Thursday, February 05, 2009

Big Money

This probably sounds like good news, right?

The Mexican peso, one of the world's weakest currencies since the global economic meltdown began in September, is nearing the 15-to-the-dollar mark -- a stunning loss of value in just six months.

The peso has fallen nearly 32% against the buck since August. That’s a boon for U.S. tourists heading south, but it’s devastating for Mexican consumers’ purchasing power: They have to shell out significantly more pesos for the same dollar.

Okay, so it sucks for Mexicans, but if all your money is in US dollars in a US bank account, then one day you wake up and discover that you're 32 percent richer. Unfortunately, the only way to really take advantage of this is to keep withdrawing cash from the ATM. Every time the peso drops a little more, we run down to the ATM and fill up the wheelbarrow like a scene out of Weimar Germany. It sounds like a good deal, but the house is starting to look like Tony Montana's rec room. Bales of money everywhere! We're propping up an uneven table leg with a stack of 200s, and lining the litter box with 50s. We've got more cash in the freezer than a Louisiana congressman.

Thank god someone's trying to stop the madness.
Mexico's central bank surprised investors with an intervention to boost the peso on Wednesday, selling U.S. dollars directly to market players after the peso was battered to a record low on fears the U.S. downturn is driving Mexico into recession.

It's about time. The poor perro was almost crushed to death under a landlside of 100s this morning.

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