In the Opinions page on Sept. 3, James Saffel spoke of the dollar and Mexican pesos, suggesting that Mexicans in the U.S. would take American dollars (in the example, $200), take it to Mexico, exchange it for 2,600 pesos and live high.
In fact, if the exchange rate is correct, the 2,600 pesos would buy the same amount of goods in Mexico as $200 American would. If one would buy more than the other it would be the $200 American not the 2,600 pesos because it is more highly desired by Mexicans than the peso even though monetarily two examples are equal in value.
When in Guadalajara several years ago, I noticed that Mexicans were lining up at currency exchanges. I suggested to a Mexican friend that they were exchanging dollars they got from tourists for pesos. He said, “No, they are exchanging their pesos for dollars.” The reason: The dollar is a more stable currency and will hold its value longer.
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