Speculators are having a field day with the rand. Problem is, it affects everyone in the country big time. So soon we'll see a 10% increase in petrol, and with that an increase in inflation. I guess I need to buy some gold to counter this. If you can't beat them, join them.
Ja, but this is what everybody wanted - a weak rand, so that our miners and industry can make more money. But if you have been around in SA long enough, you will know that rand weakening is inflationary, despite what the economists say
I don't buy the money flows out of this country and that's why it's depreciating. We depriciated 11% against the Kenian Shelling in the last month for Pete's sake. A huge part of this is speculation. It's good for some part of the economy yes, I agree, but like you mentioned it's inflationary meaning the man in the street will feel the pinch directly in his pocket.
buy some gold? You should have done that ages ago. I do think given a few months the rand will recover. But its going to play hell with petrol and hence consumer prices in a few months. But lets not be sad. Who HASNT managed to make money these past few weeks with the rand doing what it has
Paul - Buy gold ages ago ? If you think countries balance sheets will be better in a few months (Italy, Greece, Portugal, Japan, US, UK) then yes don't buy gold. Many first world countries are drowning in a sea of debt, and as long as there is risk of default, there will be a flight to gold. Made a pretty penny out of gold shares in the last two years, and I intend to make some more in the next two or more (on the long side).
US $ became stronger (Rand got weaker) because everyone is looking (again) to the $ as the "standard". Taking into account inflation, the current gold price is more or less exactly where it was in the 1979's. A weak rand should mean higher inflation, at least in the short term, and a threat to the MPCA's inflation targets.