Peso Plunges To Record Low After Trump Tweet

Tyler Durden's picture

The Mexican Peso is plunging once again this morning - very close to all-time record lows - as fears spread that Ford's decision yesterday may become the norm following president-elect Trump's tweet that "this is just the beginning."

Bloomberg notes that Ford’s move, which follows a similar decision by United Technologies Corp.’s Carrier in November, makes it all the more important for Mexican President Enrique Pena Nieto to dissuade other foreign companies from following suit in the face of Trump’s wrath. Mexico’s northern neighbor buys 80 percent of the Latin American nation’s exports, and luring U.S. companies is a cornerstone of the government’s plans to modernize industries from construction to oil.

“A lot’s at stake, considering that since 1999 close to 46 percent of foreign direct-investment flows into Mexico originated in the U.S.,” said Alonso Cervera, chief Latin America economist for Credit Suisse Group AG. "Investors will likely be anxious to see which other companies may do the same."

The damage caused by companies buckling under political pressure offers a preview of the ripples that could jolt Mexico’s economy should Trump also follow through with threats to tear up free-trade agreements and to build a border wall. Economists in Bloomberg surveys have already cut their median forecasts for GDP growth in 2017 to 1.7 percent from an estimate of 2.3 percent before Trump was elected.

 

But, as Bloomberg details, the economic outlook for Mexico remains challenging after disappointing results in 2016. Tighter global financial conditions and uncertainty about the future of bilateral relations with the U.S. since the election of Donald Trump in November are a drag on investment. Potential trade and immigration-policy changes in the U.S. may prompt additional downside risks for activity and external accounts in 2017. Tight monetary and fiscal policy to contain accelerating inflation and rising public debt should also weigh on growth.

A weak and more competitive peso already support net exports, but the relief could be limited if bilateral trade with the U.S. comes under pressure from potential protectionist measures. Higher oil prices are also positive, but the upside is limited by falling output and lingering problems in Pemex.

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Boris Alatovkrap's picture

This is what is happen when national economy is spiral down commode like corrupt excrement.

flaminratzazz's picture

Time for  a drive and get my teeth fixed

 

Looney's picture

 

Draghi and Kuroda have been trying to sink their currencies for years. Trump takes the peso down with one speech and two tweets.

Abe and Juncker should start lobbying Trump to build the wall with Japan and the EU, too.   ;-)

Looney

flaminratzazz's picture

no shit there .. the tourists will be flocking in for the 50 cent donkey shows

Boris Alatovkrap's picture

Boris is very funny joke about donkey, goat, and two Muslim terrorist to sneak across Mexico boarder… but is now forget which end is which.

Raffie's picture

Mexico might have to bring back the donkey shows to generate some extra cash.

Think of how cheap TACOs will be. I want to corner the TACO market.

I'll be a Taco Tycoon.

flaminratzazz's picture

except it is 6 degrees below fvkin zero!

 

flaminratzazz's picture

all I can do is feed this fire breathing money eater.

DogeCoin's picture

Clock is ticking Mexicans. I know ya'll are still flush with silver. You know what you need to do, but I understand it's just too hard to let go of that fiat trash.

fockewulf190's picture

Clock is also ticking regarding Normalcy Bias at the corporate level.  Right now, they are merely feeling the tremors of change, but the earthquakes are coming.  Pay attention to the warnings and react accordingly or your business model may be crushed to a pulp.  That would make a good Trump tweet.

Ecclesia Militans's picture

Fleeing Foreign Investment + Lack of Transparent Institutions + Large Trump Wall with Parapets, Sallyports & Lanes of Fire = BANANAS!

In other words, HFT bows to The Donald.  (I wish I could take credit for that concept but another ZHer posited something similar in a post a few days ago.)

Publicus's picture

Well what do you expect? Mexico is CANCELLED.

Rich Monk's picture

Build that WALL! NOW!!! Mexico will self destruct.

SDShack's picture

If Mexico was smart, they would call Trump and admit he won and tell him they are willing to pay for the wall. Hell, they already have paid for it many times over already just with the drop in the peso the last year. Truly stupid that Mexico refuses to acknowledge the reality that they are bleeding out like a stuck pig. If they don't capitulate, Trump is going to gut them like a dead fish.

Clara Tardis's picture

Less Trump, more that Eric Holder isn't around arming the cartels to keep the "economy" booming (pun intended). Mexican economy defined as drugs, coyotes, corruption, arms etc...

Stan522's picture

Much to my disappointment, it hasn't shown up in tequila prices yet.....

juggalo1's picture

You know, guys, this is not a good thing.  I work in Mexico transportation, and we are really struggling to find cargo to export to Mexico due to the falling Peso.  Imports are strong, but exports are getting killed.  Isn't that the opposite of what Drumpf intended?

New_Meat's picture

This is so intricate on so many levels.  Like, for instance, did Trump just convince the Mexicans (in <140 characters) that maybe it WOULD be a good idea to pay for a wall?  I'm sure that who will pay for and get sponsorship rights to the "Big Beautiful Door" can be negotiated.

Jeepers Creepers's picture

Good, Mexico has done far more damage to the United States than former countries like the USSR ever did.

 

They were perfectly happy making the USA another 3rd world shit hole.

Soph's picture

Actually, AMERICAN'S need to finally take ownership for their actions.

They vote in the those that rule them. They vote with their wallets when the buy the cheapest products made outside of their country, etc etc.

The biggest problem today is that people refuse to suck it up and be responsible for what they do. It's much easier to blame the nanny state, the nasty corporation, or anyone but themselves.

Everything that has happened is exactly what is deserved.

SummerSausage's picture

Americans have done a lousy job of voting out political crooks and liars but the bureaucracy that has been allowed to build and take over how we conduct every aspect of our daily life is even more horrendous.

pherron2's picture

I'm all for accepting personal responsibility. Not in this case however, since I have nothing to do with the manufacture of coke and pepsi.

Snout the First's picture

What I just cannot understand is why so many American citizens of hispanic ancestry are so bound and determined to turn the United States into the same cesspool their parents and grandparents fled from.

Grimaldus's picture

Mexico has taken happily advantage of the US for quite some time. We are long past time for a reset to fair for both, instead of the US getting ass-reamed.

 

 

 

Grimaldus

 

Salem Villager's picture

next up-make Walmart pay for the uninsured!

Blanco Diablo's picture

‘Mexico must pay for the wall’

Mexican emigrants are among the largest senders of remittances worldwide.

The majority of migrant Mexican workers send most of their salaries back to Mexico to their families. According to the World Bank, three of the most frequently used remittance service companies – Western Union (6.1%), MoneyGram (6.64%), CitiBank (14.59%) charge 9.11% on average, excluding the conversion fees.

Surcharge these transactions with a "Wall Tax"!  Funding Solved.

SummerSausage's picture

They sent $2 billion last month.  At that rate, by confiscating their remittances, they can pay for the wall in less than 6 months.

GraveDancer's picture

Peso is Pissed off.

Here's why>  Book> The Road to World War III: "Can the dark forces of anti-freedom "Trump" humanity?"


Kindle> https://www.amazon.com/Road-World-War-III-anti-Freedom-ebook/dp/B01MT31AXZ/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1483002008&sr=1-1&keywords=Road+to+world+war+iii

bornlastnight's picture

At the current exchange rate of 21.4 Pesos to the greenback, a job paying $8 per hour under the table to trim your lawn is looking more attractive to illegal Mexicans.  More illegals may swim the Rio for these "lucrative" jobs in the U.S. as the Peso swirls down the shit chute.

Unentended consequences....Just sayin'...

toady's picture

I know more than a few that are very happy that they can send nearly twice as much home to mama that just a few months ago... but the prices down south are starting to spike (gas, tortillas, etc.) so that'll even things out....

SummerSausage's picture

Are the companies "buckling under political pressure" or doing what's best for their bottom line?

I'm betting on the bottom line: lower taxes, less regulation, a stable political environment with a pro-business, pro American president (finally) and an educated and highly productive workforce.

Mexico is run by drug cartels and corrupt politicians.

FreshOutaSumfinForNufin's picture

The USA is also run by drug cartels and corrupt politicians.  We just put prettier vaneer on everything.

Smufty's picture

Legalize drugs and we will be able to buy Mexico for less than the Dutch bought Manhattan.

 

Kirk2NCC1701's picture

Things that back the Peso:

- Cheap labor

- Limited Environmental laws and easy biz regulation that favors Neo-feudal Oligarchs 

- Cheap Produce (fruits, veggies)

- Tourism

- Silver mines 

- Branch plant economy 

- Drug money from US 

The Trump Administration will kick the stuffing out of the last two points.

olebugger's picture

- Cheap prostitutes

- Cheap narcotics

BitchesBetterRecognize's picture

I do believe Trump is doing a big favor to Mexico too when all those USA manufacturing companies leave, by exposing their government for their big incompetence & indifference about their own internal problems - IOW Mexico could well be a wealthy country as the USA & Canada IF only a proper leadership & bold policies were implemented FOR the Mexican people, and not for the few running the country there, profiting from raping their country at the mercy of powerful foreign corporations ..... as it was once the intention of Obozo here in the USA...     

MEFOBILLS's picture

Mexico is a multi screw job.  Actors in the U.S. are screwing over Mexicans, and actors in Mexico are screwing over Americans.

It is better to look at is a class war, with some race thrown in.  Let's also not forget our Zionist friends - they are alway prominent players.

Lets go back in time shall we:  The Green revolution (early 60's) is created as American genius figures out how to get more yield from crops. This information goes to mexico.  Mexican farm yields increase dramatically.

If you feed they will breed.  Mexican's do the dirty and lots of chillen are born.  These chillen be the workforce supposedly for NAFTA Maquiladora's.  Bill Clinton, CFR agent, screws over the Maqis' with MFN trade status for China and undoing Glass Steagall.  Later, out of work Mexican youths then Mexinvade the U.S., rather than work in the now defunct maquiladora system.

Prior to Bill Clinton's usurpations, Mexico gets a red white and blue hard one up their rectum by the banking class, especially goldman sachs (of course).  After the 73 Kissinger Saudi agreement, petrodollar system is born.  This means that petrodollars must vector back into Western Banks and markets.  Banks then become flush with dollars, and that means they can issue EVEN MORE LOANS.  Fractional reserve allows more loans than captial base, and capital base is now increased with Petrodollar reserves.

Our bankster (((friends))) then get Mexico converted from third world to emerging economy status.  This new status allows more dollar loans to Mexican leaders.  These leaders take the loans and they cycle into and out of their bank accounts, but not to Mexican people.

See Perkin's book, "Confessions of an economic hitman" to get an idea of the mechanism.  Dollar loans need to be paid in dollars, and Mexico has to collapse the Peso exchange rate, to then acquire dollars, to then pay off banksters.  This collapse mechanism is done at least three times.  Every time it is done, insiders in Mexico are warned in advance, so they move into dollars to protect their wealth.

These insiders are shabbos goy's working with the banking elite in Wall Street. Mexican insiders move their wealth into dollars before the peso devaluation.  After the devaluation, they swoop back in and buy up Mexico for cheap.

The upper class in Mexico, especially those related to Wall Street Finance, become the new elites.  It is a class war.  The same red white a blue zionist finance shaft in your rectum, is the same one in the average peon mexicans.  Mexico becomes an Oligarchy as land, patents, and business falls into finance hands.  The wealth means of Mexico fall into a few hands... the insiders.

The low IQ peasant class - now kicked off their land, and there are many now due to the green revolution, head out to look for jobs.  They do not find them in proper numbers, and then head EL-NORTE.  (By now, job offshoring to China is in full swing.)  Mexicans are not making Zenith TV's in Mexico - that Maqui system fails.

So, it is the same over-lord mechanism that uses finance games to take rents, which is screwing mexico and also screwing middle America.

Mexinvaders in the U.S. shift onto the public purse via public schools and hospitals.  The cost of Mexicans in America is socialized.  This means that captains of industry make out ok, but the middle class in america is paying and subsidizing Mexico.

In both Mexico and the U.S. the upper CLASS is winning out against laboring middle class and peasants.

Wrap in some racial bullshit, like Texas belongs to mehico, and La Raza - and it is easy to convince low IQ peasant invaders, that southwest of America is theirs.  (Even though Mestizo's as a race didn't even exist till recently.)

 A little diversion and confusion for sheeple is good for overlords, and they continue their theft game while nobody looks. 

It always gets back to the finance game and maneuvering by our ((friends.))  They created the debt spreading system. They are rent seekers deluxe .. it is the family business.  Anybody who says otherwise is ignorant or not paying attention.

www.sovereignmoney.eu

 

DaBard51's picture

Compare Mexico with Vietnam, Taiwan, Korea (S), other emerging nations over last 25 years.

Sad.  Not the worst; but still, so many resources, so little progress.

 

 

 

When nine hundred years old you become, look this good you will not.

sheikurbootie's picture

Canada is NEXT bitches!  NAFTA is finished.  It's a giant blowing sound, instead of a giant sucking sound.

olebugger's picture

Bomb those wetbacks back to the stoneage! Go Trump!