Scooby_Doo
Honorary Master
All the money will rush back to the US and in the opposite direction for everyone else.
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The ZAR Exchange Rate Thread
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All the money will rush back to the US and in the opposite direction for everyone else.
I understand why you would think but the EFF (and DA to an extent) was neutered when Zuma left. If the ANC pivots too hard into EFF territory then they lose even more votes. EFF is not as popular amongst the elderly and rural voting populous. That is still ANCs stronghold. If anything we will see more independent candidates emerge and smaller parties taking votes. But we will see when the elections roll around this year. Who knows at this point.
d0b33
Honorary Master
The EFF have been gaining ground against the ANC and the DA are left in the dust. Don't underestimate the reality of Malema becoming president some time in the future. We're already F'd so enjoy the stronger Rand while you can.
thestaggy
Honorary Master
Far from. The EFF are the fastest growing political party in SA and are particularly popular with the youth, a demographic that is massively unemployed, accounting for two-thirds of SA's total unemployed.
20-year olds desperate for jobs are no longer going to listen to their grandparents come election time and feel obliged to vote ANC. The EFF is telling them what they want to hear and making promises desperate people cling to. The ANC's decision to aggressively pursue EWC is a direct result of their drop in popularity and the surge of support for the EFF's radical populist ideology.
L-Dog
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Short term - maybe as strong as R 13.00 to the dollar
EFF is a populist movement and don't fit the demographic of the majority of the voting population. Their growth was only in the first year or two. What you saw afterwards were people abstaining from voting.
I’m not an optimist despite me claiming earlier the year and last of a recovery but.. yah not gonna happen.
There are fiscal factors and economy stuff that will prevent that from happening .. ie we have a debt level of about 80% and jury out about whether we experiencing a commodity super cycle. The later requires the developed and developing to be on an up cycle which isn’t very likely sustainable longer term.
If SA wants to push for 10/$, we’d need (in addition to other international market factors)
1. Very good numbers on the mini budget,
2. Continued reduction in deficit,
3. Further reductions in SOE debt etc,
4. Labour settlement in the coming months without major increase & reducing that bill..
5. A lot of other reforms that have been stacking up and yet to be delivered.. ie change up in SOEs & ownership, splitting up of Eskom, a lot of automation in government systems involving business, home affairs, tourism, etc to make more efficient etc
6. More corrupt folk headed to court and out of gov.
7. Remedial action of commission to be implement and supported across political parties(extremely unlikely and it will likely be very punitive).
8. Vaccination drive stabilizing at a reasonable rate.. this hinges almost entirely on J&J due to vaccine nature.. kinda why the current hold is annoying.. amazing how Trump’s fraud and corruption impacts us but you won’t find a single conservative in SA say a damn thing about it hey
9. International Tourism kicking off again.. heavily dependent on point 8.
So yah.. at best 1-3 of those happening or sufficient process to keep current rate. So I’d bet it goes stronger and stabilizes about R13/$ almost entirely due to abroad factors.
BUT .. people generally are wrong about the rand as it’s not a reflection of just sentiment (though does carry some into country) but in SA a reflection of trade, surplus and commodity sales and since it’s a gamble on what’s truly happening who knows.
Pandemic sure is shaking things up along with usual dollar monetary manipulation. The global CIT they pushing is interesting as it looks like US trying to set the rate for everyone so I don’t see that being accepted easily.. who knows.
I'm not saying the rand is going to strengthen to under R10, I'm saying the dollar is going to weaken to this level.
So the reasons you provide are immaterial to my point.
Also I'm not saying the rand will stay under R10, it will just break that level.
thestaggy
Honorary Master
G7 have agreed on a Global minimum CIT of 15%
This is gonna be interesting as the US needs their tax rate to be upwards of 25-28%. Problem is the US is doing, well Yellen wants to try, what we did with our taxes ie trying to drop rebates to simplify it.. I think with no rebates they can getaway with a flat 21% rate.
Now the question is how other countries handle this end what the repercussions will be for eg Ireland, Netherlands, Luxembourg etc where, particularly for the former two, IT has set up shop for tax benefits and grew from there..
Gonna be interesting.. I guess the US doesn’t like capitalism when it goes against them.. from monetary systems to now competition with tax haha.
This is gonna be interesting as the US needs their tax rate to be upwards of 25-28%. Problem is the US is doing, well Yellen wants to try, what we did with our taxes ie trying to drop rebates to simplify it.. I think with no rebates they can getaway with a flat 21% rate.
Now the question is how other countries handle this end what the repercussions will be for eg Ireland, Netherlands, Luxembourg etc where, particularly for the former two, IT has set up shop for tax benefits and grew from there..
Gonna be interesting.. I guess the US doesn’t like capitalism when it goes against them.. from monetary systems to now competition with tax haha.
That’s a worry but also kinda what you get with disillusioned youth due to insanity unemployment rates.
People need to relook at history and see what happens when youth unemployment goes > 50%.
Btw part of the deal is that you pay tax as a corporate where you earn it selling the service/product.. not where the IP is held 
So yah.. Let’s see what happens as they push this to G20 and beyond as Ireland, Netherlands etc gonna be big losers.
So yah.. Let’s see what happens as they push this to G20 and beyond as Ireland, Netherlands etc gonna be big losers.
Exactly, 2014. They only started in 2013 and didn't really get a chance to campaign. From 2016 their popular vote has stagnated at ~10%. Will be interesting to see what happens in October since both the EFF and ANC are afraid of answering to the public this year.
thestaggy
Honorary Master
100%. The country is in the exact state in which parties like the EFF thrive. Populist, radical ideology does not flourish when young people have hope and a future. The ANC really is doing electioneering for the EFF simply by running the country the way they are.
rvZA
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For once I do agree with you. I suspect that the Dollar will be collapsing fast and we could well see the Rand below R9 or even below R8 to the Dollar. The US is simply wanting to spend too much, so much more than they can afford. The levels of inflation they are currently experiencing is nothing compared to what is about to come. They will be worse off than any other financial collapse they have ever experienced and there is a possibility that the US may never recover again.
Once Biden implements the tax increases, like with Obama, they will see a huge outflow of big companies from the US to the UK and EU. After this, there will be no turning back or a remote chance of their economy recovering again while the Democrats as a political party exists.
Johnatan56
Honorary Master
I very highly doubt it, US taxes still aren't that high yet and the business environment is still better.
The US is not close to running out of money, you need to take into account who they owe that money to.
No, they will recover just fine as long as the economy keeps going, if businesses don't collapse, they'll have no problem continuing as they are now. The dollar hasn't lost that much value against e.g. the Euro, the Rand actually strengthened in this case.
rvZA
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I would have agreed with you. But, I am not so sure. Under the Biden administration, the US has a government similar to that of South Africa under the ANC. Socialism does not work. You cannot build an economy on socialism.
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