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The Mexican Love for a Strong Peso

Published March 10, 2024 in Currency Issues , LATAM Politics , Mexico - 0 Comments

It´s been a while since I last published an article on here.

Been too busy moving every few months. 

But now that I am no longer doing that, I finally got some time here for those that read this blog.

Let´s get back to it with a simple topic: the Mexican peso.

Some days ago, I got talking with a friend of mine named Blayde.

During the conversation, he was complaining about how strong the peso has been these days.

Which for us gringos who make dollars, that means every dollar now buys less pesos.

Making everything more expensive for us every time the dollar gains strength.

Mix that in with rising prices that hurts everyone -- Mexicans included -- and life in Mexico more expensive than what it was before.

While talking with Blayde, he said something about how ¨it almost defeats the purpose of living in Mexico. I mean, I like a lot of things about Mexico. But there´s a lot of shit you got to deal with when living here also. Why live here and deal with stupid shit if Mexico gets too expensive?¨

And Blayde isn´t the only one complaining. 

Just last night, I saw gringos complaining about it in a Telegram chat as you can see here.

And the topic itself has gone into the mainstream for quite a while.

For example, we have this Tweet here where a gringo made an observation that more gringos will move to South America if the peso keeps gaining strength.

And he is in part right.

While I think Mexico will always attract a lot of gringos, the higher cost of living will push some gringos to look for a nicer Latin American life somewhere else.

And while I don´t see that tweet as offensive in anyway, it sure did piss off a lot of Mexicans online.

I remember seeing Mexicans calling for that gringo´s legal status to be checked and for him to be deported.

Even more recently, the topic of the strong peso came up again with Claudia Sheinbaum tweeting this here.

For those who don´t know, Claudia Sheinbaum is the most likely person to become Mexico´s next president.

And here she is clearly trying to take some credit for her political party as to why the peso is doing well.

Of course, she´s probably rubbing it in a little because we all remember how those on the political right in Mexico believed that current Mexican President AMLO would turn Mexico into ¨the next Venezuela¨ and how they believed the peso would be as low as 30 to the dollar.

Well, 30 to the dollar never happened but it did go as high as at least 22 if I remember right.

Above all anyhow, it is clearly a topic that Mexicans take quite a bit of interest in from time to time.

What are my thoughts? 

My Personal Finances

First, I don´t really give a shit.

When putting in together both the higher prices from inflation and the worse exchange rate, I´d say my cost of living has gone up by 200 dollars.

Now nobody likes to spend an extra 200 dollars to get the same thing.

But in practice that means I spend 800 bucks a month and not 600.

It´s not the end of the world for me.

Though I also think that part of the reason I am more calm about it is because I am comfortable -- believe it or not -- on living on as little as 800 bucks a month.

I don´t need much in life to be happy and I am a single guy without kids.

For gringos out there who have families here spending maybe 5,000 bucks a month or whatever much higher number, I imagine the worse exchange rate is costing you even more.

Just doing the math here:

At the previous exchange rate long ago of 20 to the dollar, your 5000 bucks would have given you 100,000 pesos to spend. 

Now to get that same 100,000, you have to spend 5,952 dollars (with an exchange rate of 16.80).

I probably would cry a little more if my cost of living went up by 1,000 dollars.

But that doesn´t even factor in the cost of living going up for them like it does for the rest of us.

So the total amount they are spending more today compared to a few years ago is even more than my pitiful 200 dollar increase.

As to how much more?

Who knows right.

Depends on what they spend money on.

Could be way more if this family was living in Condesa over the years where rent has gone up quite a bit due to gringos moving into Airbnb in that area where Mexican landlords love to overcharge gringos.

Still, you get the point.

How badly this exchange rate is fucking us over depends on the person.

For me, it´s not a big deal.

For others, it sucks ass.

Defeats the Purpose of Mexico?

Next, let´s address the sentiment from Blayde´s comment and from that tweet by Gringo Jake.

Does the poorer exchange rate defeat the purpose of gringos moving to Mexico?

Well, I agree with the tweet I showed that more gringos will choose other Latin American countries if Mexico keeps getting more expensive.

But does it defeat the purpose of Mexico?

Sounds kinda offensive, doesn´t it?

At least if you are a Mexican.

And I imagine many Mexicans read that tweet in a similar fashion.

Because I do know a lot of Mexicans are sick of the idea that Mexico is some cheap paradise where we white people can move in and have a great time while they don´t.

And a lot of Mexicans write online even about having some fantasy of wanting to rip gringos off just to fuck with them and their ¨cheap vacation.¨

So a lot of the issue that Mexicans have with our conception of Mexico as being a cheap place comes from jealously that we have it better than them in their own country and also with how out of touch such comments are with how hard it can be to live in Mexico on such low income in pesos.

Still, I do not believe in bullshitting people.

It´s always best to tell it how it is.

And yes, an expensive Mexico in many ways does ¨defeat the purpose¨ of living in Mexico.

Look, I love this country.

And I´m not your typical gringo who only knows about life in Condesa.

I have spent most of my years in Mexico outside of the gringo zone.

And there are many things Mexico has to offer beyond being a cheap place to live in.

Even if the peso was 10 to the dollar, that would not be bad enough to convince me to live elsewhere.

I might have reasons to consider living in other countries but a stronger peso would not convince me (for the most part).

Sure, if the exchange rate was 1:1, you would find me leaving pretty quickly (and sadly) while I find a new country to live in. 

But that´s an extreme example and isn´t happening anytime soon.

So if the country fits what I am looking for in life and if I like the country overall, I am staying.

But while I do like many things about Mexico, I never shy away from talking about its faults on this blog.

Blayde is right in that there´s a lot of fucked up shit in this place.

The greater risk to your safety from violence and crime.

At times third world infrastructure. 

Having to deal with people showing up late to everything.

More likely to get food poisoning.

Having to deal with way more stupid people.

On a rare occasion, dealing with people who are xenophobic and dealing with those that have a massive ass inferiority complex as it relates to both gringos and white people.

Among many other things!

But these negatives do not make me dislike Mexico.

Even still, I can see where Blayde is coming from.

The fact is that -- even though Latin Americans do not like it -- their ¨cheapness¨ really is a large part of their appeal.

Let´s just be real -- the cumbia music and the tacos are not enough to bring over 1 million Americans to live here.

Your culture has some cool things about it but tacos and cumbia isn´t that cool.

Too Expensive?

The other thing too that needs to be said is that gringos in the gringo bubble have a different idea of what is ¨too expensive¨ compared to gringos outside of the gringo bubble.

Most of Mexico is not anywhere near ¨too expensive¨ when compared to prices in the US.

It just isn´t.

Even in Mexico City, it is still fairly cheap.

I could get a fair apartment in a centric neighborhood that isn´t dangerous for say 7,000 pesos.

Or basically 400 bucks at the current exchange rate.

Remember Blayde for example? 

He´s renting in a non gringo area known as La Viga/Jamaica.

Has a two bedroom apartment that is decent for about 7000 in that area.

You can still live fairly cheaply here.

But if you are a gringo wanting to live in the most popular areas for gringos and tourists, then yeah cost of living has gone up to the moon.

Though those areas do not represent 99% of the country.

Now, to be fair, some of those popular areas are popular for a reason.

Some of them are overrated.

Others not so much.

So sometimes it makes sense why a gringo would want to stay in those areas.

And among the gringos who do, it is clear why they cry more about the peso than even what Blayde says (who again does not live in such areas).

So your perspective on just how expensive it really is due to the peso does depend a bit on if you choose to live in the gringo zone or not.

But let´s take a break now for a second on how this matters to gringos and talk more about Mexicans.

A Strong Peso is Good for Mexicans?

I guess it depends on which Mexicans we are talking about, huh?

I would argue a strong peso is not good for most Mexicans.

As to who it does benefit, some off the people who come to mind include:

1) Those who see this as an opportunity to buy dollars now with the belief the dollar will gain strength on the peso again. At which point you would convert those dollars to pesos and earn more money.

2) You are a Mexican planning a trip to the US and some of your expenses are now cheaper because of a stronger peso.

But Mexicans who fit the last two descriptions are not really the type of poor people that Claudia Sheinbaum and her Morena party claim to represent.

The average Mexican, as you can see here, does not earn very much. 

¨Asimismo, se reportó que en promedio, la mayoría de los mexicanos ganan alrededor de 7 mil 380 pesos al mes. Abajo de esta cifra predominan las personas que tienen un sueldo de 3 mil 690 pesos, mientras que en la media se encuentran todos aquellos que cuentan con un ingreso de no más 11 mil pesos.¨

So I highly doubt someone with that monthly income is buying hundreds or thousands of dollars to convert later.

And I highly doubt someone with that income is thinking of a vacation to Disney World (and likely would have difficulty getting approved for a visa).

In contrast, who does not benefit from a stronger peso?

1) Mexicans who benefit from remittances sent from family in the US.

In 2022 to 2023, 62 billion dollars were sent to Mexico from the US in remittances as you can see here.

And here is a map showing which states in Mexico get more of that remittancce money.

That´s a lot of people getting way less pesos now versus what they were getting before.


2) Tourism

Mexicans who depend on tourism money could see less money being spent by gringo tourists who find Mexico more expensive.

3) Those who would benefit from job creation related to nearshoring.

Obviously a stronger peso hurts companies establishing business in Mexico.

4) Those exporting goods abroad

A stronger peso also hurts Mexican producers that ship goods abroad to foreign consumers.

In the long run, why sell something in the US that came from Mexico if said product is now more expensive compared to a similar good or product you can import from another country? 

Now, having said all that, you can ask the obvious question:

¨Why do Mexican populist presidents and candidates care to bring up this point so much and why do Mexicans talk about a stronger peso with such pride?¨

After all, if it doesn´t seem to benefit the average person and in many ways hurts others, then why is it seen as a good thing if the peso is stronger today than yesterday? 

Well, I have heard in person and seen plenty of comments online from Mexicans who talk about this.

So let me summarize the main talking points I have heard.

Products are Cheaper!

This is one of the main talking points I hear.

That the peso has stronger purchasing power and so goods and products exported to Mexico should cost less.

And therefore the average Mexican consumer will spend less on daily things.

Sounds reasonable but I haven´t seen it.

And any Mexican out there knows that is not true.

Mexicans are struggling.

In fact, we gringos are the blunt of the blame for why cost of living is so high in the city even by Mexicans who do not live in the gringo bubble.

Mexicans who live in ghettos of Iztapalapa that blame us for the cost of a bag of doritos in their barrio or the higher cost of rent even though not a single gringo lives in their ghetto or has even heard the name of it.

So Mexicans definitely have not seen any obvious benefit from a stronger peso at the grocery store.

And when it comes to products you can buy at the grocery store, I have noticed certain foreign products to have shot up in price by quite a lot.

Not all of them.

But one classic example is Coca Cola.

Coca Cola now is way more expensive than most other sodas in the market.

What used to cost me like 30 pesos in Coca Cola now costs 50.

And it is a foreign product! 

And given how much Mexicans love Coca Cola as you can see here, you would think they have noticed that.

What about tortillas?

Something so essential to Mexican cuisine and locally produced obviously. 

As you can see here, the cost of that has skyrocketed.

Among so many other things in the market.

So I´m not really seeing where the gains from a strong peso are coming from.

Now, to be fair, maybe some would argue that the stronger peso has made inflation lower than what it would be otherwise by decreasing exports and increasing imports.

Perhaps. Logic makes sense.

But as far it relates to domestic politics in Mexico, I don´t see it as a win overall for the current president AMLO, Sheinbaum or their party in general.

At the end of the day, Mexicans are spending way more per month than before and they are struggling from inflation that occured under the current administration.

That´s the bottom line.

And given all the people negatively impacted by a stronger peso as I mentioned before, I do not see the benefits outweighing the consequences of a strong peso.

But let´s move onto the second point.

A Point of National Pride

I firmly believe that plenty of Mexicans see a strong peso as a point of national pride.

A month ago, I took an Uber from a town in Xochimilco known as Santiago Tepalcatlalpan.

Along the ride to Benito Juarez area, I got talking with the Uber rider about my time in Mexico.

And he brought up the strong peso funny enough.

Asked me my thoughts on it.

I shrugged.

Like I said, I don´t really care that much about the topic.

But then he went on what seemed like a 2 minute monologue talking about how great it is.

Because products are cheaper? No, he didn´t bring up the price of anything.

He seemed to take pride in how ¨Mexico´s economy is doing better¨ and ¨we are rising up to having an economy like those in Europe.¨

Or some shit like that lol. I´m paraphrasing.

And one thing he said that stuck out to me was how he emphasized that ¨we aren´t cheap no more!¨

Followed with a JAJAJAJAJAJA.

As I said way back, a lot of Mexicans -- especially those poorer like a random Uber driver -- have this resentment against those in the country who are living well.

Not just against gringos but white Mexicans and really anyone who is wealthy.

A lot of these folks also support candidates like AMLO and Sheinbaum because they feel they stick it to the upper class elites.

While these folks do have some solid complaints, a lot of what does drive this resentment is just envy if we are being honest.

Envy against those who got it good while you have a shit life.

And mixed in with some nationalism against foreigners who have a good life here.

Even if it didn´t benefit the average Mexican and even if it worsened the economy, plenty of these same people would love to deport all gringos.

Or at least fart in their direction so that their day is less comfortable.

And what a better way to fart in their direction than to have a stronger peso knowing that they can´t have it as good here as before?

And in this narrative against us gringos for having it so well here includes a belief that we are exploiting their country.

We are all colonizers.

It´s again typical populist rhetoric to blame all your personal life problems on the outsider.

So above all I really do believe a certain percentage of the Mexicans who love a strong peso -- even if they don´t benefit from it -- are happy about this development due to carrying the mentality described above.

Can AMLO Take Credit for a Strong Peso?

Finally, this is obviously again one of the biggest questions surrounding this topic.

As it relates to Mexicans anyhow.

Like I said, it´s obviously a point of interest for domestic Mexican politics.

Though quite frankly I don´t think it´s as important to the average Mexican as the politicans like Sheinbaum make it out to be.

The average Mexican is more concerned about the rising cost of living, femicide, the cartels, violence, corruption, etc.

If the peso really did shoot up to 30 to the dollar, it would make news and political opponents of the Morena party would talk about it.

But it wouldn´t be something that changes how people vote in my opinion.

As to if AMLO can take any credit for it, I would say his influence has been exaggerated for political points.

AMLO does not control the Central Bank of Mexico nor does he control policies in the US that influence the strength of the dollar.

He has some influence on some matters -- such as fiscal policy and the legislation that his party passes -- but I would argue his influence is limited on the exchange rate.

Anything Else?

There´s way more that could be said on the matter.

You obviously have people trying to predict just how strong the peso can get.

I have seen some professional analysis suggest online that the peso will weaken back up to 18 to the dollar by 2025.

You got doom and gloom gringos also who seem like average Joes that probably don´t know what the fuck they are talking about saying the peso could be as strong as 8 to the dollar.

But who knows.

I´m not going to pretend that I can predict that.

Anyway, that´s all I got for this topic.

Above all, I don´t really give a shit if the peso is at 16.80.

But maybe you do.

Write a comment below if you wish.

And thanks for reading.

Follow my Twitter here.

Best regards,


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