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I was speaking to the Fender distributor in SA, he used the word "mortifying".

Explain it to me because I don't understand.
The Rand survived reasonably well against foreign currencies for the last 19 years.
It survived 9/11 reasonably well.
It survived the first few years of the current recession.
But now it's collapsed, it's in free fall...

Why, what's so different in the last few months from the time period since 1994?

No problem, I'm carrying on FULL STEAM AHEAD in the import/distribution business because I'm passionate about it, but I'll have to do it without making any profit. ?
    Interest rates were dropped all over the world with the "toxic assets" crisis.
    South Africa hadn't dipped its toe into that toxic pool and was relatively unaffected. Our interest rates stayed high.
    This led to investment in South Africa which created demand for the rand.
    This trend has now changed.

    In order for the rand to stay strong there has to be a reason for foreigners to invest here and effectively buy our rands.
    And they need to be able to do it safely in the knowledge they can't lose their investment.

    So ... politics haven't helped either.
      Around 2001 the Rand was almost R20 to the GBP....

      The current weakening is as a result of inter alia the widespread labour unrest, especially in the mining industries. Many investors are withdrawing big chunks of money which results in weakening of the Rand. There are political reasons as well.

      On the other hand the JSE is doing very very well at the moment.

        It's just a cycle. 2008 is repeating, that's all. Eventually 2011 will repeat too, R7/$ we were all celebrating here: http://www.guitarforum.co.za/off-topic-lounge/the-rand/

        I feel your distress as an importer. We're a small currency easy to push around. Add political ups and downs and it's a tough business. No predictability.
          Chocklit_Thunda wrote: Is currency rate linked to Gold?
          Why - Are you thinking of selling your teeth?? ?
            Investor confidence...that's about it...nothing more....

            If there is demand for local currency you good, if not u suffer

            Our use,ess politicians are the driving force here....unions too
              Many factors as the ones stated above affect the rand.

              A big one not mentioned here is the USA quantitative easing policy.
              Ben Bernanke just hints of a slow down in the buying back of USA bonds and money flies out of emerging markets.

              Just look at what has happened to the Indian Rupee of late.
                Don't forget the conspiracy theories around people intentionally weakening a country's currency for their own nefarious reasons... hehe...

                But yeah... it's a right pain in the aaa... wallet...
                  warrenpridgeon wrote: Don't forget the conspiracy theories around people intentionally weakening a country's currency for their own nefarious reasons... hehe...
                  This is not a conspiracy theory. Banks make good money speculating on emerging currencies, and eg. Japan is well known to intentionally weaken it's currency to help exports

                    This is not a conspiracy theory. Banks make good money speculating on emerging currencies
                    [/quote]

                    It is extremely expensive for banks to take propitiatory positions. Banks make money by making a market.

                    I think your'e talking about funds and the like.
                      What is so sad is that most of us cannot afford a USA guitar but end up playing a Chaiwanese copy instead :'(
                        DaFiz wrote: What is so sad is that most of us cannot afford a USA guitar but end up playing a Chaiwanese copy instead :'(
                        I'm happy with my Korean one... hehehe...
                        But yeah... things that were crazy expensive have now become prohibitively expensive...
                          ................and on the plus side.

                          My little export business has been booming. Picked up a new buyer this morning from KaliiiiiforniA.



                            It's been covered pretty well, but as someone who works in this on a day to day basis, the key points are:
                            - Low growth next to comparable economies
                            - This is mostly due to lack of the right govt policies, wealth redistribution not moving quickly enough, and thus resulting labour issues country wide
                            - Inflation pressures and unemployment will keep consumer spend low, further constraining growth
                            - The dip in commodities, our major export, makes what we do export contribute less to GDP, and gives less reason for investment in new mines to drive more growth
                            - "Risk-off" mode by global investors as the cost of liquidity increases due to Bernake's intentions to slow Quantitive Easing over the next few months
                              There is only one answer to the gini coefficient being so high (the highest in the world at 0.7): education. Wealth distribution not moving quickly enough can also be solved by forced redistribution but that model has failed to spark international investment in countries North of us, who tried...
                                In terms of all the crazy strikes we've been having the irony is that it's not really about money - it's about basic living conditions being poor. Unfortunately the masses think that this will be solved by earning a bit more - this will not stop an inept municipality being inept.
                                Political discussion so I will end here. (Forum Rules)

                                My 2c.
                                  Gearhead wrote: There is only one answer to the gini coefficient being so high (the highest in the world at 0.7): education. Wealth distribution not moving quickly enough can also be solved by forced redistribution but that model has failed to spark international investment in countries North of us, who tried...
                                  not sure education will improve anything ..... there are countries north of us with higher levels of education and higher levels of poverty...... I have travelled Africa quite extensively ....its an eye opener....