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barry_1
Super Contributor
Last time i suggested it would be a good idea for Tito to lower the bank rate in Dec,some forumites thought it wa s a good idea NOT to as that would help lower inflation....How ever i might point out that the figures used to determine inflation at this juncture are out of date and have been so for almost a year.Inflation when measured on the new figures is found to be at least 2.5% lower.These figures will only be used in January,as pointed out by Investec many months ago!....Such a move would help our struggeling economy no end as all other countries have lowered theirs ,where there is is a possbillity of inflation higher than ours.....Inflation is falling and there can be no purpose in keeping interest rates the same....Banks and listed property would do better if they start to do that now....It must be remembered that the oil price has fallen by two thirds so that will also bring relief to us eventually.
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15 REPLIES 15
louisg
Super Contributor
Hi Barry. I agree that Tito should cut rates next month. I don't think by the 200 basis points you mentioned in your previous posting, but perhaps by 50. Who knows, maybe the foreign capital will come back into the market and help strengthen the ailing rand? I'm sure once investors have calmed down they will look for growth again. A reduction in rates should provide the catalyst for growth going forward.
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Brazen
Super Contributor
Absolutely right Barry, if anything, worldwide deflation is more of an issue now than inflation.
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barry_1
Super Contributor
Yes ,im glad you agree....The 200 point was really in frustration,more than anything else!
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louisg
Super Contributor
Perhaps Tito will be in a festive mood and make you half right with a 100 basis point cut. Here's hoping.
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Shaun_Siddall
Super Contributor
There is huge pressure for a rate cut. Look at Aus cut rates and aus dollar actually got stronger. Currency in the current volitility should not be an issue as global rate cuts or the norm. 100pts December and 300-400 over the next 12 months. This time next year prime @ 10.50%-12%.
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_nova
Super Contributor
Rate cut = USDZAR15.00
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Not applicable
OK, I'll take two of them rate cuts. To whom can I pay my 30 USD/ZAR?
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My view for a very long time is that cutting rates lowers the currency in the short term but increases its value in the long term. Why? Because the exchange rate is the share price of the country! The higher the GDP and the higher the profits in the country and the easier it is to do business the better for the economy. Foreign long term investors aren't stupid. They see local people investing more in their businesses with less expensive capital and they come flooding in. Just like at Australia. Also just like its been in the USA, Europe and the other strong currency economies for decades.
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_nova
Super Contributor
only one little problem Huaron... our deficit. A weaker ZAR makes our debt servicing a lot more expensive and the gov want's to go borrow foreign capital for infrastructure development? Go figure.
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We have a R200 billion current account deficit as well. If only we could get the 50% unemployed people working. For example digging holes if necessary instead of importing and using expensive machinery. Most of us started out at or near the bottom. I just read about the richest person in Taiwan who started out as a Tea Leaf Packer. If people in this country could see that by working hard one can start earning as well we will be in take off mode. I saw a film recently about Jewish people who immigrated to New York in the 1890's and 1900's who worked 10 hours a day in sweat shops in textile factories. Look where their grandchildren are today. Same story with the Jews in the East End of London. Others have taken their place. "East Enders" Da Da Da Da Da Da Dum, Da Da Da Da Da Da Da Da Da Daaa, is as it always has been. The melting pot where immigrants arrive and make their way into society. Our "immigrants" in South Africa are mostly formerly disadvantaged people who desperately need education. In order to do that they need to work hard to pay for their children's education. In order to do this we need to compete with China which we can do as long as their is freedom of labour movement and as long as companies enforce training programs so that their tea lady's and sweepers have every chance of becoming directors as their accountants. If we take the bull by the horns and stop waiting for government, we can change the world, starting with South Africa, a glorious country at the foot of the richest continent.
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Not applicable
A stirring speech indeed - I see what you mean about being an unbridled optimist - you get today's Golden Bull award!
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DST
Super Contributor
Some of the infrastructure we need.
3bn+ for a soccer pitch for a dozen matches on the green point common. ?

Plenty bn for a gauge-incompatible highspeed train from Braamfontein to the airport - it will have to be braking before it has left the station, but I suppose the feeder systems might help the local economy. ?

War toys to save us from Robert G's migs, and to keep the pirates up at the horn - we wouldn't want them swooping out of the heads at Knysna as they pillage the tankers too large for Suez, would we. ?

Maybe our mandarins could use some realworld finance charges.
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_nova
Super Contributor
If only we could get the 50% unemployed people working. ... now there's the rub nuh? I am regularly astounded at the unbridled laziness of the majority of South Africans... and don't get me wrong here... South Africans are very willing to do dogshaait hard manual labour. But that's all they're prepared to do. Carrying 200 pound bags of this or that for 8 hours a day + lunch break + tea breaks is easy in comparison with working 12 hours a day at some shaait admin job and then spending another 3 to 4 hours studying for some degree or another. I've done both and the latter is by far the real back breaker that demands far more sacrifice. Thing is we all have a choice to be smarter, more competitive. It's up to us and I'm sorry to say that South Africans are happy to be manual labourers who remain dogshaait ignorant and believe in lesser gods like jeremy *****in up his nostril cronin. Sorry, I just had to say this. No offense to you HiSo
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YNWA
Super Contributor
...prefer mine freshly squeezed ++ a large shot of José
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YNWA
Super Contributor
...tell it the way it is amigo!
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