Folks, this is really becoming more apparent by the day. Mexico and Canada are doing a better job of running a budget than the Americans. Their central governments' are running something remotely akin to a balanced budget of sorts. The centre-right of the old centrist party (the famous PRI - privilege, redundancy, and insipidness) along with the National Action Party and the new President have been somewhat effective in keeping some sense of reality about spending by the central government.
The Board of Governors of the Banco de Mexico (their Fed) is not printing money as is Bernacke and the cabal of anti-American ghosts who seem to be controlling him from some Ouija Board in Hell. The Mexican and Canadian currencies have gained substantially during the past few months, and to-day, El Gringo Viejo went and bought his pesos for the coming month's administration at our little hideaway.
It was an eye openner. So far this year, the number of pesos that one dollar can buy has decreased from 13.00 pesos to...as of mid-morning to-day...11.90 . That is a loss of about 8.5%, which is one of the steepest, if not the steepest drops in the free market value of the American dollar against the Mexican peso since the implied parity at 12.50/1.00 was abandoned in 1976.
To put all in perspective, the leftists Luis Echeverria Alvarez and Jose Lopez Portillo ran their two six year terms into a twelve year Dante's Inferno of economic morass that literally destroyed the Banco de Mexico and the stability that had been carefully crafted by very moderate left, centre, and rightwing policies from about 1945 through 1970. Echeverria began to flood money into the reach of the populace with unbalanced budgets on the premise that Mexico's new industrial might and success with the Olympic Summer Games in 1968 would result in forcing Mexico into the ranks of Great Nations as Japan had done almost overnight. His notion of threatening increased nationalisation of "laggard industries" and enforcement of draconian labour union rules, along with absurdly out of balanced budgets, caused the first major devaluation since after World War II's readjustments.
By the time he left office the peso had lost 50% of its value against the dollar. (Liberal reporters, who are stupid by nature, would report that it had lost over 100% of its value, but obviously they had majored in new math). But as the new Presidente took office, the peso continued its wobble by half-lifes....finally ending around 600 pesos / 1 dollar. Miquel de la Madrid came in and began a slow, meticulous return to some kind of normalcy. He allowed two tiered "official rate" and "market rate" policy to die and returned the peso to full free floating, free market rules. By the end of his term...the people were glad to report that the peso was worth about 3,000 / 1 .....and a happy hour bill for a table of four at a decent saloon would have been paid with 0ne 50,000 peso bank note. The people had a lot of money but a lot of money might not have even paid the parking metre.
So Carlos Salinas de Gortari was elected and he tricked everybody...because it was thought that he would be a lefty...but Dr. Jekyll came out and Mr. Hyde was sent to the showers. Carlos began to extend and strengthen Miquel de la Madrid's conservative economic measures. Among other things he and the Heroic Congress of the Federation decided to take off three zeros from the currency and its public appearance. One thousand peso coins, made of pot metal, were suddenly one peso coins that were almost pretty. All currency lost three zeros....as well as the bank accounts, CDs, deposits, bonds, etc.
Another little shock at the end of Salinas de Gortari's term left the peso pushed around a bit....and various issues, primarily straying at times from the balanced central government budget rule and the decision to pay off most of the foreign public debt, allowed to the peso to seek an equilibrium, about 5 years ago of between 12 and 13 to one American dollar. Remember, that by the measurement of 1950, that peso was actually valued at 12,000 to one or 13,000 to one. That is the price of socialist policies and over-borrowing.
That is the path upon which the United States of America HAD ENTERED. It is not the future. It is the here and now. So instead of picking up 13,000 pesos for my exchange to-day as I would have a year ago....the envelope contained on 11,900 and that was with the "preferred customer" bonus of 10 centavos per dollars. The rate for the common dumboes changing lesser amounts was 11.77 per dollar.
So there we are. I believe that it takes 1.07 American now to buy 1.oo dollar Canadian. It is well that the other countries away from us are, in the main, having worse buzzards coming home to roost. Precious little time remains for us to either correct the problem with massive, radical entitlements reforms....or to just turn out the lights and accepting the implosion of the Republic.
El Gringo Viejo
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