Posted on 10/09/2008 11:50:08 AM PDT by SwinneySwitch
After more than a decade of stability, the Mexican peso has slid more than 15 percent in value against the U.S. dollar this week, a run that has ominous implications for San Antonio and South Texas.
Peso trading closed Wednesday at 12.32 pesos to $1. The peso momentarily plunged Wednesday to 14.29 pesos to $1, a 27 percent fall from Friday's close.
A devalued peso means Mexican shoppers will have reduced purchasing power when shopping in San Antonio and in Texas border cities. Texas exports to Mexico will be more expensive for Mexicans to buy.
The Mexican currency is a victim of the spreading international financial industry and credit crisis, said Trinity University economics professor Jorge Gonzalez on Wednesday. Gonzalez warned that the slide in the peso's value will be difficult to reverse because it is based on fear, not Mexico’s economic fundamentals.
If the peso's slide is sustained, reduced retail activity and trade will mean job reductions in Texas and Mexico, Gonzalez added.
The run against the peso is caused by fears that a severe U.S. recession would reduce Mexican exports to the United States, Gonzalez said.
"There would be difficulty selling Mexican products to the United States," Gonzalez said.
"Over the last two days, there has been a rush out of emerging markets, Russia, Brazil and Argentina, in favor of safe havens, which now are U.S. treasuries," he added. "Once fear gets hold of the market, it can spiral out of control."
Like people.....................
My idea would be to spend those pesos in Mexico, it’s a better deal down there...but with free housing, healthcare, education and cash benefits from the Gringos...it offsets the currency loss in value...
“Please remember to remit payments back from un-taxed wages to Mexico. Remember, Mexico does not stop at the border”
—Vicente Fox and Felipe’ Calderon
I think that all illegals should return to help prop up the peso.
“I think the border is kind of an artificial barrier”, from San Antonio councilwoman Patti Radle.
I’ve read that remittances of US dollars are down 25 percent from a year ago. Its not surprising that Mexican currency would swoon.
Here comes the North American Union!
It appears Texans will be stuck with even higher heath care bills.
No, here comes another Mexican bailout with US taxpayers dollars.
So, I suppose we’ll bail out Mexico’s peso....again???
You are correct. The greenback rules around the globe!
1. How long are you staying?
2. Business or pleasure?
3. How much cash did you bring?
4 Where are you staying?
5. Occupation?
20,000,000 people come here without recourse and we continue to have our leaders genuflect to Calderon (see Clinton, Bush I, II).
Sad.
Illegal aliens that send their money back home just got a 27% pay increase. Looks like I might head to Cancun after all this winter. I don’t know. But I wouldn’t be surprised if corruption played a part in it.
:o
After Canada, Mexico is the second largest destination for exports from America, i.e., 13.7% of our exports. Mexico sends 87.5% of its exports to the US and 56% of its imports come from the US. Mexico is our second most important trading partner.
I’m thinking Tulum or Playa del Carmen. I can taste those pina coladas already.
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