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."
Well, yeah, all the Mexicans come here and buy stuff!.............;^)
Actually, they make up one of the biggest groups of folks shopping at Wal Mart, to say nothing of Toyota dealerships (they buy their Tundras here).
That doesn’t make sense. We are talking about exports and imports. The vaule of purchased of people who cross the border to buy things are not included in those figures.
I call Wal-Mart here “Little Mexico”!..................especially on Friday evenings!...........
You haven’t been to my Wal-Mart...............I’m nowhere near a border..........
I think we are talking past one another. I don’t understand the connection between Wal-Mart sales in the US to Mexicans in the US and US and Mexican import and export statistics.
Yes, I'm being facetious and you're being serious. Not a good combo for intellectual exchange!......;^)
I've got one.
What the hell happened ?
Socialism. That, and the land of opportunity to the north.
corruption, an out of control birthrate, a legacy of spanish style cruelty and oppression, lack of a stake in having a civil society, too much revolucion, too much manana.
Best times were probably the dictatorship years of Porfirio Diaz.
I’m told that these coins are collectors items in Mexico. They were everywhere when I took a summer session at the Tech in Monterrey many years ago.
I visited Tulum and Playa del Carmen last week! What a wonderful vacation.
I’ve just lost about a half million with this stock market crash.
I really don’t give a crap about anything Mexico except that they quit sending us their uneducated unwashed masses.
“Mexico is our second most important trading partner.”
In pre-NAFTA 1992, we had an annual balance of trade SURPLUS of $5.4 billon with Mexico.
In 2007 we had a trade DEFICIT of $74.6 billion.
Much of it has to do with oil.
The peso traded at 13.2194 per US dollar at 5 p.m. New York time today.
If you want on, or off this S. Texas/Mexico ping list, please FReepMail me.
Bad economy!
People using more illegal drugs.
“I think” and “Patty Radle” are mutually exclusive, in my experience. She does everything from the feeling of white guilt that she and ex Rob developed from their privileged upbringing in the late 60s. They’ve done great things, like Inner City Pantry, but they’ve both gone over the edge.
Colonel, USAFR
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