The ZAR Exchange Rate Thread

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Dave123 said:
I wouldn't call it selectively shared, more like commonly shared by all traders ;).
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But it is not neccessarily commonly shared. Each trade happens between the buyer and the seller. Others get to witness the affair and in a system where people are trying to compete then the numbers may align quite closely; but the fact of the matter remains that the buyer may often be purchasing the goods at a value below what the value is to him.

Supply and demand is still a system that functions on the notion of mutual consent in order to function. That consent is ultimately an arbitrary decision made by a clever computer.
 
Xarog said:
Supply and demand is still a system that functions on the notion of mutual consent in order to function. That consent is ultimately an arbitrary decision made by a clever computer.
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And that clever computer computes that price from a multitude of sales ongoing at a time, not just a single sale between one seller and one buyer. It is anything but selective, averaging it out over all the transactions in that supply and demand scenario.
 
Dave123 said:
And that clever computer computes that price from a multitude of sales ongoing at a time, not just a single sale between one seller and one buyer. It is anything but selective, averaging it out over all the transactions in that supply and demand scenario.
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It is always selective. Doesn't matter how wide you try to make it, it's still a selection based upon a number of perceiving entitities that derive a value of their perception.

It will always be a selection and describable as a selection. Estimation remains estimation.

Edit: To put it in practical terms, it's entirely possible that the vast majority of the market believes a lie and is basing the value they give a commodity on that lie being true. You can never absolutely discount this possibility.
 
Just bashed into three old Irish pensioners visiting Za from ireland, one of their first topics of conversation, whilst we bobbed in the surf at the Strand beach......How cheap it was for them to visit and getting cheaper by the day...

They still had two weeks to enjoy their African bonanza!
 
Swa said:
Yup, it's artificial whatever the means is. The true value of our currency is closer to R7/$ or maybe R8 after Zuma ****ed up.
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Have you got any dollars? I would like to offer you R9 each please. Serious.
 
Dave123 said:
Not when discussing a commodity. I could say a banana is worth a $100, doesn't mean it is, it's only worth what others will pay. I may have overvalued it, but it's true value is that price it actually sells for.
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Not true. Everyone could try to sell bananas for R100 but that doesn't mean it's their true value. It simply means there's a shortage of bananas so they charge what they can get away with. A banana is just a fruit and if you sell on a first come basis its real value is just that of any other fruit. Europeans are coming here on extended holidays longer than they could in their own country. If our currency was truly worth what they pay for it they won't be able to. They can only do it because our currency is undervalued. If we look at the real value it takes about R7 to do in our country what $1 can do.
 
Swa said:
Not true. Everyone could try to sell bananas for R100 but that doesn't mean it's their true value. It simply means there's a shortage of bananas so they charge what they can get away with. A banana is just a fruit and if you sell on a first come basis its real value is just that of any other fruit. Europeans are coming here on extended holidays longer than they could in their own country. If our currency was truly worth what they pay for it they won't be able to. They can only do it because our currency is undervalued. If we look at the real value it takes about R7 to do in our country what $1 can do.
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No, I don't think you quite get what undervalued means. A brand new Ferrari for $1000 is undervalued, a bunch of bananas for 1c the same. Not everyone could sell a banana for $100 because that's not its true value and no one would buy it at that price, it's true value is what it sells for in the supermarket.

You might think the Rand is undervalued, that's your opinion and quite valid, but it's true value is what the world is currently trading it at.
 
In essence , we are not exporting as mich commodities as we would , thus earning less foreign currencies, added to the mix, all the world's emerging markets have been hammered over the last 18 months, sometime down the road, the world will start to demand more resources and growth will occur....... The only downside, is that in all likelyhood , it will get worse before it get's better...
 
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