The Peso

The Mexican Peso began 2015 at 14.74 on January 1st, and is currently at 17.25. If it ends the year there, the dollar will buy over 17% more pesos.

See Interactive chart here.

Oaxaca to Puerto Escondido

We have just returned to San Miguel from Christmas in Oaxaca. While there we heard about the great beaches in Puerto Escondido, but it was trip taking six to seven hours. The other night we met Robin and Donnie Crisp at Hecho and they raved about Puerto Escondido. It's great to read that the new highway being built will cut travel time to two hours, BUT it's behind schedule and out of money: From Mexico News Daily: When the Oaxaca governor met earlier this year with federal transportation officials and representatives of the construction firm ICA, there was optimism that two new super-highways were nearing completion.

But like previous pronouncements regarding the two massive projects, the optimism was overdone.

One of them is a 104-kilometer highway through the mountains that will provide a new link between the city of Oaxaca and the coastal city of Puerto Escondido. Construction began in 2010 and completion was slated for 2013.

That date was later amended to the end of 2014. Two months later, in February this year, Governor Gabino Cué said it would be operational by the end of 2015.

But last month, nine months after that promise, the highway was only 60% completed. The new completion date: the beginning of the third quarter of 2016.

Now, it turns out, ICA’s financial problems have thrown another wrench in the works. The state said on Saturday it was working with the federal Communications and Transportation Secretary to find the 700 million pesos needed to finish the road. ICA is no longer able to provide it.

Mexico’s largest construction company missed a US $31-million bond payment in late November and entered a 30-day grace period. Thirty days later, it defaulted.

The firm said it did so “to preserve liquidity, prioritize ongoing operations and fund projects currently under development.”

The second highway, linking Oaxaca city with the Isthmus of Tehuantepec, was reported to be 54% complete. It was scheduled to be operational during the first half of next year, but that date was amended last week to the third quarter of next year. However, there was no indication that it was facing a funding shortfall as well.

It, too, is a big project in difficult, mountainous terrain requiring 54 bridges, 11 viaducts and three tunnels over the course of the 169-kilometer route. The 9.3-billion-peso highway will reduce travel time between the state capital and the isthmus from four and a half hours to two.

While a third-quarter completion is still anticipated for the highway to the coast, that is now subject to coming up with the funds to finish it. And while the state said in November that it had resolved land ownership disputes with communities located on the route, it has said so before only to be faced with new ones.

Slated to cost 5.25 billion pesos, the highway will shorten the trip between the capital and Puerto Escondido from six or seven hours to just over two.

Artists San Miguel

A Peter Leventhal

What a wonderful day Bev and I had yesterday. First stop was Saturday Market, a teeming spot to sit with strong coffee and two great cinnamon rolls with rasas raisins. Bev and I sat down at a table in the shade that we shared with a very pretty young woman, a gringa. I commented to her that she had beautiful blue eyes. She traveled as Mary and she her destination would be the tip of Argentina. From there she hoped to catch a ride to Antartica. We enjoyed talking with her. She was 28 and had the same way of talking as my daughter Erica. She had traveled throughout Asia and now from San Miguel her goal was to walk, bus or travel by car...alone!

So much like Erica who traveled alone through eastern Europe.

We told her we were next going to the Aldea and the book fair put on by the Literary Sala. Mary asked if she could tag along. My gosh, we met people we knew outside the doors of the market, then another on the street on the way. Sheila met Mary and when she heard she was going to Columbia, raved about the not to be missed coffee plantations. Then when we walked into the room where books and art was being sold we met Marcia Loy and Steven. I introduced Mary to Marcia and said that Mary was headed to Antartica. Marcia had been there and enthused to Mary about the place. We introduced her to John Scherber and Kristine, and Lynda Schor. In the end, Mary siad the was headed next to Parque Jaurez to look at the art. We wished her a safe trip and silently said a prayer for her safety. She has more courage than I.

While at the Literary Sala I met Margaret Paul author of Conversations with Artists in San Miguel de Allende. More of her book later. I met Sher Davidson author of Under the Salvadoran Sun. She is a transported Oregonian, who lived on 30th between Siskiyou and Stanton. We lived on 32nd Ave between Brazee and Knott. I met Pat Hirschl author of Winter Bloom, who will be reading at the Literary Sala on Thursday Decembwer 10th. I met artist Susan Dorf who every other week has a cartoon in the Attencion. Finally, I bought two books from Lynda Schor and Bev bought a handmade bracelet from Kristine Scherber.

Christmas At Fabrica Aurora

Then it was on to the Art Walk at Fabrica Aurora. This is a wonderful event each month. You get to talk with the artists in their studios. There was Mary Rapp, at 90 still producing cutting edge art. Mary Calderoni was beautiful as always and she and Bev have a special bond. The were Crystalized every week. Crystal Calderoni led them through intense workouts. We spoke with Cecilia Rivera about her art. There were several that would fit in a home of our own. I had a wonderful chat with two men, partners for thirty years, who got married on July 3rd in New York, three years ago. After they were married, New York seemed to celebrate the next day with a massive display of fireworks.

A Peter Leventhal

Finally, I chatted with Peter Leventhal. I've been following the progress of a very large painting that he has been working on for more than three months. I would love to have it. He is a sweet man, suffering from Parkinsons. He talks so softly, I really have to concentrate to get all he says. I was looking online at Margaret Paul's Conversations with Artists in San Miguel de Allend and found that it has a chapter on Peter. It helped me understand Peter's influences, Raul Dufy. I would love to have something of his, too.

To top the evening Marsha, Darryl, Bev and I took a taxi to La Gratta for pizza and Esther, the owner, shook our hands and welcomed us to the best pizza in SMA.

Parroquia de San Miguel Arcangel

A reviewer on TripAdvisor said, "You could spend an entire day just sitting at the Parroguia and watching. It is like a movie...people walking, people singing, burros with tequila, weddings, classes, dances, food carts, merchants, and oh the bells...the bells. I spent an entire day watching the Christmas tree bring built-it was amazing. AND oh the church. SMA I love you.

Friends of ours, Richard and Jerry, recently visited our city and we captured these images at the Parroquia de San Miguel Arcangel.

The Myth of Malintzin: Book Now in Spanish

Maybe, we are seeing history revised.

"In the collective conscience of the Mexican people the historical figure La Malinche has been forever associated with treason and servility, particularly in favor of foreign people or interests.

"The myth of Malinche — also known as Malintzin, Malinalli or Doña Mariana — has even given birth to the term malinchism, a pejorative term for a preference for all things foreign over one’s own culture, to the point of self-destruction in an attempt to fit in."

I first encountered malinchism when I told a few expats about a wonderful book about the origins of Mexico titled The Jade Steps.

I was immediately told that she was a traitor to her people and not to believe what I read.

Now, But Camilla Townsend, a professor of history at Rutgers University, paints a very different picture of this controversial character in her 2006 book, Malintzin’s Choices: An Indian Woman in the Conquest of Mexico. The book’s theories are now available to the broader Mexican population as a result of its recent translation into Spanish.

Townsend believes that the Indian woman who served as an interpreter for conquistador Hernán Cortés was an intelligent person with unmatched abilities to whom history has been unfair.

“History has been unfair to her, and with other protagonist women of the Conquest; they suffered greatly and did all they could to survive. In her case, the historical impression is that she betrayed her people, being fascinated by the outsiders, but that was not the case,” said Townsend.

The historian has dedicated her studies to relations between the indigenous people and Europeans throughout the Americas. Her publications have spanned Mexico, the Andean region and the Chesapeake. She is also an expert in Náhuatl, the Aztec language.

Aided by a vast bibliography — including original texts — Townsend exonerates Malinche of her historical guilt, describing instead a woman of extraordinary intelligence who, far from a betrayer, was a victim of the circumstances who became aware of her role and managed to survive. The writer even hints that Malinche could have been worried about the future of her conquered brothers and sisters.

Little is known of Malinche’s origins; even her real name has been lost to time. The author concluded that she was most likely born to a noble Nahua family in the border zone between the Aztec and Mayan empires, in the Coatzacoalcos region of Veracruz.

As a child, she was abducted and sold as a slave to Mayan lords in the ancient port of Xillacanco, in present-day Campeche. Taken to the nearby capital of Putunchán, she learned the Chontal language, adding this knowledge to that of her native Náhuatl.

When Cortés conquered the region, young Malinche was handed over to the Spanish along with 19 other young women.

Traveling with Cortés was Jerónimo de Aguilar, a Spaniard who had lived with natives in the Yucatán region for eight years after being shipwrecked. “Malinche initially worked with de Aguilar [translating from Náhuatl to Chontal while de Aguilar did so from Chontal to Spanish], but in a very short time, after about six months, she could manage without him; she had very quickly grasped the Spanish language,” relates Townsend.

The historian believes that Malinche’s is a doubly joyous story: she was favored by the circumstances, but she was also very skillful. “She was a slave, and through her experiences with different cultures she learned different languages. Frankly, many women were imprisoned and enslaved at that time, there were many potential ‘Malinches,’ but I must say that Malintzin definitely had more skills than anyone else.”

Marina, as she was baptized by the Spaniards, never felt remorse for aiding the Spanish conquer the Aztecs. Her resentment towards Moctezuma’s people was clear, and it was natural for her people to see the Aztecs as an enemy.

Malinche died sometime around 1529, after living for a decade among the Spanish and becoming Cortés mistress, giving birth to his first son.

Says Townsend: “After all that time, seeing the conditions in Mexico, I imagine she began to realize: ‘My God, millions of these people are coming, and we’re going to suffer.’ It wasn’t possible for her to know all this at the beginning, but I think it’s very unlikely that she didn’t realize what the future would bring.”

The two books are available on Amazon, The Jade Steps is a great read and considerably cheaper.

Bank of America Sees More Inflation in Mexico

ERIC MARTIN Bloomberg News, writes, "With Mexico's inflation rate plummeting to an almost 50-year low in October, bond traders have naturally set about slashing their cost-of-living expectations.

"To Bank of America Corp.'s Carlos Capistran, they've got it all wrong.

"The pace of consumer-price increases is poised to accelerate as growth picks up in Latin America's second-biggest economy and a weak peso drives up the cost of some imports, said Capistran, the most-accurate inflation forecaster among 23 economists surveyed by Bloomberg."

Either your numbers for inflation in Mexico are understated, as they are in the U.S. or something else is going on. The peso over the last seven years is down from 10 pesos to the dollar to almost seventeen to the dollar. Yet there is little inflation. Or the measurement of inflation is wrong and goods in Mexico have moved up sharply in the last seven years.

"He expects the rate to rise to 3.5 percent next year and 3.2 percent in 2017. That's well above the 2.6 percent inflation implied by a bond-market gauge known as the breakeven rate.The inflation expectations implied in the market in the short term are too low, possibly as a reaction of realized inflation so far this year," Capistran said from Mexico City. "Risks for inflation are tilted toward the upside." The inflation rate fell to 2.48 percent in October, the lowest since 1968, as sluggish growth, falling phone-service costs and lower gasoline-price increases outweighed the impact of the currency's 12 percent tumble this year.

"That's not likely to be the case next year as Mexico moves beyond the immediate impact of some legal changes, such as the end of connection fees for long-distance phone calls, Capistran said."

Mexico it seems to me is experiencing the same deflationary pressures as the rest of the world.

Also, some importers who buy products in dollars may raise prices after exhausting inventories that they bought when the peso was stronger, he said.

Bank of America recommends buying inflation-linked bonds due in 2046 and selling similar-maturity fixed-rate notes.

Yields on the linkers have plunged to a record low, leaving the difference with the fixed securities at 2.92 percentage points. That's too low, said Bank of America strategist Ezequiel Aguirre.

Mexico's economy will expand 2.5 percent in 2016, up from 2.3 percent this year, Capistran said.

The U.S. is on the brink of recession and will Mexico experience higher growth as the world's economy slides into the abyss?

He's not alone in predicting a spike in inflation. Bank of Nova Scotia's Mario Correa forecasts the pace of consumer price increases will accelerate to 4.6 percent in 2016 as the peso's weakness feeds through into the cost of living.

That's the highest rate forecast in a Bloomberg survey of 23 economists and would exceed the upper end of the central bank's inflation target range of 2 percent to 4 percent.

While Correa acknowledges that the peso's impact on consumer prices has weakened, he said it's still a factor.

Each 1 percent decline in the peso's value today fuels less than 0.05 percent of inflation, compared with about 0.5 percent 20 years ago, according to Bank of America.

"The currency pass through isn't dead, though it's less than in the past," Correa said from Mexico City. "Once people realize this exchange rate move is something more permanent, we're likely to see more of an impact on prices."

I'm not a big fan of experts who project today's trend into the future.