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The Peso is Tanking


lakeside7

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Difficult Realities:   I had 270W solar panel prices quoted to us just last Friday.

I went to pay for them today,  and the distributor raised prices by 12% this morning,  so yes.  prices on many goods are higher here when you pay in MXN pesos.

...  which is broadly painful & difficult for both 125 million Mexicans ... and people like Ajijic_hiker ... who simply have tried to save money & keep it in the bank

 (in anything denominated in MXN pesos)

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19 minutes ago, Ajijic_hiker said:

...and whatever you do with your US dollars...never put them in a Mexican bank account in pesos...I did about 6 years ago when the exchange rate was 11.86 to one USD so you can imagine how much of my life savings I have lost...and the last few days has been very painful...more like long term hysteria for me, anyway...so please learn from my stupid mistake...

Relax,you didn't loose anything you just didn't make an obscene gain. I am quite happy with some of my money in a Mexican chequeing account where for the first time in my life I get interest on the balance in such an account.

 

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39 minutes ago, snowyco said:

Difficult Realities:   I had 270W solar panel prices quoted to us just last Friday.

I went to pay for them today,  and the distributor raised prices by 12% this morning,  so yes.  prices on many goods are higher here when you pay in MXN pesos.

...  which is broadly painful & difficult for both 125 million Mexicans ... and people like Ajijic_hiker ... who simply have tried to save money & keep it in the bank

 (in anything denominated in MXN pesos)

 

Yes, those items are imported so no surprise with this.

How many Mexicans are out buying imported Solar Panels?

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48 minutes ago, Ajijic_hiker said:

...and whatever you do with your US dollars...never put them in a Mexican bank account in pesos...I did about 6 years ago when the exchange rate was 11.86 to one USD so you can imagine how much of my life savings I have lost...and the last few days has been very painful...more like long term hysteria for me, anyway...so please learn from my stupid mistake...

 

It wasn't a matter of stupidity it was a matter you decided to move back to the U.S. making your cost of living pegged to the U.S. and not Mexico.

 

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2 hours ago, Hud said:

How can the  US survive with that continuing? NAFTA is killing the US.

No it's not. the US flaunts the rules whenever it wishes and then it takes forever to get them back on the straight and narrow. Many years ago even before NAFTA the US dumped  corn in Mexico below cost killing off small farmers who then headed north for work in the fields of California. You're welcome. And the US has continually tried to screw with Canada on softwood lumber and wheat and loose every time in the NAFTA court even though there are US participants in that court who continually vote in Canada's favour and the WTO but not before it costs Canadians millions and job loses. The US is not a nice trading partner for Canada or Mexico. The 2 countries are # 1 and #2 in trade with it in spite of the difficulties.

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Good point.  NAFTA has killed the small farmers in Mexico.

Actually Mexico is #3.  However where the problem comes in is the difference in trade balances.  

https://en.wikipedia.org/wiki/List_of_the_largest_trading_partners_of_the_United_States

The U.S. is close to parity with Canada.  Not so close with Mexico but China is the real problem and IMHO that is where the focus should be.  Helping China doesn't do much for the U.S. whereas helping Mexico most certainly does.

The policy should be to pull factories back both to the U.S. and to Mexico out of China.  That country is not Mexico's or the U.S. friend.

I think the real problem here is the border itself and the failure of Mexico to be an equal partner with the U.S. in policing it to stop the flow of everything illegal across it.  Worse, they have actually been deliberately ferrying illegal immigrants from their southern border north to be dumped into the U.S.  This is creating a lot of anger.

Mexico can end talk about walls tomorrow by stepping up and taking responsibility for their side of that border.  I honestly believe that will be the final outcome here.

 

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7 hours ago, ned small said:

No it's not. the US flaunts the rules whenever it wishes and then it takes forever to get them back on the straight and narrow. Many years ago even before NAFTA the US dumped  corn in Mexico below cost killing off small farmers who then headed north for work in the fields of California. You're welcome. And the US has continually tried to screw with Canada on softwood lumber and wheat and loose every time in the NAFTA court even though there are US participants in that court who continually vote in Canada's favour and the WTO but not before it costs Canadians millions and job loses. The US is not a nice trading partner for Canada or Mexico. The 2 countries are # 1 and #2 in trade with it in spite of the difficulties.

That is enough reason for the US to pull out of NAFTA and get their s***  back on track. If we are not breaking even and not getting along, we don't need to be there, as things will just continue the way they are. Only REAL change will get the UDS back where it should be, and that will not come easy with those "old" men in Congress from both parties. Term limits are desperately needed NOB.

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5 hours ago, Mainecoons said:

 

The policy should be to pull factories back both to the U.S. and to Mexico out of China.  That country is not Mexico's or the U.S. friend.

I think the real problem here is the border itself and the failure of Mexico to be an equal partner with the U.S. in policing it to stop the flow of everything illegal across it.  Worse, they have actually been deliberately ferrying illegal immigrants from their southern border north to be dumped into the U.S.  This is creating a lot of anger.

Mexico can end talk about walls tomorrow by stepping up and taking responsibility for their side of that border.  I honestly believe that will be the final outcome here.

 

Detroit is clammering to build more cars, and I believe that would help the economy by returning production NOB. China is most definitely not the friend of most in the World.

I have always felt that was exactly what the new US President was saying when he said we would build that wall and Mexico would pay for it.  And, I think he made it pretty clear to EPN.  I think he believes that Mexico has the resources to essentially stop illegal people/drugs from going North, and so do I. Hopefully, they will be told straight up what is demanded of their participation in the partnership. It is way past time that the US clean up its act with foreign "partners" and demand that those partners do the same, or the US will find other partners. Again, the US Congress will be the problem to fix many things that the new President wants to fix. However, he was elected to fix them, that should be enough for the Congress, but it will not. Just my 2 pesos.

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On 11/10/2016 at 1:39 PM, pappysmarket said:

Just curious MC, is bargaining at the Feria the norm or fixed prices?

IMHO, if you try to bargain with the artisans you are doing them a big disservice.  Prices on fine Mexican crafts are extremely inexpensive compared to the skill, craftsmanship, and countless hours that are needed to create extraordinarily beautiful items.  If you ask for a discount, you might well be given one--the artisan needs to sell her or his wares.  But if you look closely, you might well see a crestfallen look--please understand that the amount you pay to an artisan for X item more than likely means far more to the artisan than it does to you.  Many artisans depend on events like the Feria for a great percent of their annual income. The trend now among savvy buyers is NOT to bargain:  pay the price, support a family which has substantially less income than you do, and enjoy your purchase. 

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29 minutes ago, HookEmHorns said:

I remember several years ago trying to bargain some wind chimes in Tonala down from 42 pesos to 30 pesos. They were very nice and I wanted to buy 10. The young man and his wife were very nice and attentive, and I noticed they had a new baby (about 4 months), When I offered 30 pesos, he said to me "12 pesos means nothing to you, Senior, but 12 pesos means a LOT to me and my family." I paid the 42 pesos (at that time  about  $2.70) and have been back to him several times to buy more wind chimes (in fact, they painted some exactly the way I wanted them, to take NOB) I always remember that experience every time I encounter something well made here in Mexico. I ask the price, and if I want it, I pay the asking price.

Yessss! Well done, HookEmHorns, and thank you for providing an excellent standard.

How many a gringo(-a, -um) would try bargaining NOB? IMHO, bargaining behavior is symptomatic of either uninformed or just-plain-ignorant ugly "Americanism."

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Especially when there's no motivation to do so....yet.

Meanwhile, back on topic the Peso closed at 20.81.  Apparently another cete interest rate boost in the works.

Problem here is all the ATMs seem to be drained dry.  The Feria may also have something to do with that.  We hosted our usual gathering of hosts and artists last night and they were a happy bunch, some have almost sold out already on just the first day.

 

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Just a note you can bargain in the USA. Not once did I ever pay retail for appliances, personal services, repairs etc.  My father was a professional artist and he would sometimes bargain to make a sale. Having a Mexican wife will give you a real prospective on bargaining here. When and how. There are definitly "gringo prices" as witnessed at the Ajijic tianguis where the prices are higher from the same vendor than in Chapala.

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On 11/9/2016 at 9:08 AM, Mainecoons said:

Capitol One uses current rates during business hours.

Peso already under 20.

 


Unfortunately,  this claim does not fit Capitol One's,  nor Visa's,  nor MasterCard's  official policies.

The big credit card companies do NOT make moment-by-moment exchanges when we use our bank cards or credit cards.

The big US credit card companies instead:   Accumulate all the Mexican cc & ATM transactions for the entire 24 hr day ... and process them at MIDNIGHT of the day the   merchant,  bank,  or ATM company   files the transaction.    They use a single daily  exchange rate for that big bulk $10's millions $$ transaction   that is    close-to    the day's   CLOSING  mid market rate.

There is no such thing as an official daily rate during the day ... as even the Banco de Mexico's official government rate is based on the previous days multiple varied mid-market day's rates + plus some hidden factors that they refuse to describe publicly,   so even the 'official' exchange rate trails the actual rates by at least a business day,  and has hidden modifiers.

Finally,    since banks,  ATM companies,   and businesses   sometimes hold our transactions for 1 to 3 business days, before booking them   and before processing them,   the rate you think you're getting on a Friday transaction,   may actually ultimately be processed using the following Monday  or even the following Wednesday's rates   (especially for small company ATMs  and for  cc purchases at small vendors).


Still ...  because our ATM transactions and CC purchases   are  bundled    daily   with 10,000's of other people's transactions   to be processed together as a single daily massive MXN-USD exchange at midnight   by Visa & Mastercard ... we generally get the most favorable rates ... very close to the closing trade's mid-market    exchange rate   for that day ...  with only very small   built-in-bank-handling fees.

These CC/ATM middle of the night exchange rates   are generally far better rates than the typical   Buy or Sell rates    given by exchange houses or individual bank exchange rates.

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27 minutes ago, Mainecoons said:

How is a freely negotiated price which can be accepted or rejected by one or both of the parties "screwing" anyone?

Again I'll recommend a little cultural research here.  Bargaining is usual in this culture, points south and many many places around the world.

MC, bargaining has been usual in Mexico (I don't know which of its many cultures you refer to, but yes, all over the country) until now.  Currently, the stance among foreigners and Mexicans alike toward bargaining for artisan work is changing: the asking price generally reflects the value of the work required to create it, of the materials used, of the time put into it, and of the skill that formed it.  Sure, you can offer to pay half the asking price--that's what many guidebooks have suggested in the past--and negotiate till you reach an agreement with the artisan.  But what's the point?  If the asking price for X item is 500 pesos and you get it for 400, you've saved yourself the equivalent of more or less $5.00, which means almost nothing to most foreigners living at Lake Chapala.  You can boast about how you got a "better" price and feel good about your shopping acumen.  Then you can turn around and donate that $5.00 to charity and feel even better about your generosity toward others.  Or you can pay the asking price for the item you want and know that you've paid the artisan for her or his years of training and skill, for an object that will beautify your home and enhance your enjoyment of life, and in the process you will have given the artisan the pleasure of believing that you--from another country and another mindset--truly value her or his work and dignity as a human being.   Be part of the change, move into the future.

My opinion, and not about you personally, of course.

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We check our exchange rate for the transaction right after it is made and with Capital One the rate seems to always correspond to the close or the mid day.

The rates are always better than those available locally as noted above.

BTW a very good guide to bargaining here:

http://www.ownmexico.org/7-tips-barter-like-professional-mexico/

 

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More Liana, I'll just say that our "adopted" artisan family does not agree with you.  They are accustomed to bargaining either when buying or selling.  Certainly it is out of line to offer half for many things but lower offers are neither insulting or unusual according to them.

 

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