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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Horgad who wrote (143570)1/14/2002 1:11:30 PM
From: GraceZ  Read Replies (2) of 436258
 
Thinking about this currency sh*t gives me a headache

I share your pain. When you look at them fundamentally the Rand/Dollar relationship has been helping them to get a lot of bad stuff off the balance sheet. For the most part they are selling their gold in dollars (except for that Rand denominated forward sale Drooy delivered on recently) and paying expenses in Rand. So a strong dollar to rand ratio helps them even while the POG is held down by the strong dollar. If the dollar goes down relative to the world's currencies (its a given) the POG will rise. The dollar falling doesn't necessarily mean the rand will rise by much, what would be the fundamental reason? A rise in the POG will have a bigger impact on the producers than this rand/dollar arb. So it appears that if the dollar falls SA producers gain and if the dollar rises there is still a benefit.

It appears that this is a heads I win, tails I win and this is what makes it highly suspect! Nothing in the investment world ever works out this way.
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