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refusing to accept cash
| November 18th, 2016 at 6:38:35 AM permalink | |
| Nareed Member since: Oct 24, 2012 Threads: 346 Posts: 12545 |
My understanding is that there are more 200 than 500 notes. Mexicans are odd when it comes to notes and coins. People think notes removed from circulation are demonetized, but they're not. The central bank guarantees that all notes and coins can be exchanged at face value (of sorts). So if you come across a few dozen 50 notes from the 70s, the central bank will exchange them for 0.05 pesos each, that being face value after 3 zeros were dropped in 1993. A pre-1993 10,000 note is worth 10 now. Donald Trump is a one-term LOSER |
| November 18th, 2016 at 7:44:25 AM permalink | |
| Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
In March of 2010 the number of 500MXN notes passed the number of 200MXN notes. The Bank of Mexico publishes the latest figures (October 2016) Millones de Piezas 505 20 pesos (polimero) 501 50 pesos (polimero) 586 100 pesos (Familia F: papel y polimero) 823 200 pesos 1759 500 pesos 82 1000 pesos 4359 Circulacion de billete By value the 500 MXN banknote is 70% of the total value of all banknotes. The 1000 MXN banknotes is another 6.7% of the total value of all banknotes. Hypothetically, if Mexico were to "dollarize" at say 20:1 then they probably would have to take the 500 and 1000 peso banknote and replace them with US $20 banknotes which would be purchased from foreign reserves. Presumably they would wait until the USA starts printing Tubmans since then the banknote wouldn't have the face of a US POTUS. They would need about 2.4 billion notes to replace the 500 and 100 peso notes at value. 
They are probably worth more as collectibles at this point than as legal tender. USA and Canadian banknotes are good in perpetuity, which bolsters the collectible value of older high denomination notes, but most of that cash circulates in the collectible market. |
| November 18th, 2016 at 8:19:08 AM permalink | |
| Nareed Member since: Oct 24, 2012 Threads: 346 Posts: 12545 |
Yes, but there's need for caution. An old US $20 in terrible condition is perhaps worth more at face value. On Mexican currency, don't ever pay more than one peso for a one peso note. The world's lousy with them. The ones that circulated briefly are the new peso notes. This started in 1993 when 3 zeroes were dropped, but by 95 or so the name went back to merely "peso." So few were printed overall. I think I have a 10 Nuevo peso note, but I'm not sure. I did keep a pre-reform 5,000 old peso note. Donald Trump is a one-term LOSER |
| November 18th, 2016 at 10:58:25 AM permalink | |
| Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 | The Bahamas issues banknotes that are denominated in values equivalent to US dollars and are completely backed with US bonds. They do have a 50 cent note and a $3 bill.  Mexico's foreign reserves are now at about USD$180 million (down from USD$200 million last year) which is worth about triple the 1.2 trillion pesos in banknotes (US$61 million). The SWISH mobile phone payment system used in Sweden in place of most person to person cash transactions .  There is high interest in third world countries in this type of system (only without bank involvement). The difficulty in keeping banknotes safe against robbery, and the problems of having enough change for poor people makes electronic transfers attractive. |
| November 19th, 2016 at 11:35:28 AM permalink | |
| Nareed Member since: Oct 24, 2012 Threads: 346 Posts: 12545 |
Cool! :) Q: How does a Trump voter counterfeit $10 bills A: He takes a $100 and scratches off one zero. Back on topic:
Could Mexico print notes backed by silver? According to a hasty search, Mexico is the world's top silver producer, with about 5,400 metric tons (ie 5,400,000 million kilograms) mined in 2015. I know there are problems with that. One being who owns the actual silver, and another how much is silver worth in the market. Donald Trump is a one-term LOSER |
| November 20th, 2016 at 1:35:09 AM permalink | |
| Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
There is not nearly enough specie to back all the currency issued in a modern society. 11 million pesos per metric ton 5400 metric tons 59,400 million pesos During 2015 Mexico increased their banknote supply by 1,200,027 - 1,027,102 = 172,926 million pesos, which is roughly three times the worth of all the silver mined in Mexico. Even if there was enough silver , the metal can be sold much more profitably as jewelry which costs many times the price of pure silver. Switzerland was the last country in the world to back it's currency with gold and they changed their constitution in 1999.
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| November 20th, 2016 at 8:13:17 AM permalink | |
| Nareed Member since: Oct 24, 2012 Threads: 346 Posts: 12545 |
I thought as much. The other problem is there aren't enough greenbacks in the country to use them as a backing for currency, or even to dollarize the economy. In any case, Mexico is too big a country to let go of control over its monetary policy. A common currency might work, but the US and Mexican economies are still too disparate, and both are too deficit-driven as well. Donald Trump is a one-term LOSER |
| November 20th, 2016 at 4:18:29 PM permalink | |
| Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
If there was to be a common currency, it would come first with USA and Canada where Canada would be given a seat on the federal reserve. Virtually no one is backing that option. A common currency with Mexico is far behind. I should think that Canada, Australia and New Zealand would consider a common currency. Basically the USA does not want to share any decision making with anyone regarding currency issues. There are a number of currencies pegged to the US dollar. In addition Ecuador and El Salvador are completely dollarized. The list below is for countries over 1 million, as many of the Caribbean and Atlantic nations and territories are pegged to the USD (Bermuda, Bahamas, Belize, East Caribbean Dollar, Aruba). Turks and Caicos are dollarized. The full list of countries with fixed currency exchange rates, population greater than 1 million: (last updated Feb 2015) Country Region Ccy Name Code Peg Rate Peg Ccy Rate Since Panama Central America Balboa PAB 1 USD 1904 Cuba Central America Convertible Peso CUC 1 USD 2011 Venezuela South America Bolivar VEB 6.3 USD 2013 Oman Middle East Rial OMR 0.3845 USD 1986 Jordan Middle East Dinar JOD 0.709 USD 1995 Lebanon Middle East Pound LBP 1507.5 USD 1997 United Arab Emirates Middle East Dirham AED 3.6725 USD 1997 Bahrain Middle East Dinar BHD 0.376 USD 2001 Qatar Middle East Riyal QAR 3.64 USD 2001 Saudi Arabia Middle East Riyal SAR 3.75 USD 2003 Hong Kong Asia Dollar HKD 7.75-7.85 USD 1998 Dijibouti Africa Franc DJF 177.721 USD 1973 Eritrea Africa Nakfa ERN 15 USD 2005 Mexico does peg to the dollar for short periods of time, but eventually they let the peso float. |
| November 22nd, 2016 at 3:19:37 AM permalink | |
| Pacomartin Member since: Oct 24, 2012 Threads: 1068 Posts: 12569 |
At end of 2015 (in trillions) not adjusted for purchasing power USD$1.512 R$5.9043 Brazilian GDP USD$1.439 CAD$1.9916 Canadian GDP USD$1.054 MXN$18.136 Mexican GDP USD$1.190 AUD$1.6292 Australian GDP USD$18.037 United States GDP USD$11.382 Euro Zone GDP USD$4.147 Japan GDP USD$2.768 United Kingdom GDP Of the three trillion dollar economies in the Americas outside of the USA, Canada seems to be the only one whose exchange rate fluctuates. Brazil and Mexico seem to only go one direction over the long term. A big percentage of Africa pegs their currency to the Euro.
I doubt that anyone knows how many greenbacks are circulating in Mexico. In TJ I remember that he US Dollar was widely accepted, but I haven't been there in the last few years. I understand that the Mexican government in September 2010 enacted a law which basically restricts the use of US Dollars for almost all purchases inside of Mexico. These new laws were enacted because the war on drugs and the inability to track all these US Dollars floating around their economy which the drug cartels are using in a black market. But in any case, I doubt that $60-$70 billion is circulating in Mexico. I understood that in 1992 Argentina was circulating as much money in US dollars as they were in the Argentinian peso, which led them to consider simply dollarizing. Instead they began a new peso, also referred to as "peso convertible" since the international exchange rate was fixed by the Central Bank at 1 peso to 1 U.S. dollar and for every peso convertible circulating, there was a U.S. dollar in the Central Bank's foreign currency reserves. The older currency, the austral, had been used for the previous 7 years. The austral was replaced at a rate of 1 peso = 10,000 australes . The fixed exchange rate only lasted about 8 years. |
| November 22nd, 2016 at 10:22:19 AM permalink | |
| Nareed Member since: Oct 24, 2012 Threads: 346 Posts: 12545 |
I was last there in 80 or 81, and the question was often, jokingly, whether anyone accepted pesos for payment :)
It's like laws forbidding payments in gold. They can be sidestepped with accounting. You know, you exchange USD for goods, then pretend the customer paid in pesos and then sold you USD for the exact amount of pesos they paid. Donald Trump is a one-term LOSER |