| Pages:
1
2 |
Jack Swords
Super Nomad
Posts: 1095
Registered: 8-30-2002
Location: Nipomo, CA/La Paz, BCS
Member Is Offline
|
|
Another point of view
Just received this from a friend in La Paz. Good discussion material.
THE NEW GLOBAL ECONOMIC REALITY
First: A reality check on Mexico
Mexico is in a unique position to reap many of the benefits of the decline of the US economy. In order to not violate NAFTA and other agreements the
U.S.A. cannot use direct protectionism, so it is content to allow the media to play this protectionist role. The U.S. media – over the last year
has portrayed Mexico as being on the brink of economic collapse and civil war. The Mexican people are either beheaded, kidnapped, poor, corrupt, or
narco-traffickers. The American news media was particularly aggressive in the weeks leading up to spring break. The main reason for this is money.
During that two-week period, over 120,000 young American citizens poured into Mexico and left behind hundreds of millions of dollars.
L et's look at the reality of the massive drug and corruption problem, kidnappings, murders and money. The U.S. Secretary of State Clinton was clear
in her honest assessment of the problem. "Our insatiable demand for illegal drugs fuels the drug trade. Our inability to prevent the weapons from
being illegally smuggled across the border to arm these criminals causes the deaths of police officers, soldiers and civilians," Clinton said. The
other large illegal business that is smuggled into the U.S.A. that no one likes to talk about is Human Traffic for prostitution. This "business" is
globally now competing with drugs in terms of profits.
It is critical to understand, however that the horrific violence in Mexico is over 95% confined to the three transshipping cities for these two
businesses, Tijuana , Nogales , and Juarez . The Mexican government is so serious about fighting this, that they have committed over 30,000 soldiers
to these borders towns. There was a thoughtful article written by a professor at the University of Juarez . He was reminded of the Prohibition years
in the U.S.A. and compared Juarez to Chicago when Al Capone was conducting his reign of terror capped=2 0off with The Saint Valentine's Day Massacre.
During these years, just like Juarez today, 99% of the citizens went about their daily lives and attended classes, went to the movies, restaurants,
and parks. Is there corruption in Mexico? YES !!! Is there an equal amount of corruption related to this business in the U.S.A. ? YES !!!. When you
have a pair of illegal businesses that generate over $300,000,000,000 in sales you will find massive corruption. Make no mistake about the Mexican
Drug Cartel, these "businessmen" are 100 times more sophisticated than the bumbling bootleggers during Prohibition. They form profitable alliances
all over the U.S.A. They do cost benefit analysis of their business much better than the US automobile industry.
They have found over the years that the cost of bribing U.S. . and Mexican Border 1 Guards and the transportation costs of moving marijuana from
Sinaloa to California have cut significantly into profits. That is why over the past 5-7 years they have been growing marijuana in State and Federal
Parks and BLM land all across America .
From a business standpoint, this is a tremendous cost savings on several levels. ;Let's look at California as an example as one of the largest
consumers. When you have $14.2 billion of Marijuana grown and consumed in one state, there is savings on transportation, less loss of product due to
confiscation and an overall reduction cost of bribery with law enforcement and parks service people. Another great savings is the benefit to their
employees. The penalties in Mexico for growing range from 5-15 years. The penalties in California , on average are 18 months, and out in 8 months.
The same economic principles are now being applied to the methamphetamine factories. FOX News continues to scare people with its focus on kidnapping.
There are kidnappings in Mexico. The concentration of kidnappings has been in Mexico City , among the very rich and the three aforementioned border
Cities. With the exception of Mexico, the number one city for kidnappings among NAFTA countries is Phoenix , Arizona with over 359 in 2008. The
Phoenix Police estimate that twice that number of kidnappings goes unreported, because like Mexico 99% of these crimes were directly related to drug
and human traffic. Phoenix ,unfortunately, is geographically profitable transshipping location. Mexicans, just like 99% of U.S.Citizens during
prohibition, go about their daily lives all over the country. They get up, go to school or work and live their lives untouched by the border town
violence. These same protectionist news sources have misled the public as to the real danger from the swine flu in Mexico and temporary devastated
the tourism business. As of May 27 2009 there have been 87 deaths in Mexico from the swine flu. During those same five months there have been 36
murdered school children in Chicago. The "news sources" in the USA have a lack of integrity. By their logic, if 27 deaths from the swine flu in
Mexico warrants canceling flights and cruise ships to Mexico, then close all roads and highways in the USA because of record 43,359 automobile related
deaths in the USA in 2008.
What is just getting underway is what many are calling the "Largest southern migration to Mexico of people and real estate assets since the Civil
War". A significant percentage of the Baby Boomers have been doing the research and are making the life changing decision to move out of the U.S.A.
The number one retirement destination in theworld is Mexico . There ar e already over 2,000,000 US and Canadian property owners in Mexico. The most
conservative number of American and Canadian Baby Boomers who are on their way to owning property in Mexico for full or part time living in the next
15 years is over 6,000,000. Do the math on 6,000,000 people buying a $300,000 house or condo and you will understand why the U.S. Government is
trying to tax this massive shift of money to Mexico through H.R.3056. The U.S. government calls this "The Tax Collection Responsibility Act of 2007".
Those who will have to pay it are calling this the EXIT TAX.
Mexico : A better economic choice than China.
Another large exodus from the U.S.A is high paying skilled jobs. The job shift in automobile sector, both car and parts manufacturing, is already
known by most investors. In the last few months as John Deere and Caterpillar have been laying off thousands of workers in the U.S.A. , and hiring
equal numbers in Mexico. The most recent industry that is making the shift is the aerospace manufacturers. In the city of Zacatecas there is
currently a $210 =2 0 million aerospace facility being built. With the 11U.S. companies moving there, it is estimated to provide over 200,000 new high
paying jobs in the coming years. One of the main factors for the shift in job south to Mexico instead of China is realistic analysis of total
production, labor and delivery costs. While the labor costs in China are 40% less on average, the overall transportation costs and inherent risks of
a long distance supply chain, and quality control issues, gives Mexico a distinct financial
advantage. Mexico 's real economic future Mexico has avoided completely the subprime problem that has devastated the U.S. banking industry. The
Mexican banks are healthy and profitable. Mexico has a growing and very health middle and upper middle class. The very recent introduction of
residential financing has Mexico in a unique position of having over 90% of current homeowners owning their house outright. U .S. banks are competing
for the Mexican, Canadian and American cross border loan business. It is and will continue to be a very safe and very profitable business. These same
banks that were loaning in a reckless manner ha learned their lesson20and are loaning here the old fashioned way. They require a minimum of a 680
credit score,30% down payment, and verifiable income that can support the loan. In most areas of Mexico where Baby Boomers are moving to, with the
exception of Puerto Penasco (which did not have a national and international base of buyers), there is no real estate bubble. The higher end markets
($2-20 million) in many of these destinations are going through a modest correction. The Baby Boomers market here is between $200,000 and $600,000.
With the continuing demand inside the Bay of Banderas , that price point, in the coming years, will disappear. This is the reason the Mexican
government is spending billions of dollars on more infrastructure north along the coast all the way up to Mazatlan. The other major area where America
has become overpriced is in the field of health care. This massive shift of revenues is estimated to add 5-7% to Mexico 's GDP. The name for this
"business" is Medical Tourism. The two biggest competitors for Mexico were Thailand and India . Thailand and India 's biggest drawback is geography.
Also recent events, Th ailand 's inability to keep a government in place and the recent terrorist attack in Mumbai, have helped Mexico capture close
to half of this growth industry. In Mexico today there are over 56 world class hospitals being built to keep up with this business.. Mexico is
currently sitting on a cash surplus and an almost balanced budget. Most Americans have never heard of Carlos Slim until he loaned the New York Times
$250 million. After that it became clear to many investors around the world that Mexicans already knew: that Mexico had been able to avoid the worst
of the U.S. economic devastation. Mexico 's resilience is to be admired. When the U.S.
Federal Reserve granted a $30 billion loan to each of the fol lowing countries Mexico, Singapore, South Korea, and Brazil, Mexico reinvested the money
in Treasury bonds in an account in New York City .
According to oil traders, Mexico's Pemex wisely as the price of oil shot to $147 a barrel put in place an investment strategy that hinged on oil
trading in the range of $38-$60 a barrel.
Since the beginning of 2009 Mexico has been collecting revenues on hedged positions that give them $90- $110 per barrel today. Mexico 's recent and
under reported oil discovery in the Palaeo Channels of Chicontepec has placed it third in the world for oil reserves, right behind Canada and Saudi
Arabia .
The following is a quote from Rosalind Wilson, President of the Canadian Chamber of Commerce on March 19,2009. "The strength of the Mexican economic
system makes the country a favorite destination for Canadian investment".
The demand for full and part time living by American and Canadian Baby Boomers is evident throughout the country.
The top two choice locations are ocean front, and ocean view. Mexico, with the world's 13th largest GDP, is no longer a "Third World Country", but
rather fast growing, economically secure state, as the most recent five-year history of its financial markets when compared to the U.S.A.'s financial
markets suggests.
DOW JONES MAY 2004 10,200 MAY 2009 8,200 20% LOSS IN 5 YEARS
MEXICAN BOLSA MAY 2004 10,000 MAY 2009 23,000 130% GAIN IN 5 YEARS
Adamarie King
A Conde' Nast Traveler Magazine
|
|
|
arrowhead
Banned
Posts: 912
Registered: 5-5-2009
Member Is Offline
|
|
Another poorly researched "Blame it all on the US" article.
No soy por ni contra apatía.
|
|
|
rpleger
Super Nomad
Posts: 1087
Registered: 3-12-2005
Location: H. Mulegé, BCS
Member Is Offline
Mood: Was good.
|
|
Sounds right to me...Viva Mexico!!!!!!
Richard on the Hill
*ABROAD*, adj. At war with savages and idiots. To be a Frenchman abroad is to
be miserable; to be an American abroad is to make others miserable.
-- Ambrose Bierce, _The Enlarged Devil\'s Dictionary_
|
|
|
wilderone
Ultra Nomad
Posts: 3880
Registered: 2-9-2004
Member Is Offline
|
|
Didn't mention the poverty, government corruption, illiteracy, poor infrastructure. And Mexico doesn't take care of its environment, and will turn
its back on its citizens in favor of monied politicos. Whoever wrote the article was desperately trying to entice a favored view, but is fraught with
flawed analysis. Absolutely none of that economics bears on the day-in-the-life of the average citizen - gringo or Mexican or Indigenous. Most will
have inadequate electricity, water, waste, sewage, transportation, job opportunity.
|
|
|
ElFaro
Nomad
Posts: 231
Registered: 9-16-2007
Member Is Offline
|
|
| Quote: | Originally posted by Jack Swords
The main reason for this is money. During that two-week period, over 120,000 young American citizens poured into Mexico and left behind hundreds of
millions of dollars.
|
What...? Even $100,000,000 divided by 120,000 is $835 per...that's an awful lot of beer, fish tacos, and condoms!! Hard to believe the cheap young
college gringos would spend that much each. If it was "hundreds of millions" ???? Come on !! 
|
|
|
CaboRon
Ultra Nomad
Posts: 3401
Registered: 3-24-2007
Location: The Valley of the Moon
Member Is Offline
Mood: Peacefull
|
|
The Truth, Thankyou
| Quote: | Originally posted by wilderone
Didn't mention the poverty, government corruption, illiteracy, poor infrastructure. And Mexico doesn't take care of its environment, and will turn
its back on its citizens in favor of monied politicos. Whoever wrote the article was desperately trying to entice a favored view, but is fraught with
flawed analysis. Absolutely none of that economics bears on the day-in-the-life of the average citizen - gringo or Mexican or Indigenous. Most will
have inadequate electricity, water, waste, sewage, transportation, job opportunity. |
|
|
|
bajalou
Ultra Nomad
Posts: 4459
Registered: 3-11-2004
Location: South of the broder
Member Is Offline
|
|
| Quote: | Originally posted by ElFaro
| Quote: | Originally posted by Jack Swords
The main reason for this is money. During that two-week period, over 120,000 young American citizens poured into Mexico and left behind hundreds of
millions of dollars.
|
What...? Even $100,000,000 divided by 120,000 is $835 per...that's an awful lot of beer, fish tacos, and condoms!! Hard to believe the cheap young
college gringos would spend that much each. If it was "hundreds of millions" ???? Come on !! |
I've heard it reported that the average spent including hotels etc is well over $1,000 per person. Spring break in another country (where you don't
drive) isn't cheap.
No Bad Days
\"Never argue with an idiot. People watching may not be able to tell the difference\"
\"The trouble with doing nothing is - how do I know when I\'m done?\"
Nomad Baja Interactive map
And in the San Felipe area - check out Valle Chico area |
|
|
Crusoe
Senior Nomad
Posts: 731
Registered: 10-14-2006
Member Is Offline
|
|
Ms. King of Conde Nast Mag. in the last paragraph states that "Mexico is no longer Third World Country".......That is a completely bogus claim as
anyone who has traveled in and around Mexico knows..... We have some friends who have lived on the mainland for 35 years now, in Sayulita, which is
just north of Puerto Vallarta, who have put a very nice view home and property on the market because of the inability of the township to build a sewer
treatment facility. For the last 20 years people have been building view houses and septic systems on the side of the hills with bad drainfields and
all the sewage runs downhill under the town. For the last 5 years the whole town and surrounding areas stink 24/7 of Sewage. all kinds of different
disease outbreaks have resulted because of this. The municipaity and officials in charge refuse to do anything to correct the situation. Many small
towns are faced with the same horrid situation. ++C++
|
|
|
JESSE
Ultra Nomad
Posts: 3370
Registered: 11-5-2002
Member Is Offline
|
|
I think the article is right on on many things, but i also think its a little optimistic. Mexico has enourmous potential, that is not new, we Mexicans
have known this for a long time. Yes, theres many things that have been done right under the current administration, but Mexico has yet to adress its
most serious and possibly fatal problems.
1.-EDUCATION. Mexico needs to get rid of its current education system, if it ever wants to acomplish something. The current system, based on
memorization, does not work.
2.-LABOR. Current labor laws need to be dumped.
3.-SOCIAL SECURITY. When 7 out of 10 pesos are spent on fat bonuses, salaries, and pensions for workers of the Seguro Social, you got a problem.
4.-OPEN UP PEMEX AND CFE. Mexico is only the second nation in the world that does not allow private investment in oil or electricity.
I believe these four issues, if resolved or improved, would result in a much more competetitive and educated society wich would lower corruption
rates, and increase the overall wellfare of the nation.
|
|
|
wilderone
Ultra Nomad
Posts: 3880
Registered: 2-9-2004
Member Is Offline
|
|
Charles Simpson wrote the article. He is involved in real estate investment in Mexico.
|
|
|
Martyman
Super Nomad
Posts: 1904
Registered: 9-10-2004
Member Is Offline
|
|
| Quote: | Originally posted by Jack Swords
the most recent five-year history of its financial markets when compared to the U.S.A.'s financial markets suggests.
DOW JONES MAY 2004 10,200 MAY 2009 8,200 20% LOSS IN 5 YEARS
MEXICAN BOLSA MAY 2004 10,000 MAY 2009 23,000 130% GAIN IN 5 YEARS
|
Is this true about the stock market?
|
|
|
JESSE
Ultra Nomad
Posts: 3370
Registered: 11-5-2002
Member Is Offline
|
|
| Quote: | Originally posted by lencho
| Quote: | Originally posted by JESSE
4.-OPEN UP PEMEX AND CFE. Mexico is only the second nation in the world that does not allow private investment in oil or electricity..
|
What's your gripe with CFE? Personally, I think they're doing a great job. Power is available (and cheap, for efficient consumers).
I especially appreciate them during hurricane season, when those cabrones are out on the poles restoring power almost before the horizontal blowing
rain has moved out of the area...
--Larry |
They are heavily subsidized, we can´t afford to keep spending so much money.
|
|
|
k-rico
Super Nomad
Posts: 2079
Registered: 7-10-2008
Location: Playas de Tijuana
Member Is Offline
|
|
| Quote: | Originally posted by Martyman
| Quote: | Originally posted by Jack Swords
the most recent five-year history of its financial markets when compared to the U.S.A.'s financial markets suggests.
DOW JONES MAY 2004 10,200 MAY 2009 8,200 20% LOSS IN 5 YEARS
MEXICAN BOLSA MAY 2004 10,000 MAY 2009 23,000 130% GAIN IN 5 YEARS
|
Is this true about the stock market? |
see chart
[Edited on 8-21-2009 by k-rico]
|
|
|
Bajahowodd
Elite Nomad
Posts: 9274
Registered: 12-15-2008
Location: Disneyland Adjacent and anywhere in Baja
Member Is Offline
|
|
I think the problem with the article was that it tried to cover too much territory. As Jesse said, much of it is true. Mexico has a huge population of
young people, who are, despite Jesse's complaint, receiving an education that in many ways, exceeds what kids are receiving in the US. There are
problems, of course. But, as for being positioned to make great strides in the 21st Century, Mexico has much going on for it. I'll comment on two
other issues. CFE. Sometimes private industry does it better; sometimes not. If you look around the US, you'll see a patchwork of public and private
utilities. As for Pemex....the whole idea that it is a source of national pride and should be sacrosanct is ridiculous. It is truly one of those
public entities that could be run more efficiently by private interests.
As for the third world v first world argument, much of it depends on where you are and how long you have been visiting or living in Mexico. Mexico has
made unbelieveable progress in the past 20 years. I'm not sure that I could think of a country that has moved this far forward during that time.
|
|
|
ncampion
Super Nomad
Posts: 1238
Registered: 4-15-2006
Location: Loreto
Member Is Offline
Mood: Retired and Loving it
|
|
| Quote: | Originally posted by lencho
| Quote: | Originally posted by JESSE
They are heavily subsidized... |
That's for sure!
You have any idea how much of that goes to internal inefficiency and corruption (as compared to subsidizing the individual consumers' basic rate)? I
haven't a clue...
--Larry |
That's for double sure!
Mexico is running out of oil, not because their reserves are used up, but because they have failed to invest in exploration and new well drilling to
keep pace with demand. A typical example of letting big government do something that belongs in the private sector.
.
|
|
|
fdt
Ultra Nomad
Posts: 4059
Registered: 9-7-2003
Location: Tijuana, Baja California
Member Is Offline
Mood: Yeah, what if it all goes right
|
|
| Quote: | Originally posted by JESSE
1.-EDUCATION. Mexico needs to get rid of its current education system, if it ever wants to acomplish something. The current system, based on
memorization, does not work.
|
It's been done "Reforma Educativa"
http://www.sep.gob.mx/wb/sep1/sep1_Bol2020807
Razonar en lugar de memorizar.
A well informed Baja California traveler is a smart Baja California traveler!
|
|
|
Russ
Elite Nomad
Posts: 6742
Registered: 7-4-2004
Location: Punta Chivato
Member Is Offline
|
|
Mexican economy went off a cliff in the second three months of 2009
I enjoyed reading the first article and hope it has some truth in it for the near future for Mexico. However rosy that article paint things I
suspect this is a bit closer to reality. http://www.cnn.com/2009/WORLD/americas/08/22/mexico.economy/...
Bahia Concepcion where life starts...given a chance!
|
|
|
BajaGringo
Ultra Nomad
Posts: 3922
Registered: 8-24-2006
Location: La Chorera
Member Is Offline
Mood: Let's have a BBQ!
|
|
I agree that the lead article is probably a bit too rosy as it failed to take into account all of the challenges Mexico faces. One thing that does
give me some hope though is the fact that Mexico is not mortgaged to the Chinese and others for several trillions of dollars. Let's see where we are
in five years from now...
|
|
|
JESSE
Ultra Nomad
Posts: 3370
Registered: 11-5-2002
Member Is Offline
|
|
The drop as almost all Swine flu related. Before the swine flu hit, we where doing pretty good.
|
|
|
arrowhead
Banned
Posts: 912
Registered: 5-5-2009
Member Is Offline
|
|
| Quote: | Originally posted by BajaGringo
One thing that does give me some hope though is the fact that Mexico is not mortgaged to the Chinese and others for several trillions of dollars.
Let's see where we are in five years from now... |
How does that matter? Mexico has never run a huge public debt like the US, but has defaulted four times in the last century.
1914-1919
1942 and 1946, Mexico negotiated a 90 percent reduction of foreign debt principal
1982
1995
The US has never defaulted. Debt has two sides: the amount of debt and the ability to repay it. Which do you think is a safer loan? A $1 million loan
to Bill Gates, the richest man in the world, or a $10,000 loan to that little indio on Avenida Revolucion who has her kids scurrying around selling
chicles?
Even though the loan to Bill Gates is 100 times larger, it is 1,000 times safer.
In five or six years, Mexico will no longer be exporting oil, which is its largest source of foreign income.
No soy por ni contra apatía.
|
|
|
| Pages:
1
2 |
![[*]](images/xmbforum/default_icon.gif){kind=icon}
