Thursday, December 20, 2007
EINA! Rand at $6.99, Oil at $91
This combination is going to hurt South African consumers. It's not as big a setback if the oil price goes high and the Rand is at, say, R6.60 or R6.70, but the Rand has come all the way back, and now the full impact of those oil prices is going to sting.
The JSE is hovering around 28 400, licking its wounds after plenty of blood letting. The media are underplaying this of course, saying that the political background is not relevant (of course it is) and obvious there's also not a collective wince about oil (which effects food prices, and is the source of inflationary pressures).
Whether or not you go on holiday this December, the odds are next year this time your options will be even fewer. That's a pretty austere scenario, I know, but unfortunately, one I believe to be probable.