Tag Archives: Mexico

Real Coke and Car Tariffs, by Eric Peters

What tariffs do to the companies and consumers upon whom they fall. From Eric Peters at theburningplatform.com:

Real Coke – the most American of sodas – comes nowadays from Mexico. I mean of course the stuff made with sugar and put into glass bottles, the way Coke was once made and sold here  – as opposed to the high fructose corn syrup sweetened sludge (in aluminum cans and plastic bottles) currently sold here.

Interestingly, this is the case because of tariffs.

On cane sugar, which costs artificially more here in the U.S. thanks to them – in order to punish the manufacture of “cheap” sugar outside the U.S.

It is why American-made soda – not just Coke – is generally sweetened with HFC instead of cane sugar.

Almost everything else, too.

The soda sweetener switcheroo happened back in the ’80s. You may be old enough to remember. Real Coke was replaced with New Coke, which was Coke with HFC instead of sugar. Then – after an uproar – came Classic Coke, which wasn’t Coke. Because it was made with HFC, too.

But it was cheaper to make and sell  than real Coke with sugar.

Does the tariff on sugar benefit American soda drinkers? Their waistlines – and much-upticked tendency toward obesity and diabetes – provides the answer.

Cheapness – especially when it is artificial – has its price.

Not surprisingly, many people wise to the costs of HFC are willing to pay a little extra to get Mexican Coke – real Coke –  made with cane sugar. Or the more expensive boutique sodas which are made here, with artificially expensive cane sugar.

But if it weren’t for the tariffs on sugar, they wouldn’t have to go to Mexico (so to speak) to get a real Coke. They would be able to buy American-made Coke – without HFC.

And it wouldn’t be artificially expensive.

No one blames the Mexicans for HFC-laden American-made sodas. The problem is not enough people blame the U.S. government for the fact that they are effectively forced to drink HFC-laden sodas – or pay extra for sodas without the HFC.

The sugar isn’t naturally expensive. But the tariffs are.

Now the Orange One wants to apply tariffs to vehicles, apparently on the same principle – and it will have the same effects.

To continue reading: Real Coke and Car Tariffs

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Despite Wave of Cyber Attacks, Banks in Mexico Double Down on Biometric Tracking of Customers, by Don Quijones

Mexico wants to be a leader in the biometric identification of bank customers. Mexico is currently a hacker’s paradise. What could go wrong? From Don Quijones at wolfstreet.com:

For hackers, biometric data is the Holy Grail. 

In a move fraught with risk, Mexico, a country that has become a haven for the black market of stolen personal data of all kinds, is about to build a big biometric database to be used not just for the benefit of government institutions but also for the nation’s banks.

Last year a law was passed that gave Mexican banks until the end of August 2018 to collect biometric data (finger prints and iris scans) on all their customers. Foreign-owned subsidiaries of global banks like Citi and BBVA were thrilled with the initiative arguing that it would help them combat identity theft. It could also help lenders fulfill their “know your client” (KYC) anti-money laundering checks, at much lower cost.

The ultimate goal is to develop a unique identification system that will work alongside the government’s national ID scheme, which is apparently in the final stages of development. But Mexico’s banks — in particular the smaller ones — struggle to develop the infrastructure needed to comply with the new rules by the end of August.

So in the past week, the banks were granted a nine-month extension to harvest their customers’ biometric data — and not just their fingerprints and iris features. The lenders will now also be collecting their customers’ facial and voice characteristics, all of which will be stored on a super-secure, highly centralized platform that no hacker, no matter how skilled, resourceful or Russian, will be able to penetrate. At least that’s the plan.

But what happens if the database on which all this data is stored is itself not secure? Mexico has hardly proven itself to be a safe place for valuable data. Last year it won ninth place on PriceWaterhousecooper’s list of global “economic crime” hot spots. The country’s banks cannot even keep their own payment systems secure, let alone a centralized database full of priceless information on their customers.

To continue reading: Despite Wave of Cyber Attacks, Banks in Mexico Double Down on Biometric Tracking of Customers

Trade-War Drums: Is Mexico Ready to Fire at the US Corn Belt? by Don Quijones

If you levy penalties on another nation’s exports into your nation, they can levy penalties on your exports into their nation. For Mexico, the nuclear option would be penalties on US corn exports. From Don Quijones at wolfstreet.com:

Various groups are clamoring for it in the third largest market for US food exports.

Mexico, the birthplace of maize, is dangerously hooked on U.S. imports of largely transgenic strains of the crop. In 2017 it was the third biggest importer of corn in the world, behind the EU and Japan, purchasing 15.2 million tonnes of the foodstuff, most of it from U.S. farmers and agribusinesses. But that could soon change.

Following the U.S. government’s decision to impose steep duties of imports on steel and aluminum from Mexico, Canada and the EU, Mexico, a net importer of US steel, has hit back with tariffs on US products including whisky, cheese, steel, bourbon, and pork. The move has upset U.S. businesses, including pork producers, who now face a 20% tariff on exporting leg and shoulder to Mexico. Mexico is the largest market for US pork exporters. It’s also the third largest market in the world for U.S. agricultural exports as a whole, pipped to the post by China and Canada.

For the moment the Mexican government has ruled outimposing duties on U.S. imports of staple foods such as corn, beans and soy, largely out of fear that it could further fuel food inflation, especially with the Mexican peso once again slumping against the dollar. But calls for such action are rising.

If Trump doubles down on his tariffs while continuing to insist on separate bilateral talks with Canada and Mexico, the Mexican government could end up taking the nuclear option of restricting U.S. imports of corn. Given that the biggest corn-producing states in the U.S. were also among the supporters of Trump in the last election, Mexico’s government has a clear strategic motive for doing so.

“If we want to stop this [trade war] and hit the U.S. government where it really hurts, we should target America’s corn belt by imposing a tariff on imports of U.S. transgenic corn,” said Angel Contreras Carrera, the president of the State Agricultural Union of Corn Producers.

To continue reading: Trade-War Drums: Is Mexico Ready to Fire at the US Corn Belt?

Strange Things Are Happening in Mexico’s Banking System, by Don Quijones

The Mexican banking system is plagued by major league hackers. From Don Quijones at wolfstreet.com:

Rumors and denials proliferate, as millions of pesos disappear.

On Sunday it was the turn of Mexico’s second biggest lender, Citibanamex, to be the target of customers’ ire after suffering a system failure that made it impossible for customers to withdraw money from ATMs, pay with their credit or debit cards, or access their online accounts. The incident is estimated to have affected roughly 4.3 million people. On Sunday night, the bank, which is majority owned by Citigroup, announced that the problems had been resolved.

But by Monday morning, a whole new problem had arisen. Customers of Mexico’s biggest bank, BBVA Bancomer, owned by Spanish banking group BBVA, had begun reporting problems accessing the bank’s mobile platform. As happened with TSB and Citibanamex, the problems became apparent first on social media. The bank responded to customer complaints on twitter and Facebook by urging them to restart their devices, switch to the 24 hour clock and reinstall the app. It’s not clear whether that is working.

These latest incidents have raised serious questions about the security of Mexico’s banking system — something we warned about at the beginning of April.

At the end of April a number of financial institutions reported suffering a cyber attack via Bank of Mexico’s SPEI interbank transfer system, an iteration of the SWIFT global payment system. Lorena Martínez, the director of Bank of Mexico’s payment systems, denied rumours that SPEI had been breached. “That has not happened,” she said, adding that the problem was detected in the internet application used by some institutions to connect to the central payment system.

While Bank of Mexico (or Banxico for short) admitted there had been a hack, it denied that any money had been taken. Now, weeks later, sources close to the government investigation claim that cyber thieves had in actual fact siphoned off hundreds of millions of pesos by creating hundreds of phantom orders that wired funds to fake accounts at different five banks, including Mexico’s third largest, Banorte. Accomplices then emptied the fake accounts in cash withdrawals from dozens of branch offices.

To continue reading: Strange Things Are Happening in Mexico’s Banking System

Who’s Most Afraid of a Latin American Debt Crisis (Apart from Latin America)? by Don Quijones

The contagion metaphor often used in debt crises doesn’t really fit. It’s not like an overindebted entity “infects” healthy entities and the disease then spreads. The better analogy is a line of dominoes, and as one domino falls it knocks over a line of other dominoes, and all the dominoes represent overindebted entities. From Don Quijones at wolfstreet.com:

It’s not just countries that are at risk of contagion.

Economic history appears to be rhyming once again in Latin America. Perennial credit-basket-case Argentina was one of the first countries to suffer a major currency crisis this century. Now, its government has asked the IMF for a brand-new bailout. But if this classic last-gasp fix was meant to calm the markets, it isn’t working.

Previous Latin American debt crises have taught us two things:

  1. The direct impact on the general populace, already suffering from sky-high poverty rates, is devastating;
  2. Once the first domino falls, contagion can spread like wildfire.

The debt crisis of the early 1980s, which spread to virtually all corners of the region, famously paved the way to Latin America’s “lost decade.” Mexico’s Tequila Crisis of 1994-5 at one point became so serious that it almost brought down some of Wall Street’s biggest banks.

At the moment, as long as the US dollar and US yields continue to rise, emerging market jitters can be expected to grow. As British financial correspondent Neal Kimberley notes, markets often behave like predators, running down what they perceive as the weakest prey first — a role being filled, with usual aplomb, by Argentina.

Emerging market weakness is by now a generalized trend. The jitters could soon spread to Latin America’s two largest economies, Brazil and Mexico, which between them account for close to 60% of Latin America’s GDP. Both of the countries face general elections in the next two months. In Brazil the most popular presidential candidate, former president Luiz Inácio Lula da Silva, is running his campaign from behind bars, where he serves a prison sentence after having been convicted of corruption. In Mexico, the front runner, Andres Manuel Lopez Obrador, has the country’s business elite so spooked that it has launched a “Project Fear” against his candidacy.

Doug Casey on Deploying Troops to the Border

Doug Casey finds “intelligent design” and a lot of NGO money behind mass migrations to both the US and Europe. From Casey at caseyresearch.com:

Justin’s note: Donald Trump wants to put 2,000–4,000 troops on the U.S.–Mexico border. And it’s no secret why he’s doing this. Trump wants to secure the borders. He believes that the “security of the United States is imperiled by a drastic surge of illegal activity on the southern border.”

To be fair, this isn’t unprecedented. There have been three large-scale National Guard border missions since 2006. Still, I can’t help but wonder what might come out of this, given Trump’s strong views on illegal immigration.

So, I called Doug Casey for his take on this issue…


Justin: What do you make of this, Doug? Will deploying thousands of troops to the border curb illegal immigration?

Doug: Well, it looks like what could have been a crisis has been temporarily defused. What might have been thousands of migrants rushing the border has apparently dwindled to a few stragglers. A non-event.

But troubles on the Mexican border have a long and colorful pedigree. Especially starting from around 1912–1918. For one thing, one of my favorite authors, Ambrose Bierce, went to join Pancho Villa’s forces in 1913. He was in his 70s, and it was his way of checking out.

There were some great movies made about that time and place, as well. Vera Cruz, with Burt Lancaster. The Professionals, with Burt Lancaster and Lee Marvin. And possibly my personal all-time favorite, The Wild Bunch, with William Holden. There’s even a fun comedy about the era, Three Amigos, with Steve Martin.

In those days the border was a more fluid concept. In 1917, Pershing lead 5,000 US cavalrymen deep into Mexico, chasing Villa after a raid he made into the US. That was about the time of the famous Zimmerman telegram, where the Germans promised help getting Texas, New Mexico and Arizona back to Mexico, if the Mexicans declared war on the US. That was one reason the Americans entered WW1. No matter… the Mexicans will get that land back without a formal attack.

To continue reading: Doug Casey on Deploying Troops to the Border

Trump Administration To Release Obama-Era Fast And Furious Documents, by Mac Slavo

After years of stonewalling, the Obama administration’s Fast and Furious documents are finally going to be released. This should be interesting. From Mac Slavo at shtfplan.com:

We may finally get some answers to the high-level Obama administration’s gun-running scandal dubbed “Fast and Furious.”  The Trump administration is promising to release the documents pertaining to that scandal that were withheld by former Attorney General, Eric Holder.

Operation Fast and Furious was the Obama-era operation in coordination with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) in which the federal government allowed criminals to buy guns in Phoenix-area shops with the intention of tracking them as they were transported into Mexico. But the agency lost track of more than 1,400 of the 2,000 guns they allowed smugglers to buy.

“For over six years, the House Oversight Committee has fought for additional documents related to Operation Fast and Furious. Today, the Committee finally reached a conditional settlement with the Department of Justice,” Amanda Gonzalez, spokeswoman for the House Oversight Committee, said in a statement to Fox News. “The Committee seeks all relevant facts so we can learn from the mistakes made by the Justice Department. We have a responsibility to uncover why they worked so hard to hide this information from the Committee, the family of [slain border patrol agent] Brian Terry, and the American people.”

Brian Terry was killed in 2010 by an illegal immigrant with a weapon used in the botched Operation Fast and Furious. Terry died in a gunfight between Border Patrol agents and members of a six-man cartel “rip crew,” which patrolled the desert along the U.S.-Mexico border looking for drug dealers to rob. The cartel member suspected of killing Terry was apprehended in 2017.

Terry’s brother, Kent Terry also wants the scandal investigated.

“We need to find out the truth, exactly what happened, how it happened, why it happened,” Kent Terry said on Fox & Friends Tuesday. “We need Mr. Trump, President Trump, to unseal the documents, reverse executive privilege so that we know what happened, and that we can hold the people accountable that are responsible.”

To continue reading: Trump Administration To Release Obama-Era Fast And Furious Documents