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Sign up with GoogleRand sinks R11.2833 to the dollar
- Thread starter FnuckNut
- Start date
Let me attempt to summarize some assumptions:
-Rand is dead.
-Interest Rates are high.
-No loans on existing home loans allowed.
-Petrol is not going down
-Petrol price will be stabilized or production will be slowed down by OPEC on Friday to raise the price.
-Gold as stable resource (safe haven) is not indulged.
-Imports will be extremely expensive
-Consumer stock will be less due to cash flow constraints
-Variations of consumer stock will be less due to potential sales (IOW less choice due to higher sale potential of certain products)
-Less entertainment expenses will be incurred.
-Service quality will go down due to less consumer expenditure (commissionable services)
-More houses repossessed due to learning curve of consumers.
-Local produce will need to be stimulated without loans (no venture capital)
-Job losses due to overhead cuts to ensure profit margins are met.
-Unemployment increases
-Bankruptcy increases
-Rand is dead.
-Interest Rates are high.
-No loans on existing home loans allowed.
-Petrol is not going down
-Petrol price will be stabilized or production will be slowed down by OPEC on Friday to raise the price.
-Gold as stable resource (safe haven) is not indulged.
-Imports will be extremely expensive
-Consumer stock will be less due to cash flow constraints
-Variations of consumer stock will be less due to potential sales (IOW less choice due to higher sale potential of certain products)
-Less entertainment expenses will be incurred.
-Service quality will go down due to less consumer expenditure (commissionable services)
-More houses repossessed due to learning curve of consumers.
-Local produce will need to be stimulated without loans (no venture capital)
-Job losses due to overhead cuts to ensure profit margins are met.
-Unemployment increases
-Bankruptcy increases
Last edited:
What theory?
Like most Mises economists, I've been assuming the dollar will rise steadily in relation to Euro over the next few years. That's why all my foregin investments are dollar-denominated.
The next to tank is China.
Maybe someone can advise me on this...
The rand is drowning but the petrol price (which fell more) is saving the economy.
Are we assuming that this equal valuation is balanced to benefit the consumer? We are keeping the petrol price the same as the fluctuation of the petrol price is not stable, however the flux of the rand is also not stable BUT is it assumed purchases / retail will adjust the difference and respect the scale?
Who is going to take the punch for these fluctuations? Let me guess the retail sector will not drop the prices due to cheaper oil as the price is unstable. They will increase the price directly with the RAND exchange as the imports are operational.
So I can assume to pay double for anything soon OR NOT?
Please advise me on this speculation…
Also maybe if someone can explain how the oil price affects operational production and transport in our republic?
The rand is drowning but the petrol price (which fell more) is saving the economy.
Are we assuming that this equal valuation is balanced to benefit the consumer? We are keeping the petrol price the same as the fluctuation of the petrol price is not stable, however the flux of the rand is also not stable BUT is it assumed purchases / retail will adjust the difference and respect the scale?
Who is going to take the punch for these fluctuations? Let me guess the retail sector will not drop the prices due to cheaper oil as the price is unstable. They will increase the price directly with the RAND exchange as the imports are operational.
So I can assume to pay double for anything soon OR NOT?
Please advise me on this speculation…
Also maybe if someone can explain how the oil price affects operational production and transport in our republic?
Does anyone know of a good local (South African) financial forum? Im not trying to detract from this one,...but ive been looking for something specifically focused on markets, saving, economy etc for people to participate in.
Thought this thread would be as good a place as any to ask.
Thought this thread would be as good a place as any to ask.
There are lots of things to take into account. Some local stuff (like steel) is charged for at the dollar rate so that will have an impact. Some of the will be replaced by local equvilents which should help the local market, on other occasions, companies/people will just not buy the items but in the cases where it is raw materials, prices will go up. Not quite to the tune of double but quite a bit. For example, car prices are likely to rise substantially if R/$ prices stay the same.
It sounds like this whole situation has been brought about by greedy hedge/currency funds looking to make a buck. And they wonder why the US public were so agro them with the bailout plan.
http://business.iafrica.com/news/1247800.htm
It sounds like this whole situation has been brought about by greedy hedge/currency funds looking to make a buck. And they wonder why the US public were so agro them with the bailout plan.
http://business.iafrica.com/news/1247800.htm
To add, we are assuming the Interest rates will be kept high due to the oil price accommodating the rand exchange...
BUT what about tomorrow then: http://www.fin24.com/articles/defau...leId=1518-1783_2414595&IsColumnistStory=False when they cut the oil production?
So we’ll end up with high oil price, RAND and interest rates?
Tito is on tonight in JHB, is he going to cut rates or should we sequestrate all our business just in case he doesn’t?
I need to stock up on my “spiced gold”, soon it will be too expensive to even drink away our sorrows…
BUT what about tomorrow then: http://www.fin24.com/articles/defau...leId=1518-1783_2414595&IsColumnistStory=False when they cut the oil production?
So we’ll end up with high oil price, RAND and interest rates?
Tito is on tonight in JHB, is he going to cut rates or should we sequestrate all our business just in case he doesn’t?
I need to stock up on my “spiced gold”, soon it will be too expensive to even drink away our sorrows…
OPEC have to be very careful or they will shoot themselves in the foot. The world economy is already on shaky ground and forcing up the oil price will just end up hurting it (and themselves) more. They can afford to cut, but not by too much. The oil price is now around the same price it was a year back and still far higher then it was 3 years ago. Increasing by too much will bring about a situation worldwide where there is high inflation and a recession which is very bad.
It's also quite complex because some of the OPEC countries need the money (eg Iran) and others don't.
I can understand that exports are good now, but the production and industries better not need finances from loan institutions.
Then also we produce so little due to our fat cats in this country being monetarily compensated for previous wrongs and indulging thus in foreign “easy trade” without investing in local production.
I agree with your statement, can we assume if the new car prices go up that my second hand car will then increase in demand and value? Will my house then be worth more due to expensive building costs with less foreign building and market saturation?
Why does it seem, we as the consumer are getting the short end of this socialist bailout of the US? Also why does it seem that the US is flourishing on their exchange rate but they were the one causing the recession and depression in the first place?
Can I assume that when the Capitalist US bailed out the financial crisis with Socialist rape of consumer investment they were referring to the whole world and not just the US citizens?
So if I’m spending any cent more on anything it goes to the US dictating government’s fund centralisation efforts fuelled by their supposed “free market system”?
We don't have problems with loans here so we should be alright there.
Hopefully our local production gets a spur from this. The clothing industry was hit hard and this may revitalise it.
For your car, it will probably hold its value better but remember that the high interest rate has the reverse effect of the increase in raw material costs. For houses, its the same as cars except that there is a big gap between the raw material costs and the sale price so it will probably keep dropping.
I think the consumer always gets the raw end of the deal in these types of situations. I don't think the bail out is causing the problems but rather the reckless lending US banks.
It is about to break the R19/GBP mark..
Too late:
$ = R 11.72
£ = R 19.03
€ = R 15.01
Oil = $ 63.74
Gold = $ 710.95
Last update:
23 Oct 2008 13:52:02
Thanks for the replies Abe...
But I can speculate the banks will not be opening their wallets soon, also with the new consumer protection Bill coming (a good thing), they will be even more negative about enslaving consumers and potential businesses.
The banks most probably think like a typical shylock, if they can’t ensure the same profit margins they will raise the audience risk profiles. I think they are a bit worried what they invest now as tomorrow it might be worth nothing.
One great thing about this crisis is the banks are going down finally…not just us.
But I can speculate the banks will not be opening their wallets soon, also with the new consumer protection Bill coming (a good thing), they will be even more negative about enslaving consumers and potential businesses.
The banks most probably think like a typical shylock, if they can’t ensure the same profit margins they will raise the audience risk profiles. I think they are a bit worried what they invest now as tomorrow it might be worth nothing.
One great thing about this crisis is the banks are going down finally…not just us.
The Chinese are reducing taxes on steel exports and are employing mass subsidies of their other factories as exports decline. We may be swamped with Chinese goods
which we can't afford but with which the local businesses can't compete - eg clothing. China is feeling the pinch and if they don't continue the growth, instability can follow and even a civil war over there.
which we can't afford but with which the local businesses can't compete - eg clothing. China is feeling the pinch and if they don't continue the growth, instability can follow and even a civil war over there.
It is about to break the R19/GBP mark..
It broke through that last night already ...