Santiago - 5-6-2005 at 06:25 AM
I have copied this from another poster on Fred's board: made me stop and think for just a moment. I would like to hear what some of you think about
this subject.
The pump price for all three grades of fuel is supposed to be the same throughout the republica. The refinerey at Veracruz is tiny compared to the
refinery at SALAMANCA, another being near Valladolid.
La Jornada recently commented about the "tarifas especiales de la fronteriza al norte". The price differences between they the border gasolineras and
those in interior are slowly being amortized upward into the tarifas nacionales de la gasolina y diesel.
With regards to the dollar devaluation now underway, the US treasury is trying to shake the Chinese Yuan from being tightly latched to the US Dollar.
The cost of petroleum is keyed to the US Dollar. If the Yuan doesn't float soon the US is going to impart economic sanctions against China, including
perhaps a thirty percent tarriff surcharge on Chinese items.
High oil prices are affecting the economy of the USA far, far more seriously than the general public is aware of. Inflation is going to start going up
by whole percentage points and guess what, the Fed is going to start raising rates. This is called STAGFLATION, and Mexico is going to have to have a
controlled devaluation of it's currency or face an economic meltdown. I really feel for those whom refinanced their homes with adjustable mortgage
rates in the USA. Unless oil returns to less than twenty five dollars a barrel, prime interest rates are headed for more than ten percent.
Mexican politics dictate that the peso will be held artifically high until Manual Lopez Obredor takes office and then let him deal with the new "peso
crisis". My opinion of Vicente Fox will really ascend if he should shoulder the approaching crisis of the US economy by softening the impact of a peso
crisis by adjusting the peso to where it really belongs at todays's marketplace (12.4 to 1 would be realistic).
Just like in the early nineties, Mexicans are spending enormous amounts of money on foreign goods. Stores such as Sears, Home Depot, Azteca, and
Salinas & Rocha have boosted base cash prices on household furniture and prices to absolutely STUPID levels (Can you believe that a SINGLE
Craftsman nutdriver costs SEVEN DOLLARS at a Sears Store here). This is a higher dollar price than it is for a SNAP.ON nutdriver in the states, but
the stores are all advertising NO INTERES for the first six months, etc. Many middle-class Mexican families are going deep into debt, and the upcoming
economic crisis will raise retail interest rates to beyond fifty percent. Can a repeat of the December 22, 1994 peso crisis be averted? Vamos a Ver.
My guess is that "People Will Never Learn".
comitan - 5-6-2005 at 08:56 AM
Santiago
I also printed out those thoughts, predictions will file away and see.