Dollar Rebounds As Trump Talks Trade: "Major Border Tax" Is Coming

Tyler Durden's picture

Having dumped billions last week to defend the peso, one wonders if the sudden rip higher in the peso (after tumbling on Trump's comments) is yet another intervention by Banxico?



While this would not surprise us, there was broad USD weakness as markets were disappointed by Trump's lack of discussion regarding trade... but once he mentioned it...

"There will be a major border tax on these companies that are leaving and getting away with murder and if our politicians had what it takes they would've done it years ago.''

USD surged.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
hedgeless_horseman's picture

Looking for a summer vacation value?

This June, why not load up the Wagon Queen Family Truckster?

Stop by Marfa on the way to your cheap and getting cheaper vacation in exciting Mexico!


Then head on down through Big Bend National Park to see construction of The Great Trump Wall.

Trade those King Dollars beer.

Raffie's picture

Them Refried Peso's are coming along just fine.

My message to Mexico: Just build the damn wall and your Peso may return to nornal.

Lets buy Vicente Fox Quesada a shovel so he can start digging the footing for the wall.

hedgeless_horseman's picture


Trump's wall is going to look so interesting running right through 118 miles of that National Park...

Can't you just imagine it?

King Tut's picture

If it was up to Orange Jesus the whole natural world would be one of his BS golf courses

The Saint's picture
The Saint (not verified) King Tut Jan 11, 2017 12:41 PM

On another topic, I guess we won't be hearing from our Bitcoin promoter Drabin (or whatever is name is) for a while.  Bitcoin is getting hammered again.  It's down in the $750 range now.  Not an investment for the faint of heart for sure and no way to hedge as far as I know.


Justin Case's picture

I don't wish anyone to lose money, other than those swindlers that call themselves capitalists.

I still say that BTC is just a pyramid scheme. It's not useful in commerce b/c it's too volitile. Now imagine a shop keeper got paid in BTC yesterday and today he is looking at selling BTC to raise USD to purchase inventory? Bad move. Now what? Take the loss or use funds from the bank account and hope BTC recovers? You have a 50/50 chance to lose moar.

BTC is like fiat paper currency. If faith is lost in it's ability to function as money, it returns to it's intrinsic value --> ZERO. The trading is just like a Mexican stand off, with one exit door. He who blinks first loses least.

I only wish Drabin well and hope that his over enthusiastic attitude sees reality now. BTC is still in it's infancy and will experience growing pains and if the public thumbs it's nose at it, it will be no longer. Entering the same dust bin as hundreds of other Gov't failed currencies. There are fundamentals of what money is and what currencies are. Drabin will have to learn that. To me he comes across as a Generation X. Little life experience but thinks he already knows everything. Incidents like these make people humble.

Best of luck Son.

hedgeless_horseman's picture


Mexicans are totally unable to navigate their native landscape.

Stormtrooper's picture

Hey!  Nice place to build some machinegun nests.  Don't need no stinkin' wall there.

Raffie's picture

So you would rather have open boards for disease riddled illegals, terrorist and gangsters to name a few to get into America then to have 'some' security?

People like you talk this till a loved one dies for the ones I mentioned that are coming across the boarder. Then they are F THEM.. WE NEED A WALL OR SOMETHING. The beauty of the landscape quickly fades. 

In a perfect world I would agree with no wall, but last I check out world is getting worse every day.

So get your shovel and start digging the footing for the wall so we can get this done.



hedgeless_horseman's picture

So you would rather have open boards for disease riddled illegals, terrorist and gangsters to name a few to get into America then to have 'some' security?


I don't think a wall will work, unless it is manned 24/7 by armed men ready, willing, and able to shoot those that try to scale it or dig underneath.

And even then it will not work.  The border is too long.

We need to start by enforcing the laws already on the books.

There needs to be real consequences enforced.

Raffie's picture

Obama did mass damage to our boarder and people who guard it.

The big issue I see is the criminals who been deported many times. Esp the murders.

Israel does in a way have the right idea about boarders. Shoot 1st ask questions later.

Might need armed drones to patrol the area. If someone who lives close to the boarder helps with capture of boarder crossers should get money to help. After a boarder crosser been deported 3 times (depending WHO they are and what crimes they have committed)  and they get caught the 4th time maybe they get eliminated to send a strong message.

Somewhere the law has to come down hard and not a wrist slap.


I wish i could vote for this more than once.

DeathMerchant's picture

Looks like prime Predator/Hellfire country to me.

Justin Case's picture

We used to call those wagons "a woody" Today the meaning has evolved into something else.

bullet's picture

I guess they really are paying a price for the wall...

svs9000's picture

The more they intervene, the more shit they cause...

it will all blow up eventually...

BandGap's picture

Does a donkey shit in the desert?

I get the sneaking suspicion that there will be more interventions to come, by Mexico and other countries.

Rich Stoehner's picture

Long Peso.......not

Blankone's picture

Looks like more than 3 attempts, although the other were less dramatic.

you can see a battle being waged.  I think Mexico knows if this continues it is getting closer to causing internal social instability.  Maybe give the cartels even more power and influence.

wren's picture

Cartels only have power and influence becuase we buy their product. The cartels will lose everything if we start fortifying our wall.

Blankone's picture

The US will not stop buying drugs from Mexico due to the wall.  They will still come in.  The wall will do a lot of good to stop the flow of people and I have long supported building one.

Making marijuana legal has caused competition and decreased criminal orgs activity in that sector where it is legal.  Although there is some illegal activity in growing and exporting to other states where it is not legal.  But there too, the bad actors compete against the major cartels and remove their profits.  Who in the chain wants to deal with hood rats or go there when they can buy from less violent people?

The easiest way to hit the cartels is to make weed legal.  Next make cocaine legal (yes a bold move) and that will drive down prices and remove the hold crack (and maybe meth) has.  A less bold move is to make MDMA/extasy legal.  They say 4% of Mexico's people use it (I doubt that myself) and it has not faded away in the US but susposedly it has increased.  Make it legal, get it pure, remove the cartel.

SgtShaftoe's picture

The cartels own the mexican government.  The CIA owns the cartels.  A wall will not prevent a CIA Cessna Citation from entering the country, or a .mil C5 Starlifter controlled by the CIA. 


End the Fed, End the CIA, End the NSA

asteroids's picture

Mexico has plenty of oil and cocaine billionares that can be called on to defend the Peso.

power_shift's picture

That money if flooding over the border faster than the illegals. Smart money isn't going to stay in shitty peso form.

SgtShaftoe's picture

I have a couple 50 peso coins.  But they're very shiny. 

Soul Glow's picture

Ironically this is what is needed for Mexico to have a competitive currency via trading in the neo-Keynesian playbook.  Krugman should, but won't, say this is bullish for Mexican trade.  

Just as a disclaimer a lower priced currency is good for trading because it makes goods cheaper to sell, increasing trading volume.  Page 296 from "I'm a Dumbass Economist" written by Ben Shalom Bernanke.

King Tut's picture
King Tut (not verified) Soul Glow Jan 11, 2017 12:19 PM

Just like Greece and Italy and Spain would greatly benefit from getting off the Euro

mosfet's picture

Border taxes = Massive inflation

As usual, panicking into the dollar is exactly the opposite of what 'idiot traders' should be doing.

King Tut's picture
King Tut (not verified) mosfet Jan 11, 2017 12:32 PM

The Fed raising rates and worldwide demand for USD is not a recipe for inflation.

barysenter's picture

Replacing NAFTA jobs with USA jobs and getting 90 million off the dole = Massive sustainable dividend

StreetObserver's picture

Not if the products are then made in the U.S.

Social cost inflation is caused by the 20% of Mexican working age males in the U.S.

Deportation of illegals frees up apartments, jobs and vehicles. That equals less demand for them which means lower prices for them.

SgtShaftoe's picture

Currency War ------> Trade War----------> Hot War


                                You are here

gdpetti's picture

Well, the PTB have been pushing this 'hot war' factor for the last decade or so, but Putin hasn't been very cooperative in that regard... guess he doesn't like how we play in the playground... must have had a bad trip in the 90s, hunh?

What is missing is the 'cosmic' factor that could intrude in this logical historical sequence of events... it's the '8 ton gorrilla in the closet with us, that's only started to wake up recently.... and it's gonna be hungry.