Foreign Capital Without Negative Side Effects Essay

1451 Words Dec 2nd, 2016 6 Pages
A very familiar theme continues to hover over Mexico specifically when it refers to the economic woes the political system continues to mismanage. Politicians that simply run for office to help themselves, while screwing the Mexican over time and time again. It is a behavior that has been in place since the Spanish conquistadors took over, by introducing new policies that benefited the white European while physically, morally, economically, and culturally destroying all social progress for the indigenous Mexican.
Mexico has always been rich in natural resources, landmarks and culture, but it has always struggled to maintain an economic system where... and once more Mexico found oil, one of its richest sources that could potentially gear them towards economic wealth. However, “The economic infrastructure was not prepared to digest suddenly huge infusions of foreign capital without negative side effects”. This may seem like Mexico was being cautious at making any rash decisions, and wisely so, by preventing to infuse vast amounts of money into a recovering economy that was still frail. This is because interest rates are one price for money, so prices are determined by supply and demand, and the supply of oil was exponential, the demand, the government 's thought would always be there. This overconfidence, ultimately proved to be a precarious move. “Although national income was insufficient to cover the cost, Mexico’s vast petroleum reserves made the international…

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