Mexico Connect
Forums  > General > Living, Working, Retiring


Poncho32

Feb 5, 2009, 5:34 PM

Post #1 of 18 (5247 views)

Shortcut

Paso devaluation?

Can't Post | Private Reply
There is a rumor going around here in Vallarta that the paso is about to take a large drop?
It has been moving all over the money arena for sometime now.
It had a close of today at 14.3420 to the dollar
any one know of this?
Bud



bournemouth

Feb 5, 2009, 5:50 PM

Post #2 of 18 (5232 views)

Shortcut

Re: [Bud Crest] Paso devaluation?

Can't Post | Private Reply
Bub - the peso floats. It strengthened little today because the central bank started buying pesos directly from banks, rather than going the auction route, which had not been working. As the peso actually was selling at above 14.60 a couple of days ago, it has recovered 30 centavos or so.

I can't see a scenario that would call for an abrupt drop, but who can tell - the financial world is nuts at the moment.


raferguson


Feb 5, 2009, 6:34 PM

Post #3 of 18 (5222 views)

Shortcut

Re: [Bud Crest] Paso devaluation?

Can't Post | Private Reply
The peso has been losing ground due to the global financial crisis, and other factors specific to Mexico.

1. Remittances (money sent home) are down.
2. Oil is down.
3. Manufacturing is down
4. The financial situation in the US and elsewhere is likely to reduce tourism to Mexico.
5. Foreign direct investment is likely to go down.

The items above are all very important to the Mexican economy, as described in the quote below. At this point, all are pointed in the wrong direction.

http://www.dallasfed.org/...e/2006/swe0601c.html


Quote
Workers’ remittances now occupy second place as a source of foreign exchange in Mexico, behind maquiladoras and ahead of tourism and foreign direct investment.


The other issue is the Mexico has had a drastic peso devaluation in the not too distant past, around 1994. The peso value dropped by a factor of two in a very short time, triggering an economic crisis, which was also tied to the Zapatista uprising. People who remember the 1994 devaluation and economic crisis are likely to be skittish about another possible devaluation, which explains the intensity of rumors. The 1994 crisis had major negative impact on the Mexican people, economically and psychologically. People lost their homes, you name it. A very bad thing.

http://en.wikipedia.org/...mic_crisis_in_Mexico

So I would suggest that there are real economic factors behind the weakness of the peso, as well as psychological and historic factors.

Of course, it is an ill wind that blows nobody good; a peso devaluation is potentially a good opportunity to buy property in Mexico, as well as an opportunity to travel first class at low prices. These opportunities do not last long, so act quickly if the opportunity arises. This of course assumes that you have assets and/or income denominated in US dollars or another strong currency.

If you are asking me what will happen, I have no idea. I think that the country has better economic management today than it did in 1994. I hope and expect that an economic crisis can be averted. Which does not mean that the peso is going to increase in value in the near future.

Richard


http://www.fergusonsculpture.com


robrt8

Feb 5, 2009, 8:12 PM

Post #4 of 18 (5212 views)

Shortcut

Re: [raferguson] Paso devaluation?

Can't Post | Private Reply
Not your best post, raferguson.
At least you say you don't have any idea. None of us do.



RickS


Feb 6, 2009, 12:55 PM

Post #5 of 18 (5138 views)

Shortcut

Re: [robrt8] Paso devaluation?

Can't Post | Private Reply
While I don't belong to the refurguson Fan Club, I don't see the reason for your comment. Would you expound?


robrt8

Feb 6, 2009, 5:24 PM

Post #6 of 18 (5102 views)

Shortcut

Re: [RickS] Paso devaluation?

Can't Post | Private Reply
Too much speculation IMVHO, some of which contradicts itself...and what does expound mean?

Don't answer that. The last time I felt like expounding was the morning after drinking Oso Negro.


DavidMcL


Feb 6, 2009, 5:51 PM

Post #7 of 18 (5095 views)

Shortcut

Re: [robrt8] Paso devaluation?

Can't Post | Private Reply
Expound:

transitive verb
1 a: to set forth : state b: to defend with argument
2: to explain by setting forth in careful and often elaborate detail <expound a law>

intransitive verb: to make a statement :

Courtesy of Websters
David McL
WebJefe


johanson


Feb 6, 2009, 6:25 PM

Post #8 of 18 (5091 views)

Shortcut

Re: [DavidMcL] Paso devaluation?

Can't Post | Private Reply
All I know is that raferguson sure knows his cell phones and has been very helpful on the tech forum. Hey I don't always agree with anyone, sometimes I even disagree with myself. I greatly appreciate all of your opinions even when I disagree with them. What bothers me most is, that more often than I want to admit, I later find that I was wrong when I disagreed with one of you.

I am having a big fight right now with the better half of me, who says don't have another glass of wine. The bad half won. I'm going down to the kitchen to get another glass of wine. Have a great evening.


robrt8

Feb 6, 2009, 7:42 PM

Post #9 of 18 (5075 views)

Shortcut

Re: [DavidMcL] Paso devaluation?

Can't Post | Private Reply

In Reply To
to explain by setting forth in careful and often elaborate detail


The peso floats.


thriftqueen

Feb 7, 2009, 8:32 AM

Post #10 of 18 (5020 views)

Shortcut

Re: [DavidMcL] Paso devaluation?

Can't Post | Private Reply
"What does it mean, Mom"? My response, "look it up in the dictionary". My grown kids today still quote my response.


BajaGringo


Feb 7, 2009, 12:05 PM

Post #11 of 18 (4994 views)

Shortcut

Re: [thriftqueen] Paso devaluation?

Can't Post | Private Reply
Okay kids, I am telling you for the last time - DON'T MAKE ME STOP THIS CAR!!!!


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


Gringal

Feb 7, 2009, 12:43 PM

Post #12 of 18 (4987 views)

Shortcut

Re: [BajaGringo] Paso devaluation?

Can't Post | Private Reply
Loved that one.

My crystal ball was stolen by bandidos. I am still awaiting shipment of the replacement.

Meanwhile, I am following some advice from a former banker: Don't put any more money in your peso account than you can afford to lose. This is the same advice that led me to take my money out of the stock market. I'll go with that, tempting as that exchange rate may be.


BajaGringo


Feb 7, 2009, 12:56 PM

Post #13 of 18 (4984 views)

Shortcut

Re: [Gringal] Paso devaluation?

Can't Post | Private Reply
Actually the accounts today in Mexican banks (peso and dollar) are insured. A little different from the fiasco of times past...


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


Gringal

Feb 7, 2009, 2:58 PM

Post #14 of 18 (4965 views)

Shortcut

Re: [BajaGringo] Paso devaluation?

Can't Post | Private Reply
My point was that I do not have any more pesos, valued or devalued, in a Mexican bank, than I can afford to have "reduced". Not that our dollars are sacrosanct, either..


BajaGringo


Feb 7, 2009, 3:20 PM

Post #15 of 18 (4960 views)

Shortcut

Re: [Gringal] Paso devaluation?

Can't Post | Private Reply
We are living in uncertain times, that is for sure. So what do we do - gold bars under the mattress???

;-)


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


Gayla

Feb 8, 2009, 10:02 AM

Post #16 of 18 (4899 views)

Shortcut

Re: [BajaGringo] Paso devaluation?

Can't Post | Private Reply
Too lumpy ;-)

BTW, love the new photo and "do"


BajaGringo


Feb 8, 2009, 10:11 AM

Post #17 of 18 (4897 views)

Shortcut

Re: [Gayla] Paso devaluation?

Can't Post | Private Reply
Yea, I decided I was due for a makeover...


Our House Building Project in Mexico...
Lomas de San Martin
Loving Life on the Baja Peninsula


Carron

Feb 8, 2009, 10:46 AM

Post #18 of 18 (4887 views)

Shortcut

Re: [BajaGringo] Paso devaluation?

Can't Post | Private Reply
My husband and I have been discussing these very kinds of problems. We have a Mexican bank account where our monthly social security checks are directly deposited. We sure like the way our account looks on the 3rd of every month! With the excellent exchange rate now we think we are wealthy for a few days afterward. But we, too, are nervous about the future of the peso. He works a part-time job in Del Rio and keeps a small dollar account there, but mostly just to cover expenses of his work. We lose a lot if we have to take dollars out of the peso account.

He has collected silver coins for years, but mostly for re-sale. A lucrative little side business. We are now seriously considering investing in more of them for keeps, maybe in a coffee can buried in the compost pile???
 
 
Search for (advanced search) Powered by Gossamer Forum v.1.2.4