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Is a strong Rand bad, or are we lazy thinkers

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SimonPB
Valued Contributor
Is a strong Rand bad, or are we lazy thinkers? http://ow.ly/39qdU
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27 REPLIES 27
Wizard
Super Contributor
There is nothing better than the Rand appreciating and we all smiles. But since SA is resource based economy and that's why at best we can hope for is stable currency.
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WR
Regular Contributor
it depends...why is china keeping its yuan pegged and artifically low, and everything we buy says made in china
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Wizard
Super Contributor
Financial engineering artificially boosting economic growth. They are no longer pegged though. Ideally every country should reach a level that the majority of GDP is coming from the financial services sector. The case with Switzerland. In that scenario the stronger the currency the better the economy.
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AJT
Super Contributor
Quote from Ross Perot, "A weak currency is the sign of a weak economy, and a weak economy leads to a weak nation"..
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SimonPB
Valued Contributor
are we a resource based economy ??? what % of GDP is mining ??
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SimonPB
Valued Contributor
you're kidding ?? you quoting Ross Perot ??? nnot with standing what he is saying is bunk ..
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striker
Super Contributor
.S.A. has the second highest real interest rates in the World ,behind Brazil. Brazil has a tax on short term cash inflows and a Govt. very supportive of business,supporting job retention and job growth. South African manufacturers are up against a strong Rand and no help from the Govt.,who in fact harm and hinder industry with unworkable labour laws and a host of other demands. Against those odds our economy cannot survive as evidenced by the spiraling unemployment rate. Our Govt. has been ineffective in addressing the problem and far from being pro-active ,has not even been reactive to the situation. We continue to slide down the ladder on just about every International measure of economic well being - and it can and will get worse if Govt. does'nt introduce some immediate measures.
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SimonPB
Valued Contributor
so all our problems are because of the Rand ???
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Wizard
Super Contributor
Yes Simon we are. RESI is the biggest contributor to the wealth of the country and that's why the government brags about the weak Rand. Switzerland on the other hand don't care if their Swiss chocks are selling overseas, it's just a tourist attraction. They got all the money in the world in their vaults and would love to increase the value of their CHF, to increase their purchasing power.
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striker
Super Contributor
.. that and much more. Name any meaningful Govt. policy that incentivises industial expansion and job growth.
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SimonPB
Valued Contributor
actually you are wrong .. of the 10 'sectors' that make up SA GDP, mining comes in at 7th !!
http://www.statssa.gov.za/publications/P0441/P04412ndQuarter2010.pdf
page 15
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SimonPB
Valued Contributor
so in other words a weak Rand wouldn't help ?? in which case I don't understand what you are saying about the strong currency .. or have we switched the debate to gov policy generally ??
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striker
Super Contributor
- sure a weaker Rand would help,but if Govt. are powerless to weaken the currency,then they must draft other measures,like Brazil ,to assist local industry. And sure it,s about Govt. policies- Govt's around the World always re act to protect local industr
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SimonPB
Valued Contributor
an largely I agree with that .. forget the currency, control what one can, gov polocies ..
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Wizard
Super Contributor
I think probably the right term to use is that we are more of a Net export based economy which applies that a weaker Rand brings higher revenue. The Swiss chocs are part of manufacturing after all.
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kwagga
Super Contributor
We need a stable currency more than anything else. Either a strong or a weak currency will benefit a sector in the economy somewhere and they will argue that it's good for the economy, to the disadvantage of another sector. The rand at the moment is overvalued, and this imbalance was created by the top parasitic nation in the world - our beloved US. Look at levels the Rand was on quite consistently before the financial crisis for a fair reflection of what the value of the Rand should be. Our wonderfully successful government will also use the strong currency to hide their own lack of policy to address many imbalances in our economy; the powerful labour unions killing the private sector with outrageous demands, over inflated salaries of a huge highly inefficient government, taxpayers sustaining the largest percentage of any country's population in the world with social grants, illegal immigrant flooding our cities and squatting illegally, no government support for the farming sector, government paying to turn productive farm land into waste land, government incentivising companies that sell shares to dead in the water empowerment companies for a beautiful parasitic relationship in true South African fasion. A highly skilled working force leaving the country in droves and I could go on and on.
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striker
Super Contributor
.. qiute right kwagga,our problems are deeprooted and numerous.Yet this govt. fails to identify the crisis and plunders on regardless.
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kwagga
Super Contributor
Irrespective of deep rooted problems, South Africa is no diffent that any other country on the African continent - NO DIFFERENT. It is a continent that suffers from a serious lack of long term committed and sustaiable planning. It suffers from a pandemic of short term quick gain as a reactive solution to long term problems. I have no hope for this continent to be anywhere in a 100 years. They are at the mercy of powerful countries what understand their simple desires and will exploit and exploit until nothing is left.
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CHATTYCHAT
Super Contributor
Raymond Ackermann says "keep your hands out of your own till and keep thinking long term - always be cash flush." Our economy is not cash flush, the strong Rand is because of the weak dollar, that's why a plea is made to move (back) to the gold standard.
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