Sound Money » Human Action

QE2 and its implications for the Rand

Quantitative easing is set to become debt monetisation in 2010. Let’s call this QE2. We still expect the Rand to ratchet higher against major currencies like USD, GBP, EUR, and JPY. The market is likely to see EM currencies in a new light once the champagne bottle cracks on the QE2’s prow. read more…

Wake up to the wealth confiscation

We have been hammering the point that monetary inflation – i.e. an undue expansion of broad money supply in the economy – redistributes wealth and destroys capital in any economy – no matter what. An article from Seeking Alpha backs this argument up perfectly. read more…

Gold bears: Youve been Punk'd

You’ve got to love how big money can manipulate the market to create favourable entry and exit points for themselves, in the process confusing nearly the entire market. read more…

RMB currency analysts are incoherent

This is one example of the problem with bank economists. RMB’s FICC Research team published this Rand report in February 2010 clearly contradicting themselves on numerous issues. These guys really should proof read their reports before publishing and sending to clients. read more…

SARB nationalisation debate is irrelevant

Whether the SARB is owned publicly or privately is irrelevant. What is more relevant is the fact that it is a one-firm industry. A Herfindahl-Hirschmann index of 1, a one-firm concentration ratio of 100% makes it a prime candidate for investigation by the Competition Commission – doesn’t it? read more…

How it works: The Dollar-Yuan peg

Struggling to get your head around the People’s Bank of China’s policy of pegging the value of their currency, the renminbi, against the US dollar? Take ten minutes to review the following video clip and text. read more…

Wimpyflation

What Wimpy burger prices tell us about the deadly virus that is persistent price inflation and why gold is the best money. read more…

ECB working paper: Weak states can be cut loose

Perhaps the founding fathers of the euro anticipated the possibility of present conditions and wanted to avoid being in the same position as the US government which will have to bail out all of its bankrupt states – something that could require infinite printing of the US dollar. While the US government is bailing out its states, the EU and ECB can cut the weak states loose. read more…

SARB betting on a strong rand in 2010?

Soft forex purchases in December point to a bullish strategic rand view. read more…

Zim government is at it again

Old habits really do die hard – The Zim government recently announced plans to clamp down on the free market by reintroducing the repo rate, which implies it plans on issuing a new currency with which to buy its own debt. read more…

SARB balance sheet, Rand, and Gold

The rise in government debt through government borrowing over the past decade has facilitated a larger SARB balance sheet, which has led to a rise in broad Rand supply in the economy and the rest of the world. This higher broad Rand supply is reflected in the Rand gold price, but less so in the USDZAR, as both paper currencies are weak. read more…

Abstraction and destruction: The fate of paper money

The end of bank cheques in SA: step by step we’re heading toward a completely abstract concept of money consisting of computer entries and credit and debit cards. Experimentation with paper money has failed every single time it’s been tested throughout history, without fail having disastrous consequences for society. We also include a clip of how one Zimbabwean community is making payments in day-to-day grocery read more…