Rand weakens

[Dave A]

Part of this article - MPC increases repo rate to 5.5%:

Marcus outlined the balancing act faced by the Reserve Bank, which included reacting to sharply depreciating currencies, capital outflows, slowing growth, rising inflation, a significant current account deficit and deteriorating consumer confidence. These factors combined, said Marcus, pose "policy challenges" and "very difficult trade-offs for many emerging markets".

It's a pretty deadly cocktail. And frankly increasing the interest rate isn't going to be enough to unravel it - not by a long shot.

Worst of all, that list is far from complete.

Add crippling strikes, electricity supply shortages that prevent expanding industry, bureaucracy that is killing SMME's, "service delivery protests" (which would be called riots in most other parts of the world)...

[tec0]

Currently it appears that people demand more money and that is not the solution. My prediction is dire at the moment. We need a stronger rand... That means less will have more buying power and really that is healthy...

Right here we go possible prediction 2014 from February to May.

We will see decrease in goods export,
no new exports,
lower productivity,
a moderate decrease in power demand,
massive decrease in power production,
higher fuel cost,
higher import cost,
higher food prices,
lower quality of all foods across the board,

a decrease in disposable income that will have an impact on commercial profit.

In short job losses across the board... The only upside will be found in the repo section so if you have money now is the time to look at all those repo properties in developed arias.

But my models indicate a shitstrom

Right now there is a small light in the tunnel. Other global economies are also weakening so just maybe some companies will switch supply to South Africa but we are high risk so prozac anyone?

[wynn]

Well watching LNN with Loyiso last night, many a truth is spoken in jest, the comment that we have nothing to export but raw material which is being demanded less and less means that we have nothing else to sell to strengthen the rand and that even Botswana is doing better than us.

[ians]

Start moving back up into Africa ? I am seeing a small trend in this direction, bit nervous to say the least. After spending 20 months in Angola in a bush war and witnessing what I did, I cant see myself taking my wife and children up. Not that it is much safer at this point in time here in this country, my daughter was attacked again 2 days ago robbed at knife point at the robots in front of Macdonalds in Pinetown I am getting a little tired of my kids being bullied. They had a go at me in Pinetown at a robot a while back, one on either side of the vehicle, the one on the drivers side had what looked like a bayonet which he dropped out his sleeve, I think when they saw the 9 mm and I was ready for them they decided not to get into a gun battle with a knife...pity. The sad part is there is nothing you can do. There where too many people around for me to pick a fight.

[AndyD]

Well watching LNN with Loyiso last night, many a truth is spoken in jest, the comment that we have nothing to export but raw material which is being demanded less and less means that we have nothing else to sell to strengthen the rand and that even Botswana is doing better than us.

This has always been a problem, apart from one or two manufacturing niches that do very well but aren't enought to make even a blip in the overall numbers, we don't manufacture and export anywhere near enough. The interest rate rise along with troubled Rand could make this space more attractive though, who knows?

[desA]

SA needs to get the basics right, otherwise there will be no mechanism to create value.

At the moment, the US is fleecing emerging nations, via return of USD. I've seen this trick applied in SE Asia in 1997/8. The US profited big-time from that crisis. I remember reading about this mechanism, while living in Chicago, around that time.

So, in order for SA to strengthen the value of the ZAR, its economy has to out-perform the US. How to do this?

1. Education.
2. Work ethic. (WORK => 4-letter swearword. HARD WORK => does the swearing never end?)
3. Fair access to work, irrespective of race, to gender.
4. Good government (not the rubbish SA has at them moment).
5. Stability.
6. Peace. (A nation at war with itself cannot stand strong).
7. ...

At the moment, the US is winning the smarts battle...

[Justloadit]

7. Increase the power generating infrastructure (ESKOM), with out this you can not manufacture. To manufacture you need lots of energy, currently we can not expand as the electrical supply system is running beyond capacity.

[tec0]

7. Increase the power generating infrastructure (ESKOM), with out this you can not manufacture. To manufacture you need lots of energy, currently we can not expand as the electrical supply system is running beyond capacity.

True words

We lack the resource to make it all happen and that is POWER electrical power. Truth is nuclear power was always the answer let me explain why without going off topic or I will try and stay on topic "try"

Realistically South Africa is spending a massive amount of wealth to build two "outdated" Power Stations that needs massive and "expensive" support like transport, coal mining and a stable supply. Each of those mentioned support systems demands money thus we pay for it. Now consider that if you build a physically smaller nuclear power plant that has the ability to put out much more power then your "outdated coal Power Stations" with little support "waste management" already you are saving money and keeping contraction cost down.

Smaller construction means a realistic time table that promises a stable energy source and that is exactly what we need for companies to invest. But our mentality towards our exports must change. Example ask large companies to build refineries so that the quality of goods can go up thus we get more money into the country...

[Justloadit]

The use of nuclear power is a no brainer, when you consider the amount of mass from which energy can be created is mind boggling, something like 20 million times. In other words, a ton of nuclear material will yield 20 million times more energy than from a ton of coal.

The problem here has been that the tree huggers have successfully managed to convince an uneducated public to the so called dangers of nuclear power, so much so that France will be dismantling some 20 nulcear power stations that have been in operation some 40 years. If it was so dangerous, would there not be an area of wasteland in the centre of Europe called France?

[ians]

Did I hear someone mention another petrol price increase, 39c ?