The ZAR Exchange Rate Thread

krycor

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FANG = Facebook, Amazon, Netflix, Google.. all down.

Minor wobble. 2-4%

Even more fun for US lovers..


Trump gonna tweet something against IMF.. wonder where SA sits post Zuma
 
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NarrowBandFtw

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The major mess trump is creating
Eh? The Fed, under Obama's guidance, expanded money supply to never before seen levels and bailed out failed business that should not have survived in the first place.

The Fed's easy money is what lead the stock market higher, there's no actual growth it is all fake.

The Fed kept pretending the economy is fine and eventually analysts were no longer believing them unless they raised rates to prove it. The Fed started their long overdue tightening cycle under the Obama administration as well.

Now this is magically on Trump?!? No. It would help if Trump stopped claiming the fake growth we see these days is somehow his doing, it isn't and it isn't real anyway. That's a mistake imo, it also attaches his name to the big crash that is coming when, again, he had nothing to do with either the fake growth we've been seeing or the crash that will be correcting it.
 

rietrot

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FANG = Facebook, Amazon, Netflix, Google.. all down.

Minor wobble. 2-4%

Even more fun for US lovers
The US is set for a correction. That's going to be fun for everyone not just US lovers.
The only thing is how will that affect us seeing we are already shîtter and had underperformed for the last 4 years.
 

rietrot

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Maybe, but there is a general consensus that the ZAR is undervalued, let's see.
I never see the economists that make this claims just put up the math. The Rand should on the long term depreciate against the dollar by the difference of the inflation between us and them. The long term graph looks about right to me. Maybe we should be somewhere between 13-14.

Agree, let's see.
 

Swa

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I never see the economists that make this claims just put up the math. The Rand should on the long term depreciate against the dollar by the difference of the inflation between us and them. The long term graph looks about right to me. Maybe we should be somewhere between 13-14.

Agree, let's see.
No inflation is also influenced by the R/$ rate. The numbers are there and according to them it should be no more than R7/$. The real graph (not the one starting with the Rand getting some major knocks) shows this to be more or less correct. Investors have been getting a free ride so far so to speak.
 

krycor

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Eh? The Fed, under Obama's guidance, expanded money supply to never before seen levels and bailed out failed business that should not have survived in the first place.

The Fed's easy money is what lead the stock market higher, there's no actual growth it is all fake.

The Fed kept pretending the economy is fine and eventually analysts were no longer believing them unless they raised rates to prove it. The Fed started their long overdue tightening cycle under the Obama administration as well.

Now this is magically on Trump?!? No. It would help if Trump stopped claiming the fake growth we see these days is somehow his doing, it isn't and it isn't real anyway. That's a mistake imo, it also attaches his name to the big crash that is coming when, again, he had nothing to do with either the fake growth we've been seeing or the crash that will be correcting it.
True.. but Trump dropped the Taxes in a major way, started a Trade war and basically removed the US from global leadership by basically saying it’s everyone for themselves in a global economy.

This is like one idiot abusing water when there is drought.. well no one else has to keep cutting in their side to support the rest or in this case the US directly. The US lives on credit from other nations, ironically, China being a big one and as I’ve been saying since started doing these things.. he has actually accelerated the US empire falling apart.


The US is set for a correction. That's going to be fun for everyone not just US lovers.
The only thing is how will that affect us seeing we are already shîtter and had underperformed for the last 4 years.
So if there is one thing that Trevor Manual, Tito Mbweni, Maria Ramos? etc did in combo post apartheid was quickly realize that you don’t want to be holding debt in USD as you have less control over your future. Hence they reduced it and preferred ZAR based debt.

Of course Zuma spent like no-ones business but thank our lucky stars it was ZAR based. Of all the emerging markets, SA is almost unique in this aspect which is why earlier this year when the others currency crashed with Turkey, ZAR was a bit more resilient(u can find economists actually mentioning this).

Yes we have political issues & internal problems to deal with, debt etc too but that’s controllable internally ironically much like USD debt was to US when the % was lesser than the < 100% GDP (which no country has ever managed to sustain except US as a reserve).

If the $ crashes, it wont take the ZAR with it. Will be good for us.
USD stock market crash takes everyone who invested with it.. SARB? I don’t think they have a large position in US Equities but then I wasn’t looking for them and big is relative to their portfolio.

So I dunno.. from a SA stock pov, dunno.. money has to be invested somewhere and the QT will mean money going back to emerging markets slowly to take more risk.

BTW this stock market issue in the US could just be a wobble at the moment like earlier this year.. it hasn’t fallen enough to be a full correction. I still think that and a US recession coming in 6-9 months.

No inflation is also influenced by the R/$ rate. The numbers are there and according to them it should be no more than R7/$. The real graph (not the one starting with the Rand getting some major knocks) shows this to be more or less correct. Investors have been getting a free ride so far so to speak.
Yes, US stock market for the last decade has been a rigged lottery with almost Monopoly money. It just went up and up.. the bad thing for everyone is there is another thing that just went up and up in this period.. property! USD QE heavily influenced property prices globally.. gonna scary to watch what happen.
 

rietrot

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So if there is one thing that Trevor Manual, Tito Mbweni, etc did in combo post apartheid was quickly realize that you don’t want to be holding debt in USD as you have less control over your future. Hence they reduced it and preferred ZAR based debt.

Of course Zuma spent like no-ones business but thank our lucky stars it was ZAR based. Of all the emerging markets, SA is almost unique in this aspect which is why earlier this year when the others currency crashed with Turkey, ZAR was a bit more resilient(u can find economists actually mentioning this).

.
Pros of Rand based debt. We can inflate out of it.
Cons. That inflation.
But generally I agree, It is better than $ based debt.
 

NarrowBandFtw

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True.. but Trump dropped the Taxes in a major way, started a Trade war and basically removed the US from global leadership by basically saying it’s everyone for themselves in a global economy.
All of which is pretty fine imo, although the trade war involves a bunch of protectionist policies that I disagree with strongly.

he has actually accelerated the US empire falling apart
And for that we must be thankful, it needs to happen, I just wonder sometimes if he's doing it on purpose or through ignorance.
 

SaiyanZ

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US stock market doing poorly for a while will be good for the Rand as the JSE is usually not affected as much. USD will weaken and Rand strengthen slightly.
 

Visser

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The US will not fall. There is only a correction underway. It will pick up again and the economy will boom again. Happened before and will happen again in future. China will never lead the world. They are not able to do this and neither are they capable.
 

rietrot

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The US will not fall. There is only a correction underway. It will pick up again and the economy will boom again. Happened before and will happen again in future. China will never lead the world. They are not able to do this and neither are they capable.
I agree this time, but empires do fall. And there is a longer term correction aswell that might not be recoverable.
I find this explains it really well.
 

TysonRoux

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The US will not fall. There is only a correction underway. It will pick up again and the economy will boom again. Happened before and will happen again in future. China will never lead the world. They are not able to do this and neither are they capable.
Now you've ruined the friendship.
 

rietrot

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Not true. China once had the opportunity. They now regret it and are not going to make the same mistake.
China's economical machine runs on exporting junk and building gost cities, if that ends abruptly they'll have plenty of young men with nothing to do, which historically results in revolution or they can channel that energy into some conquest.

That's why the trade tariffs are such a good thing it scales things down slowly, but it might backfire and give china an enemy to blame for when things go wrong.
 
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