DENNIS
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The current appreciation of the peso against the dollar is a mirage
Translated via Google from EL Mexicano (2/7/11)
TIJUANA .- The current appreciation of the peso against the dollar is a mirage,
the federal government is intervening to keep the dollar down, but this is bad
because it will come a time when it returns to its real price, impacting border
economies.
This is an economic analyst warned the Colef, Cuauhtemoc Calderon Villareal, who
explained that the U.S. currency is not entirely free to the law of supply and
demand, but there is some control.
"The government has a policy of having a strong peso, to float freely, it is not
so free, has gone hand the federal government, through the Bank of Mexico,
people are demanding dollars, and there are too many dollars."
"However this has several effects, one certainly is that remittances are
impacted because Mexicans receive less money, but also in tourism because
Americans see their purchasing power eroded by visiting the country and pay
dóalres while generated leakage consumers of Mexico to the United States, "said
Calderon Villareal.
"Even with this apparent appreciation of the peso, will export less, and this
could be seen reflected in economies like the Tijuana border," said the
researcher.
He explained that the current exchange rate is not competitive, but is expected
to continue throughout the year not pass the barrier on the 12 pesos, which he
said will bring serious consequences because it could return to their real
price, and emphasized that what matters is that the government works to
strengthen its domestic market, creating jobs, because the peso-dollar, is a
peripheral area of the economy, "the most important is that job because there is
no use a cheap dollar, when Mexican families do not have purchasing power by not
having work, "the researcher stressed Colef. (EJU).
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gnukid
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At this moment the dollar has risen against the peso incrementally over the recent weeks to
1 U.S. dollar = 11.9919894 Mexican pesos.
You will not get a honest analysis of what's happening on main stream media on either side of the border but you can make sense of it by reviewing
recent events in my opinion.
The US dollar is closely tied to many or most currencies and is not tied to the valuation of any other precious metal while both the dollar and
precious metals are largely controlled markets manipulated by large shareholders and ultrafast incremental trading allowing profits for large
institutions. In North America we see inflation in the dollar and reduced value in our purchases, most currencies do not show this devaluation since
they are tied together, so the currency markets in general do not show the reduced purchasing power, yet you feel it.
In Mexico we have seen recent changes to how Mexico treats the dollar, its more difficult to transfer dollar funds and more difficult to exchange
dollars to pesos. In effect this has radically changed how Mexico views and uses the dollar and has resulted in a incremental disconnect from the
dollar for the Mexican peso.
Why? Who benefits?
[Edited on 2-7-2011 by gnukid]
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tjBill
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Hopefully the prediction is true that our dollars will get stronger in Mexico.
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gnukid
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Opinion: The disconnect between the peso and the dollar and the reduction of common and flexible options to transfer and use dollars in Mexico has
caused fewer legal dollars to be available in Mexico hence a rise in value versus pesos, yet due to the reduced options for spending dollars, the
common street value of dollars in mexico is less, usually 10-11 pesos, this causes a increase in the differential in black market values versus
exchange rate, creating a greater value in laundering (dollar) money. All the while, in the US any member of the Board of Directors of a Corporation
my deposit dollars without reporting, unlike the general public.
Mexico has and is playing an increasing role worldwide as a center for transportation and distribution of both illegal drugs and money laundering,
which may also be observed in continued drug cartel influence and grand construction projects which defy logic or practicality. If any of these
observations are correct and continue you will see an increasing number of large projects, including increased orchestrated failures, increasing
number of tear downs of unsuccessful projects for new projects.
As general public this affects us by creating an incremental increase (less than 10 percent range) in purchase power where we can legally exchange
dollars for pesos and also hurts us by creating false high real estate values and more instability.
P.S. Dennis' headline might be accidentally reversed since we are seeing an increase in the dollar value to the peso.
[Edited on 2-7-2011 by gnukid]
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DENNIS
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| Quote: | Originally posted by gnukid
P.S. Dennis' headline might be accidentally reversed since we are seeing an increase in the dollar value to the peso.
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Well...all I did was cut 'n paste from another site, but I don't follow your statement above, Paul.
The dollar today is buying less Peso today than it did a month ago so it, the Dollar, seems to be decreasing in value to the Peso.
This always gets confusing and usually it turns out to be the symantics of the thing.
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oldlady
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You are correct Dennis. The dollar hit a high at approx. 13.25 pesos to the dollar late in August last year and has been declining in value since to
its present low point.
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gnukid
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I thought the dollar was down to 11.3 pesos over the last months and now is up to 12 pesos to the dollar as of Friday. To me that means that the
dollar is gaining versus the peso. I think most anyone here would agree with this which further leads me to believe there is some misleading reports
in the news. Do you agree with me that the dollar has gained value to the peso over the recent period since you get more pesos to the dollar now
versus a month ago?
Hmmm here's a chart which agrees with Dennis though not with my atm transactions.... who knows.
[Edited on 2-7-2011 by gnukid]
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DENNIS
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I don't recall it going anywhere near 11.3 for a very long time. In the last few days, it dipped below 12, twice. That got my attention.
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Riom
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| Quote: | Originally posted by gnukid[/i
P.S. Dennis' headline might be accidentally reversed since we are seeing an increase in the dollar value to the peso.
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No, the dollar has been declining in value relative to the peso over the past few months:
http://www.x-rates.com/d/MXN/USD/graph120.html
(that shows how many pesos you can buy for a dollar, at interbank rates).
Long term, this trend is likely to continue as the massive amounts of money printing in the US reduces the value of each dollar (because there's more
dollars for the same amount of trade). Hopefully this will only be controlled high inflation (to reduce the national debt by destroying private
savings) rather than hyperinflation. This isn't just the current AND previous administrations in the US, the UK and the Eurozone are doing the same,
to inflate away their debt problems.
But Mexico has it's own reasons for the peso to decline as well (problems with three top sources of foreign exchange: tourism, oil, remittances) so
it's really anybody's guess which will have the stronger effect in the short/medium term (especially as the dollar gets extra short-term support by
being a "safe haven").
Rob
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oldlady
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According to my charts (dailies) on 1/7 in ranged from 12.19 to 12.25. Since the high I referenced, and in the last 30 days, it has stayed in a
descending channel. I don't find anything of real substance on the charts to suggest the dollar is in an uptrend against the peso.
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monoloco
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Here's a chart that shows the trend:http://www.x-rates.com/d/MXN/USD/graph120.html
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gnukid
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I guess I was looking at my personal experience, which relates to poor choices in ATMs which improved over time so my rate has increased while in fact
I was getting ripped pretty bad back in Sept, Oct, Nov until I chose ATMs more wisely.
There are various alternative news stories today that Mexico took action to disconnect from the dollar to improve the peso position and it's working
apparently even while prices are escalating rapidly.
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