What’s Going On With The Peso?

Nothing. It hasn’t gone anywhere, it’s the dollar that’s going nuts

In these days of the wildly fluctuating peso we can all agree that this is a great time to use those U.S. dollars while in Baja. Your dollars are going a long way now.

But use them wisely! In many cases, it’s best to find a bank or a no commission cambio you trust and exchange your money there. But I wouldn’t change more than $100 or $200 at a time, as the rate changes on a daily basis.

If using cash (pesos or dollars) in town, calculate your purchase price before you hand over your money. If your receipt doesn’t include both a dollar and peso amount, ask for the price, or the exchange rate, and pay according to that information. In one day I dined at three eateries. The exchange rate was 13.3, 16.7, and 12.5 pesos to the dollar. In two of those instances I found it was best to use pesos I had obtained from the cambio earlier that day.

Scrooge-McDuck-Clipart-uncle-scrooge-mcduck-37468374-323-400 copy.jpgIn some cases the menus are out of date and don’t list the correct peso-to-dollar rates. It’s a good idea to ask what the exchange rate is that day. And some menus at restaurants catering primarily to Americanos may only print the dollar amount. It saves on menu re-printing costs, and keeps the cost of your meal steady. But the problem is, the restaurant owner has to buy his food and pay his help in pesos. That puts him in a squeeze between the dollar and the peso. So, realizing that, maybe we can be a bit more understanding when we don’t get what we think is a fair exchange rate?

And what the hell is going on with the peso, anyway? President Pena Nieto is getting creamed on social media, with these no-nothing posters blaming him for the peso’s slide against the dollar.

Well, how do you think the Canadians are feeling about the Mexican President? Are they blaming him for the slide of the Canadian dollar against the American dollar? No. They are seriously hurting when they go outside their country but they know it’s not Prime Minister Trudeau’s fault, so why are the Mexicans blaming their president? Because that’s what they do. 70 years of one party rule seems to have seriously impacted many Mexicans’ judgement. They aren’t used to reading up on these things and learning what’s really going on. They just don’t trust any official. That makes it tough to make good judgment calls about helping to steer their country in the right direction when they vote.

OK, so, anyway, why the peso slide? The Mexican economy is sound, it’s not sliding. The deal is, the American dollar is gaining. The dollar is so strong all over the world because the Chinese economy is slipping. Rather it’s just not growing as fast as it has been in recent years. But what has even more impact is oil. Yup, it keeps coming back to oil. Like we need food to power us, the world economy needs oil to power us. And right now, because Europe and China are not manufacturing so much as they were, and because automobiles are so much more fuel efficient, and because the United States has suddenly become a net exporter of oil, (we found a new way to get it out of the ground), the dollar becomes stronger.

So tell your Mexican friends to stop blaming their President for their peso slide, because he’s doing everything he can to keep their economy going.

They should blame themselves for not voting several decades ago to allow foreigners to come into the country and help them get their oil out of the ground. Pemex could not/would not tap the vast resources so the logical thing to do was to privatize Pemex. Pemex was state owned since the 1930’s and had become fat, lazy and corrupt.

But Mexicans have been told all through school that the oil is their national patrimony and they should not let a foreigner touch their oil with a 10 foot pole.

Finally, finally, President Pena Nieto was able to sneak through the legislature, over Christmas when nobody was paying attention, a bill to allow help for Pemex.

Too late.

Mexico left their national patrimony in the ground so long that nobody wants it anymore. The price of oil has slipped from more than $100 a barrel to less than $30 a barrel.

Tell your Mexican friends not to blame their President, but to blame themselves. And to stop getting their so called news on Facebook. It makes them crummy voters.