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Floradude

Peso/Dollar

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The debt limit is meaningless? Tell this to your American Express card representive or even your houshold budget. This thinking is what is going to take the U.S. down the road of ancient Rome and Greese or many of the E.U countries today.

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Yes, the debt limit is meaninless if they just continue to raise it. I suspect we will not see the dust up we saw previously.

The day the major petroleum producing nations decide they want to be paid in some other currency other than the dollar, we are deep trouble. Protect yourselves. Invest in local businesses and real estate that will give you income in Mexican pesos. Don't count on receiving NOB pensions.

That is just my opinion, if you don't agree that is fine. Do what works for you.

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Contrary to some predictions of $14:1 and $15:1 peso exchange rates, the MXN peso strengthened again this morning by another 1.1% to $13.2 pesos : $1 USD.

The Loonie continues to slide , along with a weaker Ruble and weaker Brasilian Real (this morning), so currency traders are seeing more economic strength in Mexico than in the other sliding currencies?

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http://data.worldbank.org/indicator/SL.UEM.TOTL.ZS

Check out this website for unemployment information. Spain has 25% unemployment, for example. One thing we all could do is check sources and find good info. It helps clarify the problems and improve our suggested solutions.

Carol

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Mexican peso continues to stay at a relatively strong and stable rate of $13.2 - $13.25 pesos to the USD,

$18.2 pesos to the Euro,

and

just $12.07 pesos per CDN Loonie.

After some temporary butterflies over the flight of investments from the emerging economies of Brazil and Argentina, now (as predicted) the Mexican economy, Mexican government. debt, and Mexican central bank policies are looking stable compared to the US dollar and stable & strong relative to the Euro and Loonie .

The USD and investors confidence will likely droop when the 1'st quarter US economic data and jobs numbers come in (because of severe weather losses) - and currency traders get jittery over US problems dragging on Mexico - so we may see one more (artificial) dip in MXN peso values this year - but then after the global climate-change weather weirdness stops, Mexico and the USA should finish 2014 nicely .

Why? The Eurozone woes seem to have hit bottom, and are turning upward. In the USA: As the housing market works off the last of the 2010 - 2012 lay-off driven foreclosed houses, then the US construction market, construction jobs, and building materials should bounce up, causing a boost in consumer confidence as home prices rise (due to far lower drag from not so many foreclosed properties) - people feel better - and spend more - when their home is worth more.

Employers will also have shaken-off their worries over the prior mysteries and worries over Obamacare - and they should start spending some of their largest cash $$ hoards ever seen in business history. A spark in business spending and hiring due to increasing confidence should propel both the US and Mexico nicely at the end of 2014 and through 2015.

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Mexican Peso continues to strengthen vs. the US dollar for the past 2 months.

$13.04 MXN Pesos to the US Dollar and $11.85 MXN per CAD Loonie.

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What props the dollar up is its status as the world reserve currency. Formerly, that spot was held by the British pound. When it was replaced by the dollar as the reserve, the pound lost something like 40 percent of its value and did not recover. Right now, the Russians and Chinese are working very hard to do the same to the dollar and if you follow the international press, there are more and more major oil and trade deals being done without using the dollar.

Mexico is caught between a rock and a hard place. On the one hand, it is much more fiscally responsible than the U.S. these days (in terms of deficit spending) but on the other hand it is highly dependent on the U.S. for trade. Because of the former, the peso could rocket in value against the dollar but because of the latter, Mexico can't afford to have that happen and would have to devalue along side the dollar if a major devaluation of the U.S. dollar occurs.

So paradoxically, Mexico might be the best place to be if the U.S. dollar plummets.

What I notice is that things are just getting crazier and crazier everywhere and events I never thought I'd see in my lifetime are happening now.

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The supposed paradox you describe has continued to be true for the past 5 years, since 2009. Mexico's economy has been relatively stronger. Mexico's stock market and financial markets have been far better managed. Mexico's banks have been far better managed: Mexican banks did none of the US banks trillions in highly-leveraged $30:1 and $40:1 margin lending.

If we take out US trade policy destruction of Mexican jobs, Mexican unemployment has actually been better.

If Mexico could get the US taxpayers to stop spending $4 billion taxpayer $ a year to forcibly dump US corn onto Mexican markets, Mexican farm communities would turn around. The US taxpayers forcing 1.5 million Mexican family corn farms out of business has crushed many rural Mexican farm communities, forcing about 10 million rural Mexicans into becoming illegal aliens or into the drug trade.

With the spiraling US government debt ($20 trillion), and with $45 trillion in highly leveraged debt, can the US government continue to use scarce US tax $$ to continue dumping US ag products at below-production cost prices? If the USA cuts back on their $150 billion a year in agriculture "subsidies", then free market economics will work to naturally boost Mexico's economy even further.

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Snowyco, much the same could be said about Canada. They avoided most of the wretched excess of the U.S. financial markets.

The U.S. stock market is in a bubble driven by the zero interest rates and money printing of the Federal Reserve. You do know what eventually happens with all bubbles, yes?

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If we take out US trade policy destruction of Mexican jobs, Mexican unemployment has actually been better.

Pobre Mexico,so far from God and so close to the US.

Pfft.

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$11.85 MXN per CAD Loonie.

Not from my data. We trade on CanadianForex.ca which has proven to give us the best rates I've found, for Canadians.

This site was suggested to us by Actinver in Ajijic.

If I were to trade $10,000 CDN right now, the rate would be 11.6825.

The interbank rate is 11.8633 which only large banks get (NO consumers).

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The supposed paradox you describe has continued to be true for the past 5 years, since 2009. Mexico's economy has been relatively stronger. Mexico's stock market and financial markets have been far better managed. Mexico's banks have been far better managed: Mexican banks did none of the US banks trillions in highly-leveraged $30:1 and $40:1 margin lending.

If we take out US trade policy destruction of Mexican jobs, Mexican unemployment has actually been better.

If Mexico could get the US taxpayers to stop spending $4 billion taxpayer $ a year to forcibly dump US corn onto Mexican markets, Mexican farm communities would turn around. The US taxpayers forcing 1.5 million Mexican family corn farms out of business has crushed many rural Mexican farm communities, forcing about 10 million rural Mexicans into becoming illegal aliens or into the drug trade.

With the spiraling US government debt ($20 trillion), and with $45 trillion in highly leveraged debt, can the US government continue to use scarce US tax $$ to continue dumping US ag products at below-production cost prices? If the USA cuts back on their $150 billion a year in agriculture "subsidies", then free market economics will work to naturally boost Mexico's economy even further.

You haven't been following the Mexico news well enough. "Mexico is becomming the epicenter of Corporate bond defaults" http://www.paminversiones.mx/documentos/Housing_Sector_Comment.pdf

Many of those huge housing developements had no buyers and defaulted. The bonds were owned by US Banks and Mexican Banks. So yes Mexico has their own housing default.

You also fail to mention the "US trade policy creation of Mexican jobs" in automotive, electronics, aviation and avionics.

You seem to believe that illegal immigration to the use is caused by NAFTA allowed cheap corn into Mexico. Nafta did not exist before 1994 and yet President Esinhower deported 1.3 million illegals. Illegal immigration is a long term problem not much affected by NAFTA corn imports, though it had been hoped that the jobs created in Mexico through NAFTA would allow more Mexicans to find gainful employment in Mexico.

The USA doesn't "force" Mexico to buy the corn you speak of. Even without any subsidies to corn there is no way communitaria milpas will ever compete with 5000 acre fertilized, irrigated mega farms. What do you want to do, force the poor in Mexico to purchase even more expensive corn. The US is the largest exporter of corn in the world followed by Argentina and China. This corn is all sold at nearly the same price. Do you think if we refused to sell corn to Mexico and forced them to buy corn with more expensive shipping from China or Argentina, that the Mexican communities would benefit? Would the milpas grow and sell corn at world corn prices? You say "US taxpayers forcing 1.5 million Mexican family corn farms out of business" isn't this the same thing happening around the world as farms require more and more capital intensive equipment investments. Why should Mexico be immune to the small farm extinction happening in the USA and around the world? The corn is allowed under NAFTA, would Mexico have benefited without all the jobs NAFTA provided and been happy paying more for corn? The truth is I dislike Agriculture subsidies, but the beneficiaries are the world importers buying food cheaper because we pay subsidies.

Mexico also pays aigriculture subsidies one program Procampo, an estimated $1.3 billion was given last year to 2.7 million farmers. The allotment is about $74 to $100 per 2.5 acres. Mexico subsidies sugar as cane sugar can not be produced in Mexico to compete with world sugar prices. Mexicans pay. higher prices because of a lack of price competition. I believe elimating all subsidies would be the best approach; however consumers in most countries will pay more.

I am against all agriculture subsidises, the $39 billion in the EU and the $20 billion spent in the USA. But I know the benficiaries are the purchasers of cheaper food.

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"But I know the benficiaries are the purchasers of cheaper food."

... It's the wrong food, though. The artificial cheapness of corn in particular has wreaked havoc upon the health of many millions of people. I wouldn't consider that a 'benefit'. :(

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Not from my data. We trade on CanadianForex.ca which has proven to give us the best rates I've found, for Canadians.

This site was suggested to us by Actinver in Ajijic.

If I were to trade $10,000 CDN right now, the rate would be 11.6825.

The interbank rate is 11.8633 which only large banks get (NO consumers).

So, you get a poorer rate from CanadianForex: Where $1 CAD Loonie only gets you $11.68 pesos, while XE.com was offering $11.85 pesos => Which means the Canadian business was collecting an extra 1.5% from its Canadian customers.

You also say that only large banks get this rate, but that's not our experience. There are several ways we have gotten the mid-market rate or better:

  • If you drill into the individual exchange opportunities, XE gives quotes very close to the mid-market actual trading rates that are good for 15 minutes(?), but you must have an account with them.

  • I have also gotten the published mid-market rates by going into some banks (like HSBC) and negotiating a one-time custom spot-rate with the local branch manager, but that requires waiting 30 minutes for the manager to get approval check with someone in a remote office to approve the special deals. This has worked when exchanging amounts larger than $5,000 dollars..

    .

  • We have also exchanged $$ with other patrons in the lines at the bank, as we both stand in line, each with fist-fulls of our different currencies - and I propose to the Mexican who wants US dollars that I would be glad to buy their pesos at a rate equal-to or better than the mid-market rate.

    .

  • There are some Mexican businesses who need US dollars to buy US goods, and they will pay mid-market rates or better to get their hands on dollars. .

  • There are some exchange companies that will pay the mid-market rate - like some of the small exchanges near the international terminal at Benito Juarez aeropuerto - in the long walkway between the big general waiting area "Gate 19"(?) and the international area. There are times that they really want US dollars, and you can get official mid-market rates or better (likely because they have business customers who need US dollars).

It takes some insights and efforts to get or beat the mid-market official rates (thinking and operating outside the box). The last 3 options also may not be available to Canadians, because there is not as much demand for Loonies as there are for US dollars. ???

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Not from my data. We trade on CanadianForex.ca which has proven to give us the best rates I've found, for Canadians.

This site was suggested to us by Actinver in Ajijic.

If I were to trade $10,000 CDN right now, the rate would be 11.6825.

The interbank rate is 11.8633 which only large banks get (NO consumers).

Since posting the last list of 5 types of cases where ordinary people "consumers" can get the mid-market "interbank" rate or better, I realized there are 3 other additional ways we have exchanged dollars for pesos, getting the mid-market "interbank" rate or better (done repeatedly over the past 20 years):

  • There are times when bank's exchange divisions decide that they think they are CAD Loonie rich or poor, or they are USD rich or poor, and the Mexican Bank then buys Loonies or US Dollars at more favorable rates than the mid-market/spot-rates - to build the portfolio/balance of Loonies/Dollars that they need to operate
  • .
  • Bank's exchange divisions also sometimes buy US Dollars or Loonies and sell MXN Pesos, expecting the value of the Peso to fall (selling Pesos while the Peso is momentarily strong). If they have bet correctly, and the Peso weakens, they made a profit by buying cheaper Dollars while the Peso was momentarily stronger. This explains why some bank's rates are more favorable for the little consumer (us) than the posted official midmarket "interbank" rates, as the bank bets they can make a short-term profit buying more cheaper Dollars now.
  • .
  • Some Mexican banks actually calculate and set their daily published rate based on the previous day's market-basket of exchange rates. When rates are changing rapidly, that previous day's rate is not representative of the current spot rate. The official Bank of Mexico's official rate sometimes suffers from this inherent flaw - occasionally making the "official" Bank of Mexico exchange rate one of the least representative of reality - so outlets that use the "official" Banco de México rate can give you better exchange rates than the "interbank" rate, especially when the value of the peso is changing rapidly.

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