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Floradude

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The Mexican peso to the US dollar is 17.9002 this morning. This is an all time high since all the years I have been in Mexico. Looks like it could go over 18?

This is terrible for Mexico but at the same time is favorable for those of us who convert dollars to pesos to live in Mexico.

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Not so bad if you use Mexican products and services as the inflation rate for same, in Mexico, is very low.

I don't have US dollars and try to avoid US imports. I think the Canadian exchange rate stays about the same.

Great for Mexican exporters, bad for US supporters of Donald Trump.

Could it be that the US dollar is overvalued in the scheme of world currencies? I think it is terrible for US commerce and businesses, but don't really care. And, of course, it is great for US citizens with US dollar income living in Mexico, Canada, or Europe or any number of other countries where the dollar is overvalued.

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As Mexican real estate prices have been slow to react to the weakening MXN peso, have the Canadian real estate prices been slow to react to the Loonies falling values (?) as the Loonie was par for the US dollar, then sliding 12%, then sliding further to 30%, and now down 40% vs. the US dollar?

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Not so bad if you use Mexican products and services as the inflation rate for same, in Mexico, is very low.

I don't have US dollars and try to avoid US imports. I think the Canadian exchange rate stays about the same.

Great for Mexican exporters, bad for US supporters of Donald Trump.

Could it be that the US dollar is overvalued in the scheme of world currencies? I think it is terrible for US commerce and businesses, but don't really care. And, of course, it is great for US citizens with US dollar income living in Mexico, Canada, or Europe or any number of other countries where the dollar is overvalued.

Why do some people grasp any opportunity, no matter how ridiculous, to throw spears at Trump? Did he have anything to do with any of this?

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The best currency is a strong currency.

.

unless you are a US company or US worker ... trying to compete internationally,

as US manufactured goods become steadily less competitive due to an over-valued 'strong' US dollar.

Notice that US manufacturing output has fallen by -1.2% for 2015 due to the strong US dollar changes.

Do we really cheer, as the USA loses manufacturing jobs, due to "a strong currency" ?

Sure, US retired expats benefit (selfishly?) cheering for a stronger US dollar, but if you have kids or grandkids who are working, it's a different picture.

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Trump, Cruz et al want us to believe its not due to US dollar strength, but

the ISM PMI (Industrial manufacturers purchasing managers materials buying decisions) disagree. Instead, they say it's a strong dollar effect, as

recent manufacturing decreases have tracked with recent US dollar strength increases -
meaning it is not a part of the older 1993 NAFTA and GATT effects.

http://www.fxstreet.com/news/forex-news/article.aspx?storyid=ae8a674a-7a44-4d1a-a0c1-dc58c12e691a

and

"A year ago, (in 2014), it cost about $1.40 to buy one euro; today, because the dollar has gained strength,
it costs $1.12.


That’s a sweet deal if you’re an American in Paris. But it’s a tough deal if you’re an American exporter, because it means our exports cost more in foreign currencies and imports from abroad are cheaper here. "

https://www.washingtonpost.com/posteverything/wp/2015/05/11/the-strong-dollar-is-hurting-u-s-manufacturing-theres-a-lesson-in-there-for-the-tpp/

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I think a lot more manufacturing jobs have been lost to poor choices by politicians of all stripes (Nafta GATT,etc ) than to a strong dollar.

.

In addition to industrial Purchasing Managers views & spending decisions, and on top of economists and Bloomberg financial experts reports,

the economic experts at the Fed have also reported the problems of a strong dollar on US exports:

"Fed policy makers have voiced concern about the strong dollar's drag on exports, both in Federal Open Market Committee minutes and in speeches . It's a major point of concern for monetary policy-watchers ..."

http://www.bloomberg.com/news/articles/2015-07-29/here-s-how-much-the-strong-dollar-hurts-american-companies

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As Mexican real estate prices have been slow to react to the weakening MXN peso, have the Canadian real estate prices been slow to react to the Loonies falling values (?) as the Loonie was par for the US dollar, then sliding 12%, then sliding further to 30%, and now down 40% vs. the US dollar?

Why do you think they would or should react? U.S. Real Estate prices don't go up or down with the $USD.

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Well of course a strong dollar tends to depress exports and increase imports, we don't need any blurbs from the Fed to figure that out.

The American manufacturing sector was strongest when we laid duties and tariffs on imports and thus reduced demand for imported goods and kept the good manufacturing jobs in the USA rather than exporting the jobs to third world countries. You may or may not remember when one worker could comfortably support a family of 4 or 6 and had good health insurance also (as I recall it was actually called "hospitalization"). Then big business, consumers and politicians decided the best thing for the US economy was cheap imported consumer goods. The rest is history. Pat Buchanan and Ross Perot were right in what they predicted but I guess many people are happy to have their cheap tv's phones, etc.

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Why do you think they would or should react? U.S. Real Estate prices don't go up or down with the $USD.

.

Why? The dog wags the tail. The tail does not wag the dog.

The US big dog wags the Mexican tail.

.

5 decades of financial and economic data show that the US economy and Mexican economies are strongly linked - where US economic changes cause big swings in Mexico's prices ... and swings Mexico's economy because of

~ $218 billion of US exports to Mexico ... per year

~ $272 billion of US imports from Mexico ... per year

~ $20 billion or so annually of Mexican immigrants additional remittances from the USA back to Mexico

~ plus USA's additional uncounted imports of $30 billion a year of illegal drugs from Mexico

~ Mexican travelers spent $18.7 billion in the USA

~ 20 million Americans visiting & spending in Mexico annually ... spending $1,200 per person ... => another $25 billion a year of impacts outside of import/export data

As the US dollar strengthened from $12.5 to $18, it makes a 44% impact on the relative worth of these numbers.

A quick sum shows roughly $550 billion USD of US-Mexico total economic activities annually exchanged

directly affects roughly 30% of Mexico's total GDP ...

So yes, when a strengthening US dollar affects one third of Mexico's economy ,

a 44% stronger dollar likely ultimately drives Mexican prices.

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Prices have really gone up in CostCo, we went today. What used to cost 7500 pesos is now costing 10,000. With the exchange rate change it is probably a wash but I would think this would be putting a damper on their largely Mexican clientelle who can't convert dollars at higher rates to compensate.

They seemed to be out of more stuff than usual too. This situation has to be putting a strain on the company.

As for the real estate, comparing to what is going on in the U.S. or Canada doesn't seem valid to me as they don't have markets priced in foreign currencies like this one. I would think this would be putting a damper on Mexican purchases of property here as in effect local RE prices have gone up 25% or more even though the dollar price is level.

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Not so bad if you use Mexican products and services as the inflation rate for same, in Mexico, is very low.

I don't have US dollars and try to avoid US imports. I think the Canadian exchange rate stays about the same.

Great for Mexican exporters, bad for US supporters of Donald Trump.

Could it be that the US dollar is overvalued in the scheme of world currencies? I think it is terrible for US commerce and businesses, but don't really care. And, of course, it is great for US citizens with US dollar income living in Mexico, Canada, or Europe or any number of other countries where the dollar is overvalued.

Why do some people grasp any opportunity, no matter how ridiculous, to throw spears at Trump? Did he have anything to do with any of this?

No spears thrown at Trump. One of the main points in his stump speeches is the fact that so many manufacturing jobs are being lost to Mexico, which I welcome....good for Mexico. That is why I say "bad for Trump and his supporters", because they are against it. I didn't say he had anything to do with it, just that he was opposed to it.

How is stating facts, "throwing spears"? Some people on this board take the point of view. of "what is best for Mexico".

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Prices have really gone up in CostCo, we went today. What used to cost 7500 pesos is now costing 10,000. With the exchange rate change it is probably a wash but I would think this would be putting a damper on their largely Mexican clientelle who can't convert dollars at higher rates to compensate.

They seemed to be out of more stuff than usual too. This situation has to be putting a strain on the company.

As for the real estate, comparing to what is going on in the U.S. or Canada doesn't seem valid to me as they don't have markets priced in foreign currencies like this one. I would think this would be putting a damper on Mexican purchases of property here as in effect local RE prices have gone up 25% or more even though the dollar price is level.

Costco merchandises a lot of US products, so sure the market basket there is going to cost more. Mexicans will either be able to afford US products in their budget or they won't. We won't starve to death if we can't afford it. Not as nice as when we could buy cheap US products, but it will not be the end of the world, we've had to do it before.

The real estate market in Guad. and most cities and towns in Jalisco and most of Mexico that is priced in US dollars is so infinitesimally small that it has very little consequence except for small enclaves like Chapala which probably has the largest presence of US ex-pats anywhere in Mexico....a small anomaly in a large ocean.

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CostCo here has never been cheap. We just hope they don't get priced out of the market since their clientele is mostly Mexican. We expats sure aren't going to keep the doors open. That was my point. Remember that CostCo Mexico is a Mexican company and one that has struggled some in the past. I'd sure hate to lose them, wouldn't you?

As for the concern NOB about illegal immigration I always wonder what the Mexican response would be if, say, 4 million "gringos" give or take were to enter the country illegally without papers, jobs, money, or health care. Would they be welcomed with open arms? Would Mexico have "sanctuary" cities? Would employers fall all over themselves to hire them knowing they were here illegally? Would they be given free anything?

Certainly a reading of Mexico's immigration laws suggests otherwise. Actually Mexico is the country that has immigration laws that are clearly designed to put the interests of native citizens first and stress the preservation of Mexican culture and language.

Mexico is the country that the U.S. should emulate when it comes to immigration, not the other way round. Mexico puts Mexico first when it comes to immigration, exactly as it should be.

I would also suggest that both countries need to understand just how linked their futures and prosperity are. It would be great to see the U.S. begin to appreciate their future lies south of the border and not in the sands of the Middle East. And it would be great to see Mexico recognize that having one standard for immigration when it comes to Mexico and quite another when it comes to the U.S. is not sustainable or just.

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.

Why? The dog wags the tail. The tail does not wag the dog.

The US big dog wags the Mexican tail.

.

5 decades of financial and economic data show that the US economy and Mexican economies are strongly linked - where US economic changes cause big swings in Mexico's prices ... and swings Mexico's economy because of

~ $218 billion of US exports to Mexico ... per year

~ $272 billion of US imports from Mexico ... per year

~ $20 billion or so annually of Mexican immigrants additional remittances from the USA back to Mexico

~ plus USA's additional uncounted imports of $30 billion a year of illegal drugs from Mexico

~ Mexican travelers spent $18.7 billion in the USA

~ 20 million Americans visiting & spending in Mexico annually ... spending $1,200 per person ... => another $25 billion a year of impacts outside of import/export data

As the US dollar strengthened from $12.5 to $18, it makes a 44% impact on the relative worth of these numbers.

A quick sum shows roughly $550 billion USD of US-Mexico total economic activities annually exchanged

directly affects roughly 30% of Mexico's total GDP ...

So yes, when a strengthening US dollar affects one third of Mexico's economy ,

a 44% stronger dollar likely ultimately drives Mexican prices.

s

All of those are true, but remember every $US that comes into Mexico now results in more $Pesos in. From tourists to exports. Oil is at a very low price but it's priced in $US so every barrel Mexico sell is now worth more $Pesos.

None of that have anything to do with real estate prices!

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Prices have really gone up in CostCo, we went today. What used to cost 7500 pesos is now costing 10,000. With the exchange rate change it is probably a wash but I would think this would be putting a damper on their largely Mexican clientelle who can't convert dollars at higher rates to compensate.

They seemed to be out of more stuff than usual too. This situation has to be putting a strain on the company.

As for the real estate, comparing to what is going on in the U.S. or Canada doesn't seem valid to me as they don't have markets priced in foreign currencies like this one. I would think this would be putting a damper on Mexican purchases of property here as in effect local RE prices have gone up 25% or more even though the dollar price is level.

Using 12.5/$1 vs. 17.5/$1 would indicate that prices have gone down. I've been watching wine prices at Costco since Sept. 2014 and they haven't changed at all. I buy the same "house wines" every month, one from Chile and one from France and there's been NO change. Maybe the fresh stuff such as US beef and European cheese have gone up.

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.

unless you are a US company or US worker ... trying to compete internationally,

as US manufactured goods become steadily less competitive due to an over-valued 'strong' US dollar.

Notice that US manufacturing output has fallen by -1.2% for 2015 due to the strong US dollar changes.

Do we really cheer, as the USA loses manufacturing jobs, due to "a strong currency" ?

Sure, US retired expats benefit (selfishly?) cheering for a stronger US dollar, but if you have kids or grandkids who are working, it's a different picture.

The US imports WAY more than it exports, so the US benefits more from a strong currency. When the $US is weak the import bill skyrockets.

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As for the concern NOB about illegal immigration I always wonder what the Mexican response would be if, say, 4 million "gringos" give or take were to enter the country illegally without papers, jobs, money, or health care. Would they be welcomed with open arms? Would Mexico have "sanctuary" cities? Would employers fall all over themselves to hire them knowing they were here illegally? Would they be given free anything?

The GREAT majority of Mexican immigrants NOB are doing work that gringos don't want to do.

I can't imagine an influx of gringos coming here to work for low wages doing hard labor.

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