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How Donald Trump can short sell Mexico to become president

By Rafael Bernal
Republican presidential candidate Donald Trump points to an American flag as he walks on stage for a town hall meeting at Pinkerton Academy in Derry, New Hampshire on August 19, 2015. Photo by Matthew Healey/UPI | <a href="/News_Photos/lp/6271fac9aa1f098778815fb4591caec9/" target="_blank">License Photo</a>
Republican presidential candidate Donald Trump points to an American flag as he walks on stage for a town hall meeting at Pinkerton Academy in Derry, New Hampshire on August 19, 2015. Photo by Matthew Healey/UPI | License Photo

WASHINGTON, Aug. 18 (UPI) -- Donald Trump's plan to finance a border wall by withholding remittances and other measures -- it has already been called everything from "cruel" to "the greatest political document since the Magna Carta" -- may not be a campaign promise, but rather a means to obtain the presidency.

Because of Trump's fly-by-the-cuff reputation, it's easy to assume he merely stumbled upon an untapped vein of anti-immigrant anger and stayed on a profitable path. But is there any strategy behind his focus on immigrants?

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Trump and his advisers must be aware of the statistics. Net immigration from Mexico is at an all time low -- net-zero since 2005 and consistently on the decline -- immigrants are less prone to crime than the native population, new Chinese and Indian immigrants now outnumber new Mexican immigrants, and the United States actually needs more immigrants to balance its aging population.

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However, fear, as the old Mexican saying goes, "does not ride a donkey." Fear spreads quickly -- quickly enough for Trump to use fear to outpace his competitors, whose pale numbers and stagnant campaigns make it seem as if Jeb Bush and company are the ones astride an ass.

The other side effect of successfully propagating fear, Trump knows, is felt in financial markets. Emerging markets are particularly susceptible to rumors and speculation. Mexico in particular, because of a perfect storm of internal and external factors -- the government's reliance on declining oil revenue, a flawed tax reform, reduced foreign investment, internal violence and government corruption -- finds itself at its most precarious economic state since the crash of 1994.

With the free-floating peso at its lowest per-dollar value ever and past the psychological barrier of 17-per-dollar, both internal and external analysts have raised serious doubts as to whether the Mexican government has the tools, or the competence, to weather the storm.

A Mexican economic collapse would bring about increased poverty and violence, instability and, above all, a renewed surge of economic refugees trying to enter the United States. After all, most experts agree that today's net-zero migration is mostly due to a strong Mexican economy, not increased U.S. border enforcement.

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For already-skittish investors, a leading U.S. presidential candidate threatening to close off the remittance spigot -- it accounts for about two percent of the Mexican economy and is one of the country's top sources of foreign revenue along with oil, tourism and auto exports -- can only produce further uncertainty. Whether Trump's immigration plan purposely targeted remittances to disincentivize foreign investment or simply views increased Mexican economic instability as a side-effect is irrelevant -- it amounts to a short sell on Mexico.

It is a morally bankrupt strategy, but it could work. Historically, Mexican financial crises have led to increased illegal immigration to the United States. By adding uncertainty to an already teetering economy, Trump could help provoke a migratory crisis. If that happens before the general election, Trump's position will almost certainly be strengthened.

The painful irony is that, even if the strategy doesn't pay off during the electoral process, if a future Trump, Walker or Cruz administration were to cut off remittances, increased illegal immigration would follow. Trump's plan will only, enacted or not, augment illegal immigration.

Editor's note: The above article represents the opinion of its author and should not be construed to reflect the opinion of United Press International.

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