Mexico’s former president Felipe Calderon recently responded to Donald Trump’s border wall proposal by stating:

…The Mexican people, we are not going to pay any single cent for such a stupid wall! And it’s going to be completely useless… (link)

Why now?

Why would Calderon make such a claim at this specific moment in time?  Well, here’s a report that will answer that question.

(Mexico) Remittances sent home by Mexicans working outside the country surpassed petroleum revenues in 2015 for the first time.   There was a 4.75% increase in money sent from abroad, most of which comes from the U.S., to total US $24.8 billion last year, up from $23.6 billion in 2014, said the Bank of México.

The bank said it was the first time remittances had totaled more than petroleum revenues since it began tracking them in 1995.   Oil revenues last year totaled $23.4 billion.

An important factor in the increase in remittances is the jobs created by economic recovery in the U.S.   Some 11 million Mexicans are believed to be living in the U.S. and many work in construction. Remittances, 97% of which are sent electronically, averaged $292 last year. (link)

Yes, you read that correctly. Immigrant remittances received by Mexico have surpassed Mexico’s $23.4 billion in oil earnings.  This means the government of Mexico is more dependent than ever on the earnings of maids and gardeners in the U.S. to keep itself afloat. This is the leverage Donald Trump talks about to pressure Mexico to pay for the border wall. (more…)

Continuing with the absurd politics of a Mexican Presidents’ desperation to keep Mexicans from returning to Mexico:

… President Enrique Peña Nieto recently budgeted about $50 million to the country’s 50 consulates to help pay the costs of defending migrants who are in the U.S. illegally and facing deportation. –LINK–

A bizarre, albeit understandable policy, given the dependency on the Mexican economy created by $25 billion in remittances sent home from Mexican nationals illegally living/working in the U.S.
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President Donald Trump holds so much leverage in any negotiations with trade partners, especially Mexico, it is quite staggering to contemplate.

♦ TRADE – An awakening electorate and economic voters throughout the United States  are quickly recognizing a simple truth:

The scope of U.S. leverage is exponentially stronger in bi-lateral trade deals.

The United States is the largest economic market in the world.  Multilateral trade deals with bundles of nations benefit the smaller fish within the deal.  However, direct one-on-one “bilateral trade deals” always benefit the biggest fish, because the biggest fish holds all the leverage.
Donald Trump has been talking about this for decades.  Our massive market provides all the leverage needed for trade terms favorable to Americans. “Take it or leave it”, a phrase only for the entity holding the strongest hand.  However, frustratingly our national leadership has approached historic trade as if we hold a responsibility to lessen our own national value to the benefit of other nations.
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In 2015 we predicted if Donald Trump won the 2016 election, the Southern Border and Security Wall would not only happen as a construct of following through on a promise, but also factually happen as a function of avoiding the crisis of a neighboring economy in complete collapse.

What underpins that prediction is the hidden scale, and almost unquantifiable scope, of the exfiltration of U.S. dollars -legal and illegal- into Mexico.
American taxpayers as voters have no idea of the scale for how much money flows out of the U.S. into Mexico.  The reason no-one knows about it, and the reason economists cannot discuss it, is because the answer reveals a politically inconvenient discussion.
If accurate quantification was ever given sunlight, Americans, or more accurately ‘tax-paying Americans‘ would be able to see how much the United States actually subsidizes the nation of Mexico, and how much we’ve been ripped off.

…”this is what’s happening because our leaders are stupid, our politicians are stupid, …And the Mexican government is much smarter, much sharper, much more cunning.”

~ Candidate Donald Trump

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Media reports of Agustin Carstens resignation as chief of Mexico’s central bank have left MSM pundits and even business analysts scratching their heads. It appears no-one has any idea why Carstens is leaving… well, almost no-one.

The non-discussed story is the hidden story that has been visible yet kept quiet for over five years. In essence, what Carstens knows, and what only Carstens knows, is the scope and scale of Mexico’s economic (central finance bank) dependency on the outflow of dollars, hidden U.S. money.
Early this year, it was discussed –for the first time– that effective in 2015 Mexican Remittances exceeded the scale and scope of Mexico’s entire oil and energy export sector. The single-year guesstimate was approximately $25 billion. (more…)

Previously Published February 2016 – Remember, Prescient Trump has already won this argument:

Well, it’s game over. When it comes to the Southern Border Wall, Donald Trump has officially won the argument; the rest is just details.

This is what winning looks like folks!

Why do we say this?

Because what’s not written in this story is the Mexican political leadership arguing about the viability of the Southern Security Wall being built. They have conceded the most important aspect.

The argument has moved beyond ‘will the wall be built’, and now is focusing on ‘who is going to pay for it‘. The media will skip noticing that little nuance.

In an interview Thursday with Jorge Ramos on Fusion, former Mexican president Vicente Fox responds to Donald Trump’s plan to build a wall on the U.S.-Mexican border.

“I’m not going to pay for that fucking wall! He should pay for it. He’s got the money,” Fox said. (read more)

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We have actually been puzzled about why candidate Donald Trump was reluctant to present a very easy, factual and reasonable outline of how it is entirely possible for U.S. policy to incentivize Mexico to pay for the Southern Border Security Wall.
One of the reasons we’ve been puzzled, is simply because the process itself is very easy to initiate.  Personally I think Trump is sandbagging on many of these solutions, preferring to hold back the substance of the policy proposals for the General Election.
However, today Donald Trump presented the simple outline (pdf below) and the liberal media is apoplectic.

In addition, when President Obama received a question about it, Obama showed just how insufferably naïve he is regarding the economics of the proposal.
Here’s the basics.  Mexico takes in approximately $25 billion in money transfers to their economy, mostly from the U.S., per year.  These transfers of cash are called “remittances”.  Trump is proposing a Money Services Compliance action, via the U.S. Treasury (Banking Services and Secrecy Act), that would force a Western Union affidavit (or other institution) to be completed prior to the transfer.
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Six months ago every talking head on TV and print media was decrying the Trump proposal to build a border wall as impossible hyperbole.   It is amazing just how far the conversation has turned.

Yesterday CNN ran a segment on how the border wall would possibly be constructed, what materials would be used, and how much it would potentially cost.

However, what CNN apparently missed was a December explanation where candidate Donald Trump actually explained exactly what products would be used to build the Southern Border Wall. (more…)

This is a little funny.  Back in 2015 we originally shared an easy peasy way to pay for the border wall by charging a 4% remittance fee on wire transfers to Mexico.  With more than $25 billion (2015) in Western Union transfers, more than Mexico’s entire oil and energy sector combined, a 4% U.S. surcharge on remittances creates $1 billion revenue annually.
The U.S. Treasury already has a similar process in place for Cuban Remittances and Western Union compliance affidavits.  The remittances to Mexico have now jumped to $27 billion in 2016.  Making the remittance fee even more feasible.

WASHINGTON – President Trump is mulling a tax on cash transfers between immigrants in the U.S. and their relatives in Mexico as a way to fund his promised border wall without forcing American taxpayers to open their wallets, according to sources familiar with the proposal.
Trump first floated the idea of taxing or halting person-to-person wire transfers, known as remittances, during his bid for the White House. A two-page memo released by his campaign last April described a plan “to compel Mexico to pay for the wall” by preventing immigrants from wiring money outside of the U.S. unless they can prove their legal status to law enforcement authorities.

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The word “accidentally” has to be used in the headline because while Vitter’s bill doesn’t specifically mention the southern border security wall, the intent of the revenue is to provide border security measures.

As far as we can tell only our analysis of the potential Mexican remittance fees have outlined the very plausible way to pay for the Mexican border wall.  However, Louisiana Senator David Vitter has now presented a bill targeting the transfer of U.S. funds out of the country by illegal aliens.

Vitter has penned an Op-Ed in the Washington Times which includes two Governmental Accounting office reports – One HERE – and – Another HERE – which show the volume of removed revenue, remittances, as calculated/described by the GAO.

Representative Vitter explains his proposal thusly: (more…)