Rand breaks through R16 to US Dollar

[semaphore]

I feel torn. My hubby earns USD. Food however is getting so expensive. A pack of three peppers was R36.00 from P 'n P... 4 avocados is R50. Prices will vary from area to area, but if we are going to import food, we are in a lot of trouble.

Just grow your own peppers.

 

[cerebus]

I feel torn. My hubby earns USD. Food however is getting so expensive. A pack of three peppers was R36.00 from P 'n P... 4 avocados is R50. Prices will vary from area to area, but if we are going to import food, we are in a lot of trouble.

If your husband earns USD he has a natural hedge against any price inflation that can happen. I don't see how there could be any downside for you. If peppers go up, your husband's income probably also went up by more than the price hike.

 

[JStrike]

Only this wasn't common depreciation, it was an overnight billions-of-rands freefall brought on by an idiot president who simply has no clue of how the world works.

Poor you.. much investment, such affected, wow. Seen the price of import mealie meal lately?

I really have no idea as to it's price. I don't each much polenta (or whatever else you make with cornmeal)

 

[ngwe23]

Cause and effect. The country is in such a cr*p state which is causing the currency to slide, not the other way round. Also, ZAR is very high up the list of worst performing currencies, so your comment "with just about every other emerging market currency" is a bit disingenuous.

The currency is sliding because:
1. China
2. US interest rates on an upward trend

 

[Jola]

I'm waiting for the Iwisa revolt. Due to the drought and high reliance upon maize imports (in USD) we are going to see pap prices going through the roof. Perhaps that's something the poor can understand? Ultimately they'll suffer more, at least most of us have some sort of buffer and aren't playing jump rope with the bread line.

Poor are going to suffer, their view that it's just the whites that will be influenced are misguided :

1) Maize prices are set in USD. And then we need maize imports due to the drought.

2) Oil prices are set in USD - taxi fares will go up.

3) Chickens are fed maize - chicken prices will go up.

4) Due to drought and other input costs, beef will go up.

5) Due to ZAR crash, clothing from China will go up.

Etc, etc.

#ProudlyBroughtByANC

Maybe the poor don't buy as much fancy technology, but their purchases will also become much more expensive,

 

[Jola]

The currency is sliding because:
1. China
2. US interest rates on an upward trend

Those play a role, but the corrupt and incompetent ANC also play a big role.

For example, increasing local interest rates would have offset the US interest rate increase. Local rates need to increase by a few %, it should have happened over a period but wasn't done.

Of course having JZ played a significant role in the crash of the ZAR.

 

[ngwe23]

I'm waiting for the Iwisa revolt. Due to the drought and high reliance upon maize imports (in USD) we are going to see pap prices going through the roof. Perhaps that's something the poor can understand? Ultimately they'll suffer more, at least most of us have some sort of buffer and aren't playing jump rope with the bread line.

The horse you are on is very high, oh bourgeoisie. I suggest you climb down to our level

 

[Ho3n3r]

Poor are going to suffer, their view that it's just the whites that will be influenced are misguided :

1) Maize prices are set in USD. And then we need maize imports due to the drought.

2) Oil prices are set in USD - taxi fares will go up.

3) Chickens are fed maize - chicken prices will go up.

4) Due to drought and other input costs, beef will go up.

5) Due to ZAR crash, clothing from China will go up.

Etc, etc.

#ProudlyBroughtByANC

Maybe the poor don't buy as much fancy technology, but their purchases will also become much more expensive,

We import the chickens themselves as well, so either way it will go up.

 

[Vrotappel]

The currency is sliding because:
1. China
2. US interest rates on an upward trend

&

The ANC factor. Sorry nobody in the world trust your commie friends, that's why the ones with money is running.

 

[Jola]

We import the chickens themselves as well, so either way it will go up.

Yes. Inflation for the poor will escalate dramatically.

 

[Ho3n3r]

The currency is sliding because:
1. China
2. US interest rates on an upward trend

Zuma's Nene blunder blew the myths regarding SA having minimal effect on its own economy right out of the water. Investor confidence has been shattered - they're pulling out and then treading very lightly for the future regarding this country.

 

[ngwe23]

Those play a role, but the corrupt and incompetent ANC also play a big role.

For example, increasing local interest rates would have offset the US interest rate increase. Local rates need to increase by a few %, it should have happened over a period but wasn't done.

Of course having JZ played a significant role in the crash of the ZAR.

It was not done because that was going to kill off any chances of growth which are already pitiful. Why don't you educate me then. Why would the reserve bank increase interest rate in an environment of slow growth, inflation within target band and high household indebtedness?

 

[XennoX]

The lack of economic understanding in this thread is stunning. If you think the ANC is the predominant driving factor in the Rand's decline you're ignorant. No one cares about South Africa's economy. We will always play second fiddle to the likes of USA, China, Russia & Europe. After the 2008 crisis, the world at large relied on Russia & China to be the economies that drive the recovery. Russia's economy is tanking due to the economic sanctions it is facing and China's economy is tanking. This creates panic in investors and suddenly they pull money out of emerging markets and place that money in safer markets like the USA, ergo the Rank tanks. The world economy is in a crisis. The only effect the ANC's antics will have is scare a few more investors away, but the majority of investors will run away because the emerging markets are tanking and South Africa is classified as an emerging market.

 

[ngwe23]

Zuma's Nene blunder blew the myths regarding SA having minimal effect on its own economy right out of the water. Investor confidence has been shattered - they're pulling out and then treading very lightly for the future regarding this country.

Element of truth but you are exaggerating, perhaps it is hyperbole. Investors were already pulling out. Zuma gave them and excuse or accelerated the process. The threw petrol into and an inferno. Investors are treading lightly in any emerging market not just SA. Just look at Brazil and Russia. Both in recession.

 

[JStrike]

The lack of economic understanding in this thread is stunning. If you think the ANC is the predominant driving factor in the Rand's decline you're ignorant. No one cares about South Africa's economy. We will always play second fiddle to the likes of USA, China, Russia & Europe. After the 2008 crisis, the world at large relied on Russia & China to be the economies that drive the recovery. Russia's economy is tanking due to the economic sanctions it is facing and China's economy is tanking. This creates panic in investors and suddenly they pull money out of emerging markets and place that money in safer markets like the USA, ergo the Rank tanks. The world economy is in a crisis. The only effect the ANC's antics will have is scare a few more investors away, but the majority of investors will run away because the emerging markets are tanking and South Africa is classified as an emerging market.

This is finally a better understanding of global markets.
And a general FYI, the yuan was devalued again and the shanghai stock exchange stopped trading after a 7% slump (The second time this week). Emerging markets are being hammered

 

[Ho3n3r]

The lack of economic understanding in this thread is stunning. If you think the ANC is the predominant driving factor in the Rand's decline you're ignorant. No one cares about South Africa's economy. We will always play second fiddle to the likes of USA, China, Russia & Europe. After the 2008 crisis, the world at large relied on Russia & China to be the economies that drive the recovery. Russia's economy is tanking due to the economic sanctions it is facing and China's economy is tanking. This creates panic in investors and suddenly they pull money out of emerging markets and place that money in safer markets like the USA, ergo the Rank tanks. The world economy is in a crisis. The only effect the ANC's antics will have is scare a few more investors away, but the majority of investors will run away because the emerging markets are tanking and South Africa is classified as an emerging market.

Sounds like you don't know as much as you seem to think either.

The Rand fell sharply against all currencies, major or otherwise, after Zuma's blunder. It was clear for all to see. Investors fled. When he re-hired Gordhan, it moved in the other direction immediately. Not sure what more evidence you need to see that it does indeed play a role. It's not the be all and end all, but it is a factor.

 

[Jola]

It was not done because that was going to kill off any chances of growth which are already pitiful. Why don't you educate me then. Why would the reserve bank increase interest rate in an environment of slow growth, inflation within target band and high household indebtedness?

It was mismanagement that caused the high indebtedness in the first place, that should never have been allowed, and the price for that massive blunder has to be paid, sooner or later. TANSTAAFL.

The economy won't be much affected by higher interest interest rates, the ANC has already destroyed it to the extent that I do not believe that it is that interest rate sensitive. Again, it is a price for incompetence that will have to be paid.

I don't believe that inflation is within the target band, the contents of the basket need to be seriously revised. My personal inflation rate definitely exceeds 15% per annum, and these increased figures will start showing up in official figures quite soon. The influence of the ZAR collapse will also start feeding in any day now.

Personally I would like to see the ZAR dropped and a switch to another currency (USD, EUR, Yuan, in that order of preference). The Government has already demonstrated that they do not have the competence to manage a currency / economy.

 

[ngwe23]

The lack of economic understanding in this thread is stunning. If you think the ANC is the predominant driving factor in the Rand's decline you're ignorant. No one cares about South Africa's economy. We will always play second fiddle to the likes of USA, China, Russia & Europe. After the 2008 crisis, the world at large relied on Russia & China to be the economies that drive the recovery. Russia's economy is tanking due to the economic sanctions it is facing and China's economy is tanking. This creates panic in investors and suddenly they pull money out of emerging markets and place that money in safer markets like the USA, ergo the Rank tanks. The world economy is in a crisis. The only effect the ANC's antics will have is scare a few more investors away, but the majority of investors will run away because the emerging markets are tanking and South Africa is classified as an emerging market.

Thank you, sir. Unfortunately, hatred for a certain political party run deeper than logic.

 

[icyrus]

This is finally a better understanding of global markets.
And a general FYI, the yuan was devalued again and the shanghai stock exchange stopped trading after a 7% slump (The second time this week). Emerging markets are being hammered

Sure, but the unavoidable truth is that our internal policies are going to result in a downgrade to junk status this year for South Africa. There wont be anyone else left to blame at that stage but the ANC.

 

[Xarog]

This is finally a better understanding of global markets.
And a general FYI, the yuan was devalued again and the shanghai stock exchange stopped trading after a 7% slump (The second time this week). Emerging markets are being hammered

I agree that the latest jump has not been caused by the ANC, but Zuma's incompetence has definitely added to the problem.

After the ratings downgrade, to sack our finance minister and bring in someone who was definitely underqualified for the position had a lasting and detrimental effect. Now everyone knows that the country's leadership is completely ignorant when it comes to managing the economy and that legacy is going to hurt us for a long time to come.