Edited by board administrator February 17, 2016, 10:15 pm
Hi Larry (you in quotes),
"What has the fact that a few foreigners who rent vacation rentals in US
dollars got to do with Mexican inflation?"
Probably not much by itself. I don't want to summarize the article
particularly when it contains words like "a surprising and little-understood
transformation" but the ideology, economics or what ever the word is is in there.
"Do Mexicans give a flying frigate that one foreigner charges another
foreigner in a currency one or both of them doesn't even use.The fact
that scholarships were raised is US dollars means zip to them."
As was pointed out in a post above why should the locals have to do a
conversion to donate to a local cause in their own country? Even that
is secondary to the goal of no inflation by only dealing in pesos.
"Daniel, do you encourage your clients to list in pesos. Maybe you should
because guess what, Canadians won't be buying".
Are the Canadian's buying with the price in USD? They would be better off
with a price in pesos.
I have worked on applying this Peso topic to real estate, it was new to me
and I wished for a link to someone who figured it out but didn't find it.
So into the rabbit hole we go, I have worked to keep this as simple as
A seller paid $CAD for a home and wants to sell and receive $CAD, let's
call $CAD the base. If the price were in pesos it would have to be constantly
changed to meet the base.
Separate from that, with the price in USD the $CAD seller can reduce the
USD price and end up with the same CAD.
"It is true that vacation rental prices should be posted in pesos."
Let's use three rental scenarios.
1) I want to cover the upkeep and make a little to spend when I come
to Mex - peso base - fixed peso is ok.
2) I took out a CAD loan to build and have to make the payments
- CAD base - (charge more or rent more).
3) My home is an investment, I want X$ profit from rentals - CAD base -
(charge more or rent more)
If the price were in pesos one would be more likely to rent more due to
the exchange rate (the no inflation thing).
And separately let's use 2 realities.
1) Rental price in USD - Canadian's and Mexicans have to do the conversion.
2) Rental prices in Pesos - Canadian's and American's have to do the
I prefer the no inflation point to the we are in Mexico point but using
just 1 and 2 above I say let other than Mexican's do the conversion.
"People can "vote with their feet" - go rent a place listed in pesos.
The others will get the message".
Hopefully that will be the outcome of this thread. It takes some
work to think it through and learn but ain't communication wonderful!
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