Scenario: Is the collapse of the Rand starting in 2008 due to Jacob Zuma?

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http://www.africancrisis.co.za/Article.php?ID=21257&

Folks, I've mentioned before that I think Zuma is going to bring the Rand down. There have been enough hints of this.

I first raised the issue in October 2006: S.Africa: Khaya FM - Could the Rand Collapse under Jacob Zuma?

Then in November 2007, we looked at a possible graph showing Zuma's effects on the Rand: [Graph] SA: Does Jacob Zuma make the Rand fall?

Today I saw someone from Rand Merchant Bank (which owns First National Bank), interviewed on SABC. The woman said that they seriously think Zuma's presence will cause the Rand weakness and that foreign investors who distrust him will pull their money out of the country and invest it in another emerging market. (In Investor terms, Zuma brings more RISK into the equation due to his Marxist policies and the talk of Nationalisation, etc).

So she predicted that the Rand, which is currently at 6.92 to the US Dollar could fall to 7.70. She said it could fall as far as 9.0 to the US Dollar!!! The SABC interviewer was quite shocked by that. In the discussion, the mention of Zuma as PRESIDENT OF THE COUNTRY was regarded as NOT A FIRM POSSIBILITY - due to the trial, etc. The gist of the discussion between the RMB economist and the black interviewer sort of hinted at Zuma's presence as the sure fire PRESIDENT OF SOUTH AFRICA, could be a negative.

Perhaps, I'm speculating now, if Zuma gets off the hook in the trial, it will send the Rand down to the R9.0 to the US Dollar???

Either way... foreign investors are "all shook up" (to quote Elvis!!!) over the instability in the ANC. (Clearly DEMOCRACY isn't a high consideration for investors - they prefer STABILITY in any form they can get it!).

So, perhaps it is a good idea for those of you who can, to find ways of getting money out of the country or into other currencies even if you keep it at home.

Another possibility always folks is BUY KRUGER RANDS. KrugerRands in South Africa are dependent on TWO factors: The US Dollar Gold Price AND the Rand/Dollar exchange rate. The US Dollar Gold price is expected to rise more in years to come (see that scenario in The Prediction Experiment). Couple that with a FALLING RAND over the next few years... and KrugerRands might rise a LOT!!

In August 2007, I checked and the KR price was: R4850 for one KrugerRand.
Today it is listed as: R6000 each. That is a rise of: R1150 in 4 months, or: 23.7% increase in only 4 months!!!

You can very roughly calculate what a KrugerRand's price should be. If you take the current Gold price is about $860 and the current Rand/Dollar price is: 6.92, then multiple them & you get: R5951, which is R49 short of the R6000 price.

So, suppose, for argument's sake, the Gold price reaches $900 per ounce and the rand falls to R9 to the US Dollar, then KrugerRands in South Africa will be worth: R8,100 each. That, I think is not an unrealistic possibility if you were to buy and hold KrugerRands for about 2 years.

If the Rand falls even more, or the Gold price rises more (both of which are real possibilities), you could make even more.

I think, I should have a section where we deal with KrugerRand prices.

In survival scenarios, it is a good idea to buy SMALLER DENOMINATION KrugerRands which you can actually use as MONEY! There are 1/4 and 1/10th Ounce Kruger Rands available. The 1/10th Ounces are about the size of a 20c piece - but are worth R550 currently!

In terms of FINANCIAL SURVIVAL, I think the KrugerRands, which are 99.9% pure Gold are PERFECT for South Africa. They're well-recognised, mobile, etc. If you had to flee you could literally put R100,000 in Gold in your trouser pockets and make a run with it. Easy! And it would be worth more than our currency.

I think we need to discuss KrugerRands and watch them in the coming years.

The best place to buy or sell them is the SA Gold Coin Exchange. But there are other companies too. I also spoke to ABSA some time back and ABSA Customers can open brokerage accounts with ABSA where they will get good deals.

We need to monitor our falling currency.

Back in 2000, the Rand was falling badly, (before the Globalists probably stabilised it). It was down to over R13 to a US Dollar. I think a Zuma presidency will take us there and much worse. We will discuss the Rand and analyse it.

But don't be surprised to wake up in 10 or 15 years and find a 20 or 30 Rand to a US Dollar. No matter how much the US Dollar is sucking now, and will continue to suck... it is still going to be much better than the rand. If you can get: Euros - or Swiss Francs or Australian Dollars - get them. The Canadian dollar is good too.

Other options folks, are to go to Mutual Funds, like Stanlib, and investigate Mutual Funds which invest your money in Euros or US Dollars.

If folks are interested in exchanging investment ideas and monitoring them, we can do that. I'm no expert, but I've also lost a good amount of money, and on occasions made a bit too - so I have been burned and I'm happy to exchange practical experiences and thoughts. It is a risky game. Nothing is certain. But, if we put our heads together, we maybe we can give people some advice.

One NOTE: When investing in anything, take a look at its price every few months. Markets are not exactly stable. Look at your investments at least every 3 months and just assess things a bit.

BUT INSTABILITY CAN BE GOOD FOR PEOPLE WITH THEIR HEADS SCREWED ON PROPERLY!!!

With some savvy, and calm nerves, this can be a time to also get ahead of the pack. So lets put our heads together and we look at ESTABLISHED, PROFESSIONALLY RUN investments and see if any of them can be of use to us.

An area of great interest for me has always been Mutual Funds. I have experimented with them over various years, and for me, it has always been the only thing that ever made me a profit.

A fabulous source of Mutual Fund information in South Africa is http://www.Equinox.co.za

They have an incredible spreadsheet, which I've studied from time to time, and again, if people are interested, we could look through it. It lists over 300 mutual funds in South Africa and their performance. It is updated monthly.