Page 1 of 2 12 LastLast
Results 1 to 10 of 15

Thread: A spectacular adjustment in value on the horison?

Hybrid View

Previous Post Previous Post   Next Post Next Post
  1. #1
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    22,648
    Thanks
    3,304
    Thanked 2,676 Times in 2,257 Posts
    Blog Entries
    12

    A spectacular adjustment in value on the horison?

    A not so idle thought that occurred to me today as oil prices sink below $30 a barrel.

    It was oil price inflation that introduced inflation to the world in the late 1960's / early1970's after the recessionary post WWII global economy.

    What are the chances that in the current environment of spectacular oil (and other commodity) price collapses (the exact opposite of those inflationary times) that we'll see a significant reversal of value in currency terms across the board too?

  2. #2
    Diamond Member Justloadit's Avatar
    Join Date
    Nov 2010
    Location
    Johannesburg
    Posts
    3,480
    Thanks
    134
    Thanked 695 Times in 593 Posts
    Blog Entries
    1
    Interesting thought. I always stated that the cost of crude oil was far too high, and was caused by greedy producers, which systematically made consumers poorer with time.
    What has been spawned is a new way of energy production, along with more efficient use of crude oil.
    Oil producers now want to quell this new energy by dropping the price of crude oil.
    I am afraid that far too much finance has been spent on alternative energy, and a new movement has been created, correctly or not by the "Global Warming phenomena"
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar pumping, Solar Geyser & Solar Security lighting solutions - www.microsolve.co.za

  3. #3
    Bronze Member msmoorad's Avatar
    Join Date
    Jan 2009
    Location
    durban, SA
    Posts
    179
    Thanks
    34
    Thanked 29 Times in 26 Posts
    Quote Originally Posted by Justloadit View Post
    Interesting thought. I always stated that the cost of crude oil was far too high, and was caused by greedy producers, which systematically made consumers poorer with time.
    What has been spawned is a new way of energy production, along with more efficient use of crude oil.
    Oil producers now want to quell this new energy by dropping the price of crude oil.
    I am afraid that far too much finance has been spent on alternative energy, and a new movement has been created, correctly or not by the "Global Warming phenomena"
    from what i learnt, the increase in the price of most commodities is due to futures speculation on the stock exchanges.
    the producers of these commodities obviously just sat back & enjoyed the extra cash that the increase in prices brought.

    http://money.howstuffworks.com/oil-s...-gas-price.htm
    A “conspiracy theory” no longer means an event explained by a conspiracy. Instead, it now means any explanation, or even a fact, that is out of step with the government’s explanation and that of its media pimps.

  4. #4
    Silver Member bones's Avatar
    Join Date
    Aug 2014
    Location
    Pretoria
    Posts
    223
    Thanks
    73
    Thanked 6 Times in 6 Posts
    what i dont get is the pound
    This is what the UK exports

    Machine tools (we have that)
    Electric power equipment (to an extend we have that)
    Automation equipment (to an extend we have that)
    Railroad equipment
    Ships
    Aircraft
    Motor vehicles and parts (we have that)
    Electronics and communications equipment (we have that)
    Metals (we have that)
    Chemicals (we have that)
    Coal (we have that)
    Petroleum (we have that)
    Paper and paper products (we have that)
    Processed food (we have that)
    Textiles (we have that)

    Today's exchange rate
    Rand to UK Pound Conversion
    £1 = R21.77

    how the #### is that even possible?

  5. #5
    Full Member polpak's Avatar
    Join Date
    Jun 2013
    Location
    Australia
    Posts
    33
    Thanks
    16
    Thanked 6 Times in 5 Posts
    Viewing Rand conversion charts http://www.rainbownation.com/business/randvspound.asp

    Images on the 5 year charts clearer, with some large variations compared them to the USD conversion, the Euro linked rates clearly being played.


    While Oil&Gas not likely to run out soon, upwards changes in pricing likely later this year, early next year, as Saudi's forces many of smaller Frac suppliers out of business.
    In USA the bankruptcy chapter 11 or otherwise of many is likely, wider concern is impact on US banks which financed many smaller Frac company loans, many of which seem unrecoverable.

    US Federal Reserve concern, US bank losses may stall US recovery...


    Impact from O&G prices forced down share prices for most Australia's O&G producers, while the major suppliers can keep themselves going selling bellow cost for a while.

    To date appears less concern with Australian banks over loans possibly because most are producing,

    Australian Reserve Bank has been forcing banks set aside more capital, with goal to reduce claims on government for support if things go really bad.


    South Africa still seen as gateway to African investments, can it be made more attractive to investors, eg through ZA stock market, or soon markets.

    Challenge for ZA government is make it clearer, easier and looking safer, to attract more outside investors to invest, particularly the diaspora who left and need encouraged to invest back in South Africa.




    South Africa concentrate more on alternate energy generation and related devices, to be organized before O&G pricing recovery really starts to hurt, so can supply energy without need for O&G.

    Areas needing long wire distribution networks may benefit more, though long wire distribution networks remain economical, particularly where used distribute power from larger alternate energy generators to where consumers needing it.

    For metropolitan areas electric cars, buses, trucks would be useful, whether manufactured, assembled or distributed.


    Encourage the diaspora to join this forum ;-)

    ,
    Last edited by polpak; 13-Feb-16 at 01:12 AM. Reason: last line added, thought lost all when needed login again...

  6. #6
    Email problem workshop's Avatar
    Join Date
    Mar 2013
    Location
    Knysna
    Posts
    220
    Thanks
    9
    Thanked 13 Times in 10 Posts
    Quote Originally Posted by polpak View Post
    Challenge for ZA government is make it clearer, easier and looking safer, to attract more outside investors to invest, particularly the diaspora who left and need encouraged to invest back in South Africa.
    That should read Challenge the ZA government to make it..... or even better Change the ZA government to make it..... . But that is not going to happen is it? And the diaspora would be well advised to hang in there and stay where they are.

  7. #7
    Diamond Member Justloadit's Avatar
    Join Date
    Nov 2010
    Location
    Johannesburg
    Posts
    3,480
    Thanks
    134
    Thanked 695 Times in 593 Posts
    Blog Entries
    1
    It's not what the UK exports, it's that the majority of the big corporation headquarters are located in London, and are listed on the London stock exchange, so all profits the companies make are routed to London.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar pumping, Solar Geyser & Solar Security lighting solutions - www.microsolve.co.za

  8. #8
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    22,648
    Thanks
    3,304
    Thanked 2,676 Times in 2,257 Posts
    Blog Entries
    12

    So how far did we fall in 1 year?

    So today I get an increase letter from a supplier. Not that they're actually giving their price increases just yet, just saying they're in the process of calculating them, and pointing out that -
    The Rand has lost 43% against the US Dollar since January 2015!

    So I thought "I know it was a rough year, but surely it wasn't that bad".

    So I checked, and guess what -

    Click image for larger version. 

Name:	1yr-rand-dollar-rate.JPG 
Views:	204 
Size:	44.8 KB 
ID:	6134

    It was that bad!
    (Or if you're an exporter selling in USD, that good!)

    Quite a kick in the tail there too, I see. Not really looking good for the slide slowing down on current form.

  9. #9
    Full Member Electrode's Avatar
    Join Date
    Dec 2015
    Location
    middelburg mpumalanga
    Posts
    91
    Thanks
    21
    Thanked 14 Times in 11 Posts
    I do not say this lightly but the reality is that South Africa is losing a fortune for 2 major reasons. The 1st most prominent is our inability to produce enough electricity. No industrial enterprise is willing to invest in a country that cannot guarantee a sustainable reliable power supply.

    Secondly is the fact that we lose our ore minerals to global consumers. A refined product or even a finished product will fetch a better price then a unrefined minerals does. To this I simply must add that nationalization of our mines can help our current situation keeping wealth locally rather than exporting both our minerals and our net profits.

    Unfortunately due to corruption and other contributing elements we cannot risk mine nationalisation. Until we have absolute certainty that we can trust the responsible entity this can be a disaster in the making.
    DISCLAIMER - The above does not constitute to legal advice or formal advice in any manner or form

  10. #10
    Diamond Member AndyD's Avatar
    Join Date
    Jan 2010
    Location
    Cape Town
    Posts
    4,923
    Thanks
    576
    Thanked 934 Times in 755 Posts
    Quote Originally Posted by Electrode View Post
    ......To this I simply must add that nationalization of our mines can help our current situation keeping wealth locally rather than exporting both our minerals and our net profits........
    I wasn't sure if this was tongue in cheek but I'll take it at face value. Mining is not an easy game even for the professionals and especially not so in this economic climate. What makes you think any part of the mining sector would run better if it was government owned? I'd point to the state of the national airline as a very good reason to keep the mines out of the control of government and it's cronies. Secondly it would only be worth keeping the raw resources if we actually had a strong manufacturing sector that could turn them into something profitable but alas we don't.
    _______________________________________________

    _______________________________________________

  11. Thank given for this post:

    Dave A (21-Jan-16), flaker (21-Jan-16), roryf (21-Jan-16)

Page 1 of 2 12 LastLast

Similar Threads

  1. [Question] Vat declared sales adjustment
    By crobbertse123@gmail.com in forum Tax Forum
    Replies: 3
    Last Post: 14-Jan-15, 01:01 PM
  2. CASHBOOK ADJUSTMENT
    By Tat in forum Accounting Forum
    Replies: 5
    Last Post: 10-Apr-14, 09:30 AM
  3. [Question] Salary Adjustment
    By Pritesh in forum Labour Relations and Legislation Forum
    Replies: 4
    Last Post: 16-Mar-13, 03:51 AM
  4. Replies: 7
    Last Post: 21-Feb-11, 09:45 AM
  5. Watch the skies for 'spectacular' comet
    By Dave A in forum General Chat Forum
    Replies: 8
    Last Post: 25-Jan-07, 10:18 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •