Wednesday, August 11, 2010

The Power of the Peso

That was not intended to be a sarcastic slight against Mexico's currency (and the currency of several other former Spanish colonies including Argentina, Chile, Columbia, Cuba, the Dominican Republic and Uruguay, to name a few).

Sure, the peso has its flaws. For example, in terms of actual value, sure the peso doesn't stack up favorably against the U.S. dollar (unless you are converting to pesos). As of this morning, the conversion rate was $1 USD to $12.73 MXN. Though at the border, after the charge to convert, it was an even $12 MXN.

But it also has some advantages. Other than being a more vibrant currency (as depicted to the right), it also comes in different sizes, which makes it more user-friendly for the blind. Though I've also been told that sometimes the size also varies among the same denomination, meaning, not all $50 MXN are the same size.

(Interesting peso side bar, at least to me it is. The peso is the first currency to use "$" for shorthand. You can find that little tidbit, and much more, courtesy of the good people at Wikipedia. So you know its accurate.)

All the same, I'd stack the power of the peso against the almighty dollar any day.

I say this because in the United States, I would put about $50 USD in my wallet, and that would last about a month. Maybe longer. Today, I have $600 pesos in my wallet (about the same as $50 USD), and I'll probably be out in two weeks. Or less.

It's not that things are expensive here. Far from it. We can go get tacos for dinner - and what else would you eat here? - and spend about $10 USD for the both of us. Total.

The true power of the peso lies in the fact that the currency is actually used. American currency practically belongs in a museum. Everything is on plastic. Or being traded over the Internet, which of course is just an extension of plastic.

But you don't use credit cards in Mexico. If you do offer to pay with a credit card, I'm sure someone would take it and swipe it, and in most cases, everything will turn out fine in the end, though there usually is an extra fee applied courtesy of the bastards...oops, I mean the credit card companies.

There is a risk, however, that once the card leaves your hand and is taken to a back room for swiping, someone will copy your information. The same risk applies in the United States, I suppose, and it is a wonder that it is not more of a problem. By the way, given how prevalent the use of credit cards is, doesn't seem like they are a little light in terms of identity protection. At least with debit and ATM cards, you have to punch in a code to complete the transaction. With credit, it is swipe, sign, and thank you. Sure, the clerk is supposed to check IDs, but that is a rarity in the United States.

We were told never to let our credit cards out of sight. Which means the only places that it can be used are at grocery stores where you can swipe at the register. You can't even swipe your card at the gas station, because they are full service here. And at about $4 USD per gallon, gas is not cheap. (Unlike the States, they don't advertise gas prices on marquees because PeMex has a monopoly. Doesn't matter what they charge, because you are going to pay it. So my $4 USD is an estimate based on the fact that it cost about $550 MXN to fill our 13-gallon tank.)

So, to get back to the point at hand (man, I've sidetracked all over the place), which currency has more power. The one that you have to keep on you or the one that is being fazed out to a degree?

One last side story, and I'm done for the day. While walking Tiffy one day, I spotted a small round piece of metal. Used to finding coins during our walks in Crystal City, naturally I picked it up. It was very small, maybe the size of a Spree, and very light. I saw a big 10¢ sign on it, and figured it was be a tenth a peso. Using $1 USD = $12 MXN, one peso is worth 8.5 American cents. A tenth a peso, therefore, is less worth than an American penny. I say that because all sentimental value aside, it costs the government more than a penny to circulate a penny. (Skip down to the third paragraph. And in the fourth paragraph, it claims that it costs 10 cents to produce one nickel!) It's time to kill the penny.

It is indeed a real coin, but apparently the Mexicans are a little more forward thinking than Americans when it comes to currency, and almost everything here is rounded off to the nearest peso or half peso. The 10¢ piece and 5¢ piece, while exist, are seldom ever used. I have never seen a 5¢ piece. And as a point of reference for the images of coins below, the peso is about the same size as a penny.


  1. Yeah, I have to agree with you that the way the USD bills and coins are organized it's not very logical or user friendly. Same size bills for blind people is one example. Another is the sizes of the coins. The dime is smaller than the penny and the nickel. And on top of that nowhere on the coins does it say that it's 5c, 10c. Dime and nickel does not help a foreigner that doesn't yet know those words. I am used to them now but have talked to many newcomers who find this aspect of the US currency confusing.

  2. I included some information from your blog on the Weekly State Department Blog Roundup for this week:

    If you would rather not have me mention your blog or use your words or photos, please leave a comment on the post and I'll remove the info. Thanks--