LIVING THROUGH A CURRENCY DEVALUATION

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Lonerangersilver
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LIVING THROUGH A CURRENCY DEVALUATION

I was managing an American subsidiary of a successful large US Company in Mexico. It had been a financial turnaround for our team. Cash flow had accumulated in our bank in Mexico and corporate didn’t want the money repatriated to the US. Although we had already paid a 35% income tax to the Mexican government, we would have to pay an additional 30% exit tax to repatriate the money. In addition, we would have to pay high fees for the peso/dollar exchange, in order to make the transfer. The company wanted to expand our successful business and so we decided to keep the money in Mexican pesos to be used for further expansion. One morning, as my wife and I were on a trip driving on the highway, we heard a national message from the President of Mexico, Luis Echevarria, one of the most corrupt presidents in Mexican history. “It is a lie that we are going to devalue the peso,” he said.

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http://lonerangersilver.wordpress.com/2011/06/20/living-through-a-currency-devaluation/

Edited by admin on 11/08/2014 - 06:04

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lilbromarky1
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This was a great read.  I'm

This was a great read.  I'm surprised noone else bothered to read or comment.

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Pining 4 the Fjords
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Kudos for this excellent piece

Outstanding account, and all the more powerful because it is first-person and you actually lived through this.  This section struck me as being especially revealing :

"Everyone in the country was in shock. People’s net worth had devalued over 53% overnight. The value in savings accounts dropped in half and neither merchants nor consumers knew how to react because they had never been through something like it before."

Good times!  Gee, I can't wait until I can live through this too... ok, maybe I can wait a little.

RuNuts
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Caught it when you posted it

Caught it when you posted it on Turd's blog, posted it in other places as well as passed along in email to a few who haven't seen the light.

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