- 02 Jul 2018 05:05
#14929380
Mexico's Lopez Obrador Wins Presidential Vote as Rivals Concede
Generally, situations like this have a happy honeymoon for a year or two; then, things tend to go to shit. Sometimes very quickly. Sometimes slowly. There was quite a lot of celebration in Brazil when Lula da Silva was elected. Then, things started going South for Brazil, but somewhat slowly. By contrast, there was similar fanfare when Hugo Chavez won in Venezuela. There, the country went from high inequality and a burgeoning economy to an economic crash where basic necessities cannot be met. It's so bad that it's cheaper for Venezuela to import energy than extract it from their enormous wealth of natural resources.
This is the first time Mexico has elected a socialist since they started pulling out of their third world status.
It will be interesting to watch. People who do not understand geography do not understand why countries like the United States, United Kingdom or Germany have significant success where other countries struggle. Geography has a lot to do with it. Many countries adopt socialism--whether mixed or otherwise--and do not have a tax base to support it. Mexico doesn't have a sufficient tax base to support a massive welfare state, and an attempt to erect one is likely to lead to what has always happened when tried: massive debt followed by hyperinflation. I think long term, this means that the peso will eventually be a good short.
Keep an eye to the long term here. I'm betting this isn't going to be good for the peso.
While I think socialism is going to ultimately be worse for Mexico economically (don't worry, they will be sure to blame the United States for what is to come), I do sympathize with the electorate in throwing out their establishment. I enjoy seeing that happen in the US too.
Generally, situations like this have a happy honeymoon for a year or two; then, things tend to go to shit. Sometimes very quickly. Sometimes slowly. There was quite a lot of celebration in Brazil when Lula da Silva was elected. Then, things started going South for Brazil, but somewhat slowly. By contrast, there was similar fanfare when Hugo Chavez won in Venezuela. There, the country went from high inequality and a burgeoning economy to an economic crash where basic necessities cannot be met. It's so bad that it's cheaper for Venezuela to import energy than extract it from their enormous wealth of natural resources.
This is the first time Mexico has elected a socialist since they started pulling out of their third world status.
Lopez Obrador has promised to govern as a pragmatist. Still, his procession toward victory has alarmed many investors and business leaders, who worry that he’ll roll back privatization of the energy industry and push the country into debt by spending more on social programs.
It will be interesting to watch. People who do not understand geography do not understand why countries like the United States, United Kingdom or Germany have significant success where other countries struggle. Geography has a lot to do with it. Many countries adopt socialism--whether mixed or otherwise--and do not have a tax base to support it. Mexico doesn't have a sufficient tax base to support a massive welfare state, and an attempt to erect one is likely to lead to what has always happened when tried: massive debt followed by hyperinflation. I think long term, this means that the peso will eventually be a good short.
Currency markets have had plenty of time to prepare for an AMLO win, and the peso extended gains after concessions by Meade and Anaya removed the risk of a dispute over the count. It was up 1.2 percent to 19.68 per dollar in overnight trading at 8:55 p.m. in Mexico City.
The currency has declined almost 10 percent since mid-April, as Lopez Obrador’s poll lead widened and trade tensions with the U.S. mounted, though it’s still among the best emerging-market performers this year.
Keep an eye to the long term here. I'm betting this isn't going to be good for the peso.
“We need a complete transformation,” said Sergio Oceransky, 45, as he voted at a polling station in central Mexico City. “We’re experiencing a tremendous political crisis that’s no longer sustainable.”
On the campaign trail, voters cited plenty of reasons to kick out the governing class. Many said physical security was their top concern. A decade-long war on drug cartels has pushed the murder rate to record levels.
While I think socialism is going to ultimately be worse for Mexico economically (don't worry, they will be sure to blame the United States for what is to come), I do sympathize with the electorate in throwing out their establishment. I enjoy seeing that happen in the US too.
"We have put together the most extensive and inclusive voter fraud organization in the history of American politics."
-- Joe Biden
-- Joe Biden
. Why are you so bent out of shape that I believe most people need pressured to work? Seems a silly thing to defend.
- By QatzelOk
- By litwin