Your Mexico trip is more costly: USD continues losing purchasing power vs MXN

RonJax2
Monday, April 15, 2024 8:39 PM
[view link] The article does not specifically discuss the impact on la Zona Norte, but there's a real impact. Like the vendor in Tijuana they mention, for HK management and chicas a like, this feels to them like the dollar is being de-capitalized. (The rise in the peso is probably great news for most mexicans, just not for those that accept dollars for services, like in TJ and la ZN.) Also in the news today was this: Hedge Funds Pile Into Mexican Peso, Fueling World’s Best Rally | [view link] So, this sucks, and it doesn't seem like this trend will abate soon. My advice would be to plan a visit soon because waiting even a month or two might mean more expensive fichas, arribas, rooms, etc.

9 comments

definitely been the trend the last couple years now.
Jascoi
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a month ago
2020 - the year of COVID. Since 2020 every single thing I do costs more than it did inside or outside of this country. Prices on certain things have started to come back down but very few things are back to the prices they were of 2020. To me it sounds like the OP understands the price increase but is also adding that he feels Tijuana not only increased prices but is also price gouging. This may be an off the wall theory but do you think there’s any correlation to the exorbitant price increases and the cartels getting involved? Seems like the news articles and talk on here about club managers getting “offed” and cartels wanting a piece of the action coincided with the price increases around the same time?
shailynn
•
a month ago
This probably sucks for those who visit the ZN often, but for people like me who visit a couple of times in a year it doesn't matter much.
booji boy
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a month ago
@shailynn: The price increases haven't been exorbitant, but they are trending up. The cartels have always been involved in this business. What changed is Covid, inflation, exchange rates, and capex that the HK owners have sunk into the club and hotel that they're trying to get a return on. The girls are charging more because they can. Calling this price gouging is stupid IMO... no one is going there under duress.
booji boy
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a month ago
@shailynn: > To me it sounds like the OP understands the price increase but is also adding that he feels Tijuana not only increased prices but is also price gouging. The increased prices in general don't feel like gouging to me. I think it's a rational response from any business in this situation, where they primarily take a foreign currency that's losing value versus the domestic currency. I think it's exactly like @booji is saying. What does feel like price gouging, to me, are bar fines. Those didn't exist in 2020. When I first started going in 2022, they were only infrequently enforced and were $50/chica/hour. Now they START at $110/chica/hour but if it's busy will try to charge you even more, and it's rigorously enforced. The main pretext of these barfines wasn't USD/MXN prices though, it was a serial killer who preyed on women at HK. As a result the club had to hire the management staff needed to track chicas in the rooms, so of course they're going to have them enforce barfines too. That one deplorable psycho ruined TLN at HK. > do you think there’s any correlation to the exorbitant price increases and the cartels getting involved The Cartels have always been rumor to be involved, that's not a new thing. And, you can't eat avocados without indirectly benefiting the Cartels. https://www.courier-journal.com/story/news/crime/2023/02/08/rival-drug-cartels-profit-mexican-avocados-us-police-work/69840227007/ They're everywhere and they don't stop having Cartels in Mexico, but I doubt they're driving price increases. I would observe that the rising MXN/USD rate is likely to the detriment of most Cartel operations, because like the chicas at HK, they're doing business in USD.
RonJax2
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a month ago
the rising HK prices and new rules as well as the 'bandits with badges' have definitally reduced my visits...
Jascoi
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a month ago
for nine years i averaged two (or more) visits every month... now its about one visit every three months.
Jascoi
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a month ago
Any market with no competition and some demand is a monopoly and prices will increase due to human nature or pure greed. Prices will stabilize if Adalitas ever reopens or other competition enters the market (a tall ask if the cartels are involved).
623
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15 days ago
It's very simple. The Bank of Mexico has raised rates from 5% to 11% in 2023. The FOMC has held rates around 5.5% for about a year now. Barring any weirdness, that WILL result in a stronger peso vs USD. Investors get a free 5% when they borrow at 5.5% and invest at 11%, plus they get the currency appreciation. This is called a carry trade, and it's exactly the inverse of what's happening right now with the USD vs the Yen.
5footguy
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15 days ago
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