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Mexico, with the world’s 13th largest GDP, is no longer a “Third World
Country”, but rather a fast growing, economically secure state. [Mexico is a great place to visit for a week or the winter, take early retirement to, and/or to invest in. This article outlines the new economic reality of the country.] Words: 785
So says Steve Schwab in edited excerpts from his original article* posted on Mexico Online entitled THE NEW GLOBAL ECONOMIC REALITY.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), may have edited the article below to some degree for length and clarity – see Editor’s Note at the bottom of the page for details. This paragraph must be included in any article re-posting to avoid copyright infringement.
Schwab goes on to say, in part:
Mexico: A Better Retirement Choice Than the USA
A significant percentage of Baby Boomers have been doing the research and are making the life changing decision to move out of the U.S.A. to Mexico. Indeed, it is what many are calling the largest southern migration of people and real estate assets to Mexico since the Civil War.
- Mexico Is One of the 10 Best Countries to Retire In – Here Are the Other 9 and the Reasons Why
- Top 10 Places to Live and Retire in Mexico
There are already over 2,000,000 US and Canadian property owners in Mexico. The most conservative number of American and Canadian Baby Boomers who are on their way to owning property in Mexico for full or part-time living in the next 15 years is over 6 million. Do the math on 6 million people buying a $300,000 house or condo and you will understand why the U.S. Government is trying to tax this massive shift of money to Mexico through H.R. 3056. The U.S. government calls this “The Tax Collection Responsibility Act of 2007”. Those who will have to pay it are calling this the EXIT TAX.
Mexico: A Better Economic Choice than China
Another large exodus from the U.S.A is in high paying skilled jobs. The job shift in both car and parts manufacturing (John Deere and Caterpillar laid off thousands of workers in the U.S.A. and hired equal numbers in Mexico) is already known by most investors and now it is aerospace manufacturers making the shift. A $210 million aerospace facility has been built in the city of Zacatecas and, with the 11 U.S. companies moving there, it is estimated that it will provide over 200,000 new high paying jobs in the coming years.
One of the main factors for the shift in jobs south to Mexico instead of China is realistic analysis of total production, labor and delivery costs. While the labor costs in China are 40% less on average, the overall transportation costs and inherent risks of a long distance supply chain, and quality control issues, gives Mexico a distinct financial advantage.
- “Made in Mexico” vs. “Made in China”: Will Mexico Be Able to Further Increase Its Share of Exports to the U.S.?
- Move Over China: Competition From Mexico is Growing Rapidly – Here’s Why
Mexico: Healthy & Profitable Banks
Mexico has avoided completely the subprime problem that has devastated the U.S. banking industry. The Mexican banks are healthy and profitable. Mexico has a growing and very healthy middle and upper middle class. The very recent introduction of residential financing has Mexico in a unique position of having over 90% of current homeowners owning their house outright. U.S. banks are competing for the Mexican, Canadian and American cross border loan business. It is, and will continue to be, a very safe and very profitable business. These same banks that were loaning in a reckless manner have learned their lesson and are loaning here the old-fashioned way. They require a minimum of a 680 credit score, 30% down payment, and verifiable income that can support the loan. In most areas of Mexico where Baby Boomers are moving to there is no real estate bubble although the higher end markets ($2-20 million) in many destinations are going through a modest correction….
Mexico: Flourishing Medical Tourism
The other major area where America has become overpriced is in the field of health care. “Medical Tourism” to Mexico is estimated to add 5-7% to Mexico’s GDP. The two biggest competitors for Mexico were Thailand and India but, with their distant geographical locations and political instability/personal security, Mexico has capture close to half of this growth industry. In Mexico today there are over 56 world-class hospitals being built to keep up with this business.
Mexico: Fiscally Responsible
Mexico is currently sitting on a cash surplus and an almost balanced budget….Mexico has been able to avoid the worst of the U.S. economic devastation. Mexico’s resilience is to be admired.
- When the U.S. Federal Reserve granted a $30 billion loan to each of Mexico, Singapore, South Korea, and Brazil, Mexico reinvested the money in Treasury bonds in an account in New York City.
- As the price of oil shot up to $147 a barrel Mexico’s Pemex wisely put in place an investment strategy that hinged on oil trading in the range of $38-$60 a barrel. Since the beginning of 2009 Mexico has been collecting revenues on hedged positions that give them $90-$110 per barrel today.
- Mexico’s recent and under reported oil discovery in the Palaeo Channels of Chicontepec has placed it third in the world for oil reserves, right behind Canada and Saudi Arabia.
Mexico, with the world’s 13th largest GDP, is no longer a “Third World Country”, but rather a fast growing economically secure state. [Mexico is a great place to visit for a week or the winter, take early retirement to, and/or to invest in. This article outlines the new economic reality of the country.]
*http://www.mexicoonline.com/blogs/1/184/everyone-living-in-mexico-should
Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
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