PEOPLE Make a world of difference ! Were proud of our employees and their contributions to your success and ours. Call us for quality printing, binding, mailing and data processing services. Get to know the people at Futura. FuTU Ra COMMUNICATIONS. INC P.O. Box 17427 Austin, TX 78760-7427 389-1500 The peso collapsed despite two large, secret credit lines arranged by the U.S. Treasury and the Federal Reserve. Standby loans of up to $12 billion were concealed from the U.S. and Mexican publics during October 1993, prior to the NAFTA vote, and after the first PRI presidential candidate, Donaldo Colosio, was assassinated in March 1994. The secret loans were not reported in the U.S. press until September 1994. As the peso collapsed in late December 1994, the Treasury and Federal Reserve increased their combined share of official loan commitments for Mexico to $9 billion and arranged for the total commitment to increase to $18 billion. Then, in early January, when it became clear that even these loans would not be enough, the Treasury and Federal Reserve approached Congress to request a loan guarantee package. Federal Reserve Chairman Alan Greenspan took a leading role in lobbying Congress for this Executive Branch policy initiative, which is an uncomfortable reminder of Executive Branch-Fed collaboration during the Nixon years, when Arthur Burns was chairman. Meanwhile, there has been no public accounting for the actual use of the monies lent, and the names of the recipients of U.S. taxpayers’ largesse in this case have not been disclosed. U.S. officials are said to be uninterested in obtaining copies of the receipts of foreign exchange trades executed by or for the account of the Mexican central bank \(whose senior officials actively participated in the cover-up of the peso’s colthe opposition parties in Mexico, but the PRI is stonewalling such requests. The main objective of these jerry-rigged solutions to the eternal problem of developing-country debt and poverty apparently seems to be the renewal of enough investors’ confidence in Mexico \(actually, in the ongoing Zedillo and PRI administration to Mexico and allow existing investors, who are currently locked into large poten tial losses, to get out. Investors looking for the exits include prominent U.S. banks, mutual funds and some pension funds that made the mistake of believing the PRI-led “Mexican miracle.” Unlike the last time, in 1982, the banks now have much less at stake than bondholders. The current total of U.S. banks’ claims on Mexico is about while bondholders might have as much as $60 billion at risk. The main thing to remember about the current Mexican crisis is that, as in most developing countries, one class of people borrows the money, but another has to pay it back. The middle class and the poor do not, by and large, have any foreign bank accounts. It is ridiculous that, instead of allowing U.S. investors in Mexico to bear their own losses and learn some painful lessons that any casual reading of financial history would have taught them, a massive bailout effort is under way that will require another prolonged period of austerity for the Mexican people, even as efforts are made to reduce the flow of Mexican immigrants into the United States. Truth commissions not controlled by the PRI should be appointed to root out and disclose the causes of the mysterious events listed above, starting with the assassinations and ending with the Banco de Mexico, the U.S. Treasury, the Federal Reserve and their allies in the intelligence communities. President Zedillo should be dissolve the PRI and appoint a government of national unity, sharing power in the cabinet ministries fully with the two principal opposition parties, as a precondition for any further. official U.S. financial assistance to Mexico. And a renewed public debate over the future of U.S.-Mexican relations, with full public disclosure of all relevant facts this time, should be the minimum price that U.S. taxpayers should exact from our political, financial and academic establishments before lending any organized support to this latest Mexican bailout package. This is Texas today. A state full of Sunbelt boosters, strident anti-unionists, oil and gas companies, nuclear weapons and power plants, political hucksters, underpaid workers and toxic wastes, to mention a few. …449. s. tirl A .z ,,,,, *–,. ‘.,.. .., .A, , flit r ‘ ‘t j Z .\\s azIP : 1 ” IA \\,.\\. 0 .t . ,, tb; ir, ,A ,, .,!.,.: Sk-17 , BUT DO NOT DESPAIR! I ” ,_THE TEXAS 1O server TO SUBSCRIBE: Name Address City State Zip $32 enclosed for a one-year subscription. Bill me for $32. 307 West 7th, Austin, TX 78701 10 JANUARY 27, 1995
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