BajaNomad

Peso hit a 6-year high against the dollar today

fulano - 7-22-2008 at 02:27 PM

Anticipation that the Bank of Mexico will raise its interest rates again on 8/15 after just having raised them last week. The spread between US and Mexico target interest rates is now 6%.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aSXc...

flyfishinPam - 7-22-2008 at 03:15 PM

yes it did, i exchanged online at 10,05 hoping it won't fall below 10 but not so sure.. time to convert to pesos? did i ever think i would consider that!!?? ever?!

Don't be too hasty

thebajarunner - 7-22-2008 at 04:31 PM

In the 80's I had a Bancomer account with about $5000 U.S. and it was a so-called dollar account- never, never mess with those, went the chorus.

Except they did devalue all the dollar acccounts.

And the slide continured.

Well, today the remaining balance might buy three fish tacos at a street vendor.

Woooosh - 7-22-2008 at 05:54 PM

Wouldn't a dollar account be better right now? You don't actually lose until you convert them to pesos? Most of my repair guys give quotes in dollars thisclose to the border anyway. Or didn't they fix the banking system after the last peso crash- to protect personal accounts?

The La Fonda restaurant in La Mission was always converting a dollar to 10 pesos- so they were making 10% profit on the exchange alone. Maybe they're giving 9 now :)

[Edited on 7-23-2008 by Woooosh]

Bruce R Leech - 7-22-2008 at 06:53 PM

I think it is more like the dollar hit a new low

palmeto99 - 7-22-2008 at 06:55 PM

Quote:
Originally posted by Bruce R Leech
I think it is more like the dollar hit a new low



Bruce,

Did you not run a $ exchange in Mulege at one time...:cool:

The dollar account was "protected"

thebajarunner - 7-22-2008 at 07:51 PM

Quote:
Originally posted by Woooosh
Wouldn't a dollar account be better right now? You don't actually lose until you convert them to pesos? Most of my repair guys give quotes in dollars thisclose to the border anyway. Or didn't they fix the banking system after the last peso crash- to protect personal accounts?

The La Fonda restaurant in La Mission was always converting a dollar to 10 pesos- so they were making 10% profit on the exchange alone. Maybe they're giving 9 now :)

[Edited on 7-23-2008 by Woooosh]


The Mexican government "guaranteed" that the dollar accounts would not be devalued.
And thus, they paid significantly less interest.
Guess what???
Yep!!!
D.F. pulled the plug on the dollar account and all of our "safe" investments went straight into the dumper.
It was a sad, but clear lesson on the honor level of the PRI and its minions.
I believe that was Lopez Portillos's regime.
("El Perro"- you remember him, "I will defend the peso like a dog">>>>> arf, arf, arf)

fulano - 7-22-2008 at 07:59 PM

Do you want to hear an honest-to-God true story? In 1982 Mexico was on the brink of financial disaster with a devastating outflow of capital and was just about to default on its foreign debt. President López Portillo nationalized all the banks and placed strict currency controls to stop the flight of capital out of the country.

Some people I know in Los Angeles had relatives who were Mexican, but they were of Euorpean descent and had non-latino last names, e.g they didn't look Mexican. These guys flew down to Mexico City and stuffed their pockets with those smaller gold bars, the ones that are the size of playing cards. They then flew up to TJ and walked across the border like tourists returning from a day trip to Ave. Revolucion with the entire family fortune - million of dollars - in their pockets.

It was perfectly legal on the US side back then, it was long before the money-laundering rules required reporting anything.

thebajarunner - 7-22-2008 at 08:21 PM

Thanks for the story,
sure makes me feel better,
guess one of those bars probably has my name on it.

oh well,
a good lesson learned, and I had really thought to place a much larger amount on deposit,
the $5k was sort of a test.

CaboRon - 7-23-2008 at 05:26 AM

Quote:
Originally posted by Woooosh
Wouldn't a dollar account be better right now? You don't actually lose until you convert them to pesos? Most of my repair guys give quotes in dollars thisclose to the border anyway. Or didn't they fix the banking system after the last peso crash- to protect personal accounts?

The La Fonda restaurant in La Mission was always converting a dollar to 10 pesos- so they were making 10% profit on the exchange alone. Maybe they're giving 9 now :)

[Edited on 7-23-2008 by Woooosh]


Woosh,

The restaurants in Cabo San Lucas have been doing the ten pesos to a dollar thing for at least the last two years.

And, yes, I am curious as to what the rate is today in the restaurants .... 9 to 1, 8 to 1 ???

Guess I'll have to make a Home Depot run, and have lunch to check it out.

CaboRon

dollar accounts are insured up to 150K dollars

flyfishinPam - 7-23-2008 at 06:03 PM

Quote:
Originally posted by thebajarunner
Quote:
Originally posted by Woooosh
Wouldn't a dollar account be better right now? You don't actually lose until you convert them to pesos? Most of my repair guys give quotes in dollars thisclose to the border anyway. Or didn't they fix the banking system after the last peso crash- to protect personal accounts?

The La Fonda restaurant in La Mission was always converting a dollar to 10 pesos- so they were making 10% profit on the exchange alone. Maybe they're giving 9 now :)

[Edited on 7-23-2008 by Woooosh]


The Mexican government "guaranteed" that the dollar accounts would not be devalued.
And thus, they paid significantly less interest.
Guess what???
Yep!!!
D.F. pulled the plug on the dollar account and all of our "safe" investments went straight into the dumper.
It was a sad, but clear lesson on the honor level of the PRI and its minions.
I believe that was Lopez Portillos's regime.
("El Perro"- you remember him, "I will defend the peso like a dog">>>>> arf, arf, arf)


bajarunner
your information is 20+ years old, things have changed since then.

http://www.ipab.org.mx/english/index_eng_2.asp

banks in mexico are insured with something similar to fdic in the usa up to $160K dollars. I forget what its called but looked into it a few years back. i don't think bbva bancomer will fail anytime soon. credit is very difficult to get here, like it has to be repaid, and boy do they rake in the money. the fees are out of control.

for instance if you are a registered tax payer you are required to pay tax via your account on the internet. the bbva bancomer charges me about $22 bucks a month for this service. my husband also has to pay this way and they charge him the same. so every 12 months pay the banks this because you don't have another option to pay taxes and everyone has to do it? they're raking it in. also, want a credit card? well I thought I did and my business qualified for a $10K limit which I could have raised but that was enough. well they required me to sign to them rights to a piece of real estate. now way, i guess i don't really want it that bad, i was just thinking of renting a car once in awhile. these banks actually seem to want to be paid back and they're all business.

i'm thinking that it may be best to do home improvements this year before the dollar falls more and materials become unaffordable, grow a garden, canning, bake bread, raise chickens, becuse i don't have too much faith in the us economy in the next few years.

this morning i changed dollars online (best exchange rate possible) it was 9.99, later today I did it again before the market closed, 9.96 to the dollar. so i think we should be worrying more about the dollar than the peso.

Pam, you be kidding me, right?!?!?!?!?

thebajarunner - 7-23-2008 at 06:34 PM

My info is 20 years old *** sez you

"Things have changed" ***** sez you

Well, those were all the same platitudes that were spewed 20 years ago (ancient history- right?)

And, I say, wise men learn by studying history.

And when push comes to shove,
yep,
they will shove it again,
just like they did to me way back then....

"Insured"????
yuk yuk yuk


(by the way, I have a trunk full of Jumping Bean Tree seeds,
for a very fair price, how many would you like?
I sell bridges too....
and time shares in the monuments on the Avenida in D.F.)

flyfishinPam - 7-23-2008 at 06:37 PM

have you read the link I posted? its in english. but i agree with you i don't trust the banks. i trust the banks here more than in the usa especilly after keeping up with the news, which is why i say home improvement and we'll be enjoying ourselves as much as possible because it may just all go away. thats a reality for us here and in the usa.

aha baja - 7-23-2008 at 06:56 PM

Was in Bahia de L.A. 2 weeks ago.When I got home I unpacked my shaving kit and found 540 in pesos(paper) I was going to convert it to u.s. dollars but now I'm thinking that if I hold on to it for a couple of months...........:lol:

Yeah, I read it

thebajarunner - 7-23-2008 at 07:07 PM

Quote:
Originally posted by flyfishinPam
have you read the link I posted? its in english. but i agree with you i don't trust the banks. i trust the banks here more than in the usa especilly after keeping up with the news, which is why i say home improvement and we'll be enjoying ourselves as much as possible because it may just all go away. thats a reality for us here and in the usa.


and twenty years ago I read all the platitudes about "never messed with dollars, never will"

oh well, let's not make this personal,
sounds like we both agree,

and, I have changed a couple of banks here in Central Cal in the last week, and have reduced balances at another.

it ain't just the Mexicans....

not by a long shot!!

Skeet/Loreto - 7-24-2008 at 03:39 AM

Just for the Ole Time Record; How things change!

I am not exact about the Date, but in 1976 I purchased a 22 Ft. Panga from Mac Shroyer for $900 in Pesos. Peso were trading at 8 to 1, when I went to pick it up the Rate was 12 to 1.

Ihad opened a 28 Day Account at the Bank in Villa Constitution when the Rate was 8 to 1 I was informed of the upcoming rate Change by a good Mexican Friend , went to Villa with drew my money waited 3 days and went back in at 12 to One.

I played this game with $30,000 loaned to me by my Mother, Always being informed ahead of time so that I could get to the Bank, pull out the Money then go back in. Did this several times until the Rate got to 3,000 to 1!!
Doubled and Tripled my original investment.

28 Day accounts were paying up to 148% Interest. Sometimes you just have to take the Risk, of Course I had a good Mexicano Friend, and still have that Friend, who really helped .

God Bless her.

Skeet/Loreto

palmeto99 - 7-24-2008 at 05:57 AM

Quote:
Originally posted by flyfishinPam
Quote:
Originally posted by thebajarunner
Quote:
Originally posted by Woooosh
Wouldn't a dollar account be better right now? You don't actually lose until you convert them to pesos? Most of my repair guys give quotes in dollars thisclose to the border anyway. Or didn't they fix the banking system after the last peso crash- to protect personal accounts?

The La Fonda restaurant in La Mission was always converting a dollar to 10 pesos- so they were making 10% profit on the exchange alone. Maybe they're giving 9 now :)

[Edited on 7-23-2008 by Woooosh]


The Mexican government "guaranteed" that the dollar accounts would not be devalued.
And thus, they paid significantly less interest.
Guess what???
Yep!!!
D.F. pulled the plug on the dollar account and all of our "safe" investments went straight into the dumper.
It was a sad, but clear lesson on the honor level of the PRI and its minions.
I believe that was Lopez Portillos's regime.
("El Perro"- you remember him, "I will defend the peso like a dog">>>>> arf, arf, arf)


bajarunner
your information is 20+ years old, things have changed since then.

http://www.ipab.org.mx/english/index_eng_2.asp

banks in mexico are insured with something similar to fdic in the usa up to $160K dollars. I forget what its called but looked into it a few years back. i don't think bbva bancomer will fail anytime soon. credit is very difficult to get here, like it has to be repaid, and boy do they rake in the money. the fees are out of control.

for instance if you are a registered tax payer you are required to pay tax via your account on the internet. the bbva bancomer charges me about $22 bucks a month for this service. my husband also has to pay this way and they charge him the same. so every 12 months pay the banks this because you don't have another option to pay taxes and everyone has to do it? they're raking it in. also, want a credit card? well I thought I did and my business qualified for a $10K limit which I could have raised but that was enough. well they required me to sign to them rights to a piece of real estate. now way, i guess i don't really want it that bad, i was just thinking of renting a car once in awhile. these banks actually seem to want to be paid back and they're all business.

i'm thinking that it may be best to do home improvements this year before the dollar falls more and materials become unaffordable, grow a garden, canning, bake bread, raise chickens, becuse i don't have too much faith in the us economy in the next few years.

this morning i changed dollars online (best exchange rate possible) it was 9.99, later today I did it again before the market closed, 9.96 to the dollar. so i think we should be worrying more about the dollar than the peso.



Do you really think the mexican government if it got into a pinch would not nationalize the banks again or devalue the peso.
One thing that they have proven in the past is their total disregard for any agreements,contracts or how much buying power the citizens would lose should a financial crisis hit Mexico.
The subsidized fuel and the state of Pemex is the bull in the china shop when it comes to Mexicos financial future and buying chickens and growing a garden will not be enough .
I would suggest a plan B of escape back to the states if any long term money market disaster hits Mexico which it might..
The fact that the USA is in trouble is not in question but the ability of the average US citizen to work their way out of recession is what is the difference between the two economies............:cool:

thebajarunner - 7-24-2008 at 08:34 AM

Back before the big devaluation at the banks the Mexican banks were making most of their loans so-called "dollar loans"

In other words, if you tried to play the game that Skeets has described, you still had to pay back in dollars, no matter where the peso went. Otherwise, you could just delay and eventually push a wheelbarrow full of pesos in the door and payoff the loan in one stroke. (some private lenders got really burned on this on)

And yeah, I fully agree with Palmetto (now that is a switch) that the government and the banks should never again be trusted down there.

My grandfather had a great saying, one that I have carried through life.....

"Fool me once, shame on you- fool me twice, shame on me"

They got me once, never again!!!

Central Bank suspending daily sales of dollars

tigerdog - 7-26-2008 at 04:49 PM

I heard today that the Central Bank of Mexico would suspend daily sales of the dollar beginning next Friday, then I read this:
Quote:

Mexico's peso dropped 0.7 percent to 10.1058 per dollar, the most in more than four months. The central bank's announcement to halt sales of the dollar followed the government's decision today to purchase $8 billion from Banco de Mexico's foreign reserves. The peso touched 10.0030 on July 23, the strongest level since October 2002. It has increased 0.8 percent this week.


http://www.bloomberg.com/apps/news?pid=20601101&sid=aoGM...

Make of it what you will...

CaboRon - 7-26-2008 at 05:29 PM

Quote:
Originally posted by thebajarunner
Back before the big devaluation at the banks the Mexican banks were making most of their loans so-called "dollar loans"

In other words, if you tried to play the game that Skeets has described, you still had to pay back in dollars, no matter where the peso went. Otherwise, you could just delay and eventually push a wheelbarrow full of pesos in the door and payoff the loan in one stroke. (some private lenders got really burned on this on)

Couldn't have said it better myself....

CaboRon

And yeah, I fully agree with Palmetto (now that is a switch) that the government and the banks should never again be trusted down there.

My grandfather had a great saying, one that I have carried through life.....

"Fool me once, shame on you- fool me twice, shame on me"

They got me once, never again!!!

CR- I assume there was a point in repeating my post???

thebajarunner - 7-26-2008 at 05:33 PM

But, for the life of me, I cannot figure out what that point might be...

(seems like a lot of "empty posts" going around, guess that is a way to build the post total)