The ZAR Exchange Rate Thread

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BBSA said:
They can borrow money at 1.5% we must service our debt at more than 8%.
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Not if you can increase inflation. Why they want to get their hands on the reserve bank. If inflation is 10% then that 8% effectively pays them 2% interest.
 
Swa said:
Not if you can increase inflation. Why they want to get their hands on the reserve bank. If inflation is 10% then that 8% effectively pays them 2% interest.
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By the time the ANC nationalizes the Reserve Bank, inflation is likely to hit the 300%+ mark in any event. They fell off the fiscal cliff and there is no more turning back.
 
BBSA said:
You will not be able to sell government bonds at 8% if your inflation is 10%
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Not what it's about. Bonds are already sold.

JayM said:
I think the words "exchange controls" got everyone freaked out.
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Seems everyone was waiting for a plan to be announced. Turned out there's none.
 
SaiyanZ said:
USA debt to GDP ratio is over 100% so I'm not sure if this debt vs GDP comparison means much. Unless the USA is also fcked.
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They are, but they get to export their inflation to the rest of the world through printing the world's reserve currency, so they get to live on borrowed time longer than most.

For an insignificant shithole like us it is an entirely different story.
 
SaiyanZ said:
USA debt to GDP ratio is over 100% so I'm not sure if this debt vs GDP comparison means much. Unless the USA is also fcked.
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Yes and no..

So the US is in a tricky situation as they make money doing nothing due to being the reserve currency. Ie for every global transaction between nations, they have to transact in dollars..ie involve a US bank.

All was fine in the world and that’s kinda what gave them their self importance to a degree..But Trump has actively speed up the disgruntlement with the status quo via trade wars and using the system to subjugate and push their agenda, something that they always say they will refrain from (let’s be honest they never did).

Anyway.. EU, China, Russia etc are now all heavily investing setting up their own systems.. so what? Well there goes passive income, foreign holding (which has already been dwindling down as people now trade smaller values directly in euro, yuan, rubble) in reserves etc and this as their deficit grows and China labour is automating and entering service economy. Combo that with their state and municipal debts, their future commitments vs pensions, army cost etc and the US is in a hell of a lot worse position that it looks like on paper.

384D2183-7362-437C-BCF5-63199F2CD0FB-8910-000003BBCA2488DE.JPG

www.cnbc.com

Real US debt levels could be 2,000% of economy, a Wall Street report suggests

Putting all that together paints a daunting picture but one that requires nuance to understand. Paramount is realizing that not all of the debt obligations are set in stone.
www.cnbc.com www.cnbc.com

All in all as nations become more populist and/or demand fair treatment, US position in the world becomes lesser. They use to give a timeline for reserve status challenge being 50yrs .. lately it’s 10yrs out.
 
Wow, the Rand has taken a knock in the last 24h. What on Earth are the Comrades doing?
 
Yeah go for Zar. It will be the strongest currency today. It will break the back of the Dollar and Pounds. Announcement will only be late tonight.
 
So since it seems the negative outlook was factored in, do you guys think we will remain at current ZAR strength for the short term? Or a gradual decline?

Then a big knock in 3 months when Moody's actually do downgrade us? And if so, by how much?
 
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