BRICS Getting Real Very Fast As The Rand Gets Hammered
Living in South Africa we have no choice but to be stuck in the middle as the Government has chosen sides. The nails are being hammered into the coffin each week as things have progressed at a rapid pace. The unfortunate thing and why this is happening is the US has a weak government and countries have decided the time is now to make their moves.
Today the rand weakened against the US Dollar amid allegations that South Africa has been supplying arms to Russia. I wouldn't bet against this as they feel as though they we Russia for assisting them during the apartheid years and look at the West with hatred. They blame so much on the West yet the West has helped them out so much.
The Rand has dropped to it's lowest point ever reaching R19.26 to the Dollar. This is not good as yesterday was bad enough hovering around the R18.60 mark for most of the day.
The GBP is no better at R24 to 1 GBP and this is only the beginning of what could be a massacre. Thankfully I have foreign currency outside the borders.
Everyone thought the Rand was weakening due to the load shedding the country is experiencing as it has deteriorated continuously over the last few weeks. This morning we had 2 hours and now already on our second batch of 4 hour power cuts totaling 10 hours lost today. This looks like the set pattern for the coming months as winter is here and their is a high possibility the entire grid collapses. You have to love Africa as shit gets real very fast.
I do think there is more with the currency than load shedding as this is not anything new as there is more on top of the arms accusations which I believe are true.
China cancelled all corn imports from the US today and replaced this with South African corn. China accounts for roughly 1/3rd of all US corn exports (2021) so this is big news. Talk about causing a shit storm as now South Africa is firmly in it literally.
Will the US retaliate as I am sure they will by possibly imposing sanctions on South Africa just for the arms deals alone makes them a public enemy. I am sure we haven't heard the last of this and expect the Rand to tank over the coming weeks and months.
The supplying arms thing is what gets to most of us as this is not sitting on the fence and being impartial against Russia, but actually sticking both feet in their camp.
How this is going to impact the economy is a no brainer as already the SA economy is shot to pieces. Load shedding looks minor in comparison to what the government has been up to and they are gambling with high stakes here. Even if the accusations of supplying arms are not true we know the media and what they can do with the news as making South Africa into a scape goat will be child's play.
To give you an example of what the Rand has done since 2004 I bought a house and that house has increased in value by 250%. Sounds wonderful but selling today and converting back to the GBP spent I will lose a decent chunk of approximately 20% after the taxes and fees are applied.
This had to happen as the BRICS summit is not that far off being held here in South Africa from the 22nd-24th August..