And The First To Admit Defeat In Currency Wars Is...

Tyler Durden's picture

Earlier today, the South African Rand (ZAR) weakened to an all-time low against the USD, falling for a fourth day in a row after a report earlier on Monday showed that South Africa’s trade deficit widened more than expected in October to the biggest shortfall in nine months.

The South African Reserve Bank then conveniently said the currency may depreciate further because the first interest rate increase by the Federal Reserve in almost a decade hasn’t fully been priced in by currency markets.

“The rand has been very sensitive to changing probabilities of the Fed hiking rates, suggesting that the first increase is not yet fully priced in,” the central bank said in a report released on Monday in the capital, Pretoria. “It is also unclear whether the rand will stabilize after liftoff, as attention shifts to the pace and timing of additional rate adjustments.”

It did just as suggested and the rand dropped as much as 0.6 percent to 14.4888 per dollar before paring losses to 14.4873 by 7:25 p.m. in Johannesburg. According to Bloomberg, that extended the rand’s decline this year to 20 percent, the most of 24 emerging-market currencies tracked by Bloomberg after the Colombian peso and Brazilian real.

Then, moments ago in the first official admission of defeat in the current currency war cycle - only one where the stakes are inverted as most countries do their best to push their currencies lower where in South Africa that is the default direction - South Africa announced there is little it can do to stem further losses.

S.AFRICA GOVERNOR KGANYAGO SAYS NO AMOUNT OF CENTRAL BANK INTERVENTION WOULD STEM MARKET-DRIVEN RAND MOVES.

As a result, expect the red arrow to move much higher and more to the right in the coming months.

 

Finally, for the CDS traders out there, it may be worth taking a quick look at South Africa's default risk which is now 42 basis points higher than for similarly rated Colombia, more expensive than Turkey’s and five basis points below that of Russia.

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Truther's picture

It's all fiat toilet paper at the end. Nothing will survive but gold. got some bitchezzzz?

SILVERGEDDON's picture

I prefer silver myself.

Problems with gold versus silver start with the unit cost ratio versus silver.
Almost all gold mined is still in existence.

Paper gold has not been as mercilessly manipulated as silver paper because of the influence of institutional and governmental gold asset holders.

Silver mining has dwindled to incidental recovery as a by product of copper, nickel, and lead mining - pure silver mines were played out for the most part over one hundred plus years ago.

Down turn of economy will not deter the most significant modern day usage of consumer electronics - the smart phone. Silver is the most efficient conductor of electricity on a unit cost basis.

Economic recovery of silver in consumer electronics is not feasible, even in China. Economic recovery of silver used in most other modern day applications of silver is not feasible either.

The ten percenters will never stop wanting new consumer electronics, and they survive down turns to the economy just fine it seems.

Add in the newer industrial uses of silver that also shrug off economic issues out of necessity - medical wound dressings, water purification filters, etc., and you have a continuing demand for a metal whose annual production has been falling for decades.

So, you have an indispensable metal being consumed by industrial use constantly, declining in mining production, and under supply pressure to serve both the industrial and monetary silver markets.

Take away the paper manipulation of 2 - 300 times the available physical silver available in the market, and there's a problem with price discovery for the real deal versus fantasy paper silver that never existed.

Lastly, the uncertainty of a major economic event always moves people to seek out safe haven for their hard earned money. Fiat currency has a history of failure for thousands of years, a near perfect track record of failure.

Silver and gold have a five thousand year history of recognized value in times of uncertainty, more so than any other commodity you can name that is portable, incorruptible, stable, and internationally recognized.

To summarize, with silver spot trading for substantially less than the cost of production, I see no down side to investing in it as a safe haven.

If the whole world burns, silver will be a recognized form of currency far easier to trade with than anything else short of 22 LR ammo.

I would rather dance with the silver devil than take on Wall Street, Goldman Sacks Biters, JP Morgan Chase, banks, politicians, the Fed, the CIA, NSA, DHS, IRS, and all of the other thieves on the loose out there.

coinhead's picture
coinhead (not verified) Truther Nov 30, 2015 1:33 PM

Currency wars... teh last man standing will be Satoshi and his devotees.  Deny it and keep thinking that crypto will go away any day now "lalalalalala...."

Herd Redirection Committee's picture

Some of the poor in South Africa (of every race) are actually starting to say that life was better under Apartheid!

But you can't put that in a newspaper in Europe or North America... No...

WtfBatman's picture

"starting to say"???

No, no, it has been a prevelant saying since the reign of Mbeki (yes that is 3 presedential terms ago i.e. approaching 15 years)

The fact that the long lost ninja turtle (albeit sadly the one with the most toxins in the brain) mighty Zumatello is accelerating the nation's decline at a pace never imagined surely isn't making the sentiment reverse of course.

SILVERGEDDON's picture

Coinhead crypto going away...........

Jaysus Aitch Cripes on a crutch, I wish it would.

Because you would evaporate from society like a fart in a wind storm.

But, it won't.

And, crypto currency will reel in some more muppets prior to imploding again as usual.

That is the part that pisses me off - quasi legal theft, just like the big boys on Wall Street, masquerading as an alternative to fiat.

It isn't - it is fiat, crypto style.

Fukushima Fricassee's picture
Fukushima Fricassee (not verified) Truther Nov 30, 2015 3:20 PM

Rodger that

KnuckleDragger-X's picture

You have pointed out a good point on the difference between gold and silver. I've bought a fair amount of silver, platinum, palladium and a few other metals because of their industrial value as well as their monetary value......

coinhead's picture
coinhead (not verified) SILVERGEDDON Nov 30, 2015 1:34 PM

No I do not think you prefer silver SILVERGEDDON.  We think you are a super-duper conspiracy orchestrated by teh Fed to make all stackers look backwards and dumb.

SILVERGEDDON's picture

The Fed woulda hired you long before they looked at me. Anyone who acts like they daily dose with Captagon prior to hiring is a natural for them boys to use as a shill until they need to destroy the evidence.

Chupacabra-322's picture

Gold builds Nations, Silver is a Gentlemen 's Currency.

LawsofPhysics's picture

If "the whole world burns", the unit of exchange will be the least of your concerns. After herd is culled, yes, back to PMs.

Agstacker's picture

I remember reading there is a monster box of silver in every tomahawk missile, not sure if it's true or not.  Good luck recovering that silver!  

 

Stack on :)

herkomilchen's picture

Gold makes way better money than silver.

The problem with silver is half of its demand is industrial, the other monetary.  Each of these distinct demand curves get mushed together and an equilibrium price is achieved that is not optimal for either of the two uses of the metal.

That means imbalance occurs in both the separate curves such that one use is always subsidizing the other.  For example, silver money may become artificially scarce if silver industrial use rises.  This distorts an entire economy using silver money just because of strong silver industrial needs that have nothing to do with what the cost of money should be.  Malinvestment ensues.  Not good.

Remember, silver's use as money comes from a time predating it having any industrial use.  Gold however still has only minor industrial use so escapes these problems rendering it the far better money at this time.

OldPhart's picture

As time goes on; of course the red arrow will move more to the right.

Butter_cup's picture
Butter_cup (not verified) nope-1004 Nov 30, 2015 4:30 PM

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hmn's picture

Buy the dip.  Centarl bank maneveurs only make asset prices go up.  That's it.  No "stimulating growth".  Growth comes from animal spirits and a "real" demand for goods and services.  Printing money does nothing expect cause stock prices to go up.  Buy the dip.  The Fed and ECB have your back.  Easy money.

Tejano's picture

BRICS under a lot of pressure.

Herd Redirection Committee's picture

Yep, a country with a lot of platinum, and gold reserves, but the existing mines are mined out, and its not very lucrative at the current depressed prices. 

There is a white-culture-only town, by the name of Orania, where Afrikaners do all the menial labour.  EVERYTHING.  Because they feel that was a mistake made in the past, to have others do that work for them!

http://www.biznews.com/undictated/2015/10/30/heres-andrew-kennys-orania-...

And the newspapers refuse to publish anything positive about this crime-free town!

GhostOfDiogenes's picture
GhostOfDiogenes (not verified) Nov 30, 2015 1:02 PM

Lmao look at the proles paradise of Venezuela.

At least that banana republic has bananas.

Does Greece grow bananas?

Omega_Man's picture

how do you get off the ride?

Truther's picture

First you have to ding along, then drop and hope for the best.

I Drink Your Milkshake's picture

Ignore the golden ring and grab onto the stanchion instead. ;>)

danepol's picture

better let it go than waste dollars resisting.

On another tack, someone explain why the USD is so popular? It is the ultimate printer of paper.

Truther's picture

GW's wig was one of a kind.

DontGive's picture

USD backed by a lot of guns, bombs, and crazy bloodthirsty fuckers running this shithole.

hound dog vigilante's picture

"...guns, bombs, and crazy bloodthirsty fuckers..."

 

Great for homeland defense, but diminishing returns in foreign policy.

The US must let go of this (neocon) notion that the US (military) should somehow perform the roles of conquerer/occupier/global peacekeeper. It's unrealistic and counter-productive. The US is going bankrupt, and failed foreign policy is a part of it.

Shrink US federal .gov & MIC, grow local/small enterprise, give the US domestic economy (incl. re-domesticated manufacturing) time/ability to retool & rebuild. 

Shrinking the fedgov also means shrinking/re-domesticating the US military & MIC.  Cost savings can also be found by re-organizing DHS/TSA/NSA, plenty of redundancy and overreach to be found there.

Let europe/Russia/ME clean up their own backyards. The US should be focused on competing in/with China/asia. 

One positive outcome after seven years of BO is the investment in US/north american energy production - cheap domestic energy has set the table for rejuvinated american/domestic enterprise if the US fed gov & DC politicians get out of the way...


Hohum's picture

If you owe debt denominated in dollars, you better have dollars.

kiwimail's picture

Because its backed by the full faith and credit of the us government!!!!!

oddjob's picture

This is Central Bank doublespeak.  A net exporter of Gold could have a very strong currency, but then the CB would be sinking their own boat.

WtfBatman's picture

^^^ this, exactly!

 

ZA has the ability to conjure reserves that will yield a hard currency in no time, BUT that would mean giving up the ability to conjure fiat at the whims of one of the most corrupt and entitlted "governments" in existance ... odds of THAT happening? ... zero

Soul Glow's picture

None of those fiat currencies have any value anyway.  

The paper is as good as an IOU.

Truther's picture

As good as toilet paper.

Bay of Pigs's picture

Gold in South African Rand up 17% the past year, 57% the last five years and up 377% the last ten.

http://www.kitco.com/gold_currency/index.html?currency=zar&timePeriod=10...

Soul Glow's picture

So what you're saying is the US-centric philosophy that gold has lost its purchasing power is false?!

You mean gold is expensive when priced in the rest of the fiat currencies?!

I'll be damned!

TheSecondLaw's picture

1oz Kruger Rand will cost you $1174 (R17 000) at this morning's price on SA Gold Exchange.  The weakening rand has been off-setting the fall in the dollar price of gold.

zz2ipper's picture

 

1. Despite ZA long bonds paying 8.5% the rats are running.  

2. The last white reserve bank governor was replaced Oct 2014. Here's the brains trust 

https://www.resbank.co.za/MonetaryPolicy/Monetary%20Policy%20Committee/P...

Anyone see a connection?

Niall Of The Nine Hostages's picture

South Africa under the ANC (aka the South African Communist Party) is considered a lower credit risk than Russia under Putin?  

By financial analysts on what planet exactly?

(Answer: the same planet on which Nelson Mandela was a saint and not an unrepentant terrorist, communist and anti-Semite.)

Moving on:

South Africa literally sits on a gold mine. The ZAR ought to be the soundest currency in Africa, if not the civilized world.

When South Africa was still a free country ruled by civilized people, it was. The exchange rate stayed at ZARUSD=1.40 from 1961 to 1982 and no lower than USDZAR=3 till de Klerk sold the country to the ANC, a decade of economic sabotage notwithstanding.

Only black Africans too stupid to have any business even handling money, never mind regulating its value, could have allowed the rand to slip anywhere near USDZAR=15.

GhostOfDiogenes's picture
GhostOfDiogenes (not verified) Niall Of The Nine Hostages Nov 30, 2015 2:28 PM

Mandela was an anti jew?

How?

He was a communist, and communism is run by juden.

He got out early and lived in a house funded by the public surrounded by jews.

Its funny. You can tell how big a scum bag is on planet earth, simply by asking what they think of scumbag jews.

Niall Of The Nine Hostages's picture

The ANC never forgave Israel for supporting free South Africa in its war against communism.

Mandela at least had the political wit to mince his words. Since his death his followers have minced their words less and less. I'll just leave you two more recent examples.

Johannesburg - The ANC’s National General Council recommended on Sunday that travel to Israel be discouraged unless it promotes solidarity with the Palestinian struggle.

Senior ANC leaders have criticised Members of Parliament and business figures for travelling to Israel recently, deeming it opportunistic given the fact that many struggle stalwarts see Israel’s apartheid state as worse than that experienced in South Africa.

“Apartheid in South Africa was a picnic compared to what we have seen in the occupied territories,” Parliamentary Speaker Baleka Mbete said following a visit to Palestine.

http://www.iol.co.za/news/politics/don-t-go-to-israel-anc-1.1928619#.Vly...

Then there was this statement from the "Alliance" of the ANC and its collaborationist organizations, including the Communist Party:

As the Alliance we are now heightening our campaign aimed at boycotting and isolating Israel as a state founded on the basis of apartheid, which according to international law and several UN conventions is a crime against humanity.

http://www.politicsweb.co.za/archive/boycott-of-israel-to-be-stepped-up-...

To be sure, the ANC had its sure of Jewish useful idiots, but if they're a branch office of the Elders of Zion, that appears to be news to the ANC.

zaphire999's picture

It boils down to simple math, 80% black > 10% white.

Personally, I checked out long ago.  The global markets are unstuble, fucking unstable.

 

Amen.

wcvarones's picture

That's not defeat -- that's victory in the Currency Wars.

tarabel's picture

 

 

This is serious. It sounds like they're running out of ink.

Niall Of The Nine Hostages's picture

Not yet, but it's coming.

The difference between ANC South Africa and ZANU "Zimbabwe" is 15 years, max.

August's picture

Cape Town looks like a pretty nice place to retire if you keep your savings in something other than the Rand, and never leave your walled compound after dusk.

sebmurray's picture

The Western Cape also isn't run by the ANC, so things actually work here

dearth vader's picture

>> the rand’s decline this year to 20 percent, <<
20%? The euro declined in little over a year from 1.39 to the dollar to 1.0574 today. That's almost 24% less!

CHX's picture

First??? LOL. Earlier this year the SNB was caught with their pants down, Soros and the BOE, etc. CBs can stem the tide only for so long and then the dam breaks. Same old...