Posted on 01/24/2016 7:04:38 AM PST by Citizen Zed
Investors are dumping emerging market stocks and currencies as they flee to assets that appear safer like U.S. government bonds.
"It's not just the peso. The [Russian] ruble hit a record low this week. The [South African] rand last week. It's a broad based sell-off in emerging markets," says Win Thin, global head of emerging markets strategy at Brown Brothers Harriman.
But the Mexican peso has been hit the hardest of them all in 2016.
The problem for Mexico is that it's one of the easiest emerging market currency to trade. So investors have been selling it as a proxy for emerging markets overall. "It's a 'risk off.' People are selling anything that looks risky," says Thin.
Mexico is also suffering from the dramatic crash in oil prices. Crude oil plays a large role in the Mexican economy, accounting for 11% of exports. As oil fell to its lowest level since 2003 on Wednesday, traders soured even more on the Mexico's currency.
Mexican leaders have been trying to stop the pain. Mexico's central bank has been intervening in the market by selling dollars and telling anyone who will listen that it believes the peso is oversold.
"My sense is the peso will return from the levels it is right now," Mexico's central bank Governor Agustin Carstens told Bloomberg this week in Davos.
Mexico's economy was one of the best performers in all of Latin and South America last year. Despite all the headwinds, it still grew 2.3%.
The final fear factor driving the peso down is the U.S. Federal Reserve.
(Excerpt) Read more at money.cnn.com ...
That much?
A dollar isn’t worth much more than that.
They make great poker chip’s.
Make America Mexico Again — Jeb Bush
And guitar picks (according to Billy Gibbons).
I remember bringing back some 1 peso silver coins after a visit to Mexico in the 60s.
Does that mean I’ll live like a king if retire there?
well i closed out friday long the AUD against the USD, even though it might have just been a dead cat bounce last week
In 1993, Mexico replace the peso with the nuevo peso, which was basically a 1,000 peso bill with the zeroes taken off. A few years later they dropped the word nuevo from the name.
How long until Mexico has to issue a nuevo nuevo peso?
Not a good move. If they suspect you’re a “rich” Gringo, they’ll kidnap you. Your savings will be used to pay your ransom. I doubt the corrupt Mexican Police will lift a finger to help a Gringo (rich or poor). In fact, they’ll probably want a cut.
It probably costs more to mint their money than it’s worth.
People better get ready for the next round of tortilla munchers to come storming across the border because they won’t have enough money to buy the corn for the tortillas.
I won’t even visit Mexico anyone, but I know quite a few Americans who have retired there. They say that the key is to retire to an area with lots of other retirees from el Norte and to live like you are poor.
Personally, if I can ever retire I will continue to live somewhere that I can own guns and that anyone who might want to rob me will know I am probably armed.
I remember that; other Latin American countries did the same (they initially put an “N” in front of the denomination). Sometimes they just change the currency altogether; I believe Ecuador uses $ US now. Imagine that?
Ditto.
I will now do no more than drive through a state that doesn't honor my CC. And I will never live in a state that says I can't own firearms.
Darn! I was going to send one to Yeb’s campaign but they’re still to valuable. Maybe if I send it postage due.
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