Back from South of the Border

I have been out of the loop for a couple of weeks and on the road in Mexico.  During this time I have been talking with Mexican Nationals, asking them how their economy is going.  Believe me they are suffering, right along with the rest of us.  From what I understand, the economy of Mexico is somewhat dependent upon the money that relatives working in the U.S. send back home.  Since the need for their labor here in the states has diminished, so has the income to the country.  I believe I heard somewhere that quite a number of the Mexican workers have returned to Mexico since there is little or no work here for them.

Additionally, the recent boom in Mexico’s construction in resort places has been tied directly to the amount of equity money that North Americans have in their homes — the funding mechanism for the construction of Americans’ retirement/vacation homes in Mexico.  As we all know, this funding source has run dry, probably for a long, long time.

Finally, the bad economy in the U.S. and Canada has caused most tourists who would normally spend time in Mexico, where vacations are relatively inexpensive, to stay home and hoard what little discretionary income they do have.  North Americans are no longer using their savings to fund vacations, they are using their savings for rainy day funds in anticipation of layoffs and cutbacks.

That being said, we need to dwell on the positive.  The Mexicans I asked were very happy with the election of Barack Obama as our new president.  They see this as a turning point.  Their advice to us and to him is that we should take care of our own problems and stay out of the rest of the world until we get our stuff in order.  I must say, I could not agree with them more.