escalated drastically and this is driving a return of manufacturing from places like China to this hemisphere. In other words, although the pie is shrinking, Mexico could end up with a much bigger slice and a net gain.

Or not. The Chinese could devalue their currency to maintain market share and stifle the shift in its infancy.

Here's another mega trend that many of the pundits miss. Demographics. Mexico's population is still very young. On the one hand, that means more crime as younger people commit most of the crime. On the other hand, that means more growth potential as younger people have more energy and consume more. And the real sleeper: Mexico's birth rate has dropped very fast and very drastically to near replacement. That has a profound future impact, both positive and negative.

See what I mean?

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If you can find even ONE finance or exchange site that shows the Pesos in the 8s during that week perhaps I'll listen to you. I couldn't find one, they all show 13ish. I made no comment to my investment strategy in either post. You brought that up and it's not relevent to this discussion.

I supplied a link with my post.... go look at it

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I supplied a link with my post.... go look at it

Supply another one that correlates. I'm not the only one commenting in this thread that it's wrong. You should be able to notice too if you'll look at the history. Exchange rates don't change on the weekend.

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I use the XE currency converter to follow the exchange rate. It shows trading stopping (I think) around 6 PM on Fridays and resuming at 4 PM on Sundays when the Asian markets open.

I think Mexico uses the Cete rate as a means to manage the trading range of the Peso. Higher Cete rates seem to correspond with higher Peso value to dollar.

Right now, because of the Euro problem, there is flight to the dollar, driving it up against all currencies, including the Peso. When the Euro situation resolves itself, the currency markets will probably begin to notice just how out of whack government spending and borrowing is, and how out of whack the ratio of imports to exports is in the U.S. At that point, don't be surprised if the buck gets hit.

FWIW

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Supply another one that correlates. I'm not the only one commenting in this thread that it's wrong. You should be able to notice too if you'll look at the history. Exchange rates don't change on the weekend.

I said I won't do your research... the link is there and still works for me anyway... note they point out the low at the top of the page and slide down to see the actual dates. The rates start moving late afternoon on Sundays... last I looked that's during the weekend.

Aside from internet sources most of us here can remember the first half of 2008 when the peso wandered down from 11 to 10 and is now at 13... 30% in 3 years is a pretty substantial loss for most investors especially if what they've invested in is paying 6 or 7 %.

IF Europe recovers fully (a big IF in my mind) and the dollar suffers the Peso might rise but also might crash if the slowdown in the US hits the magic number. We are also at the end of a Presidential term, a time when bad things have been known to happen to the peso .... sort of a double witching hour for the peso.

I'll maintain that I wouldn't be putting long term or even unprotected short term money in pesos right now, if you are so sure about the peso and have taken long positions in the peso say so and we'll see in a year or two how that works out....

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I said I won't do your research... the link is there and still works for me anyway... note they point out the low at the top of the page and slide down to see the actual dates. The rates start moving late afternoon on Sundays... last I looked that's during the weekend.

Sure enough the link works, but I take your "I won't do your research for you", to mean that you can't find another site that matches this one. For sure I cannot. As mentioned before, the site you provide changes on both Saturday and Sunday, something not in accordance with practice or reality.
Aside from internet sources most of us here can remember the first half of 2008 when the peso wandered down from 11 to 10 and is now at 13... 30% in 3 years is a pretty substantial loss for most investors especially if what they've invested in is paying 6 or 7 %...
In this you are correct, but 11 to 10 is a long way from the 8 number that you first used to substantiate your claim.
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That's the end of sharing insight on the future of the peso here for me.... those who have open minds will have gotten the idea and the rest never will...

These are really interesting times for investors, the possibilities for big gains and BIG losses are everywhere. Personally I doubt there are any 'safe' investments in today's situation and we all have to trust our guts and make the best choices we are capable of... good luck to all.

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