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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Alan Whirlwind who wrote (14595)	6/29/2002 6:29:22 PM
From: The Vet	Read Replies (1) \| Respond to of 82344

Alan, even more curious is why the US doesn't buy gold to increase reserves? That would shore up the US dollar without affecting other currencies too much, and they could then explain away the rise in gold as being due to their buying, not inflation... I'm joking really, but it would work...

To: Alan Whirlwind who wrote (14595)	6/29/2002 10:05:01 PM
From: sea_urchin	Read Replies (1) \| Respond to of 82344

Al >why doesn't SA back its currency with gold? A strong currency is the last thing SA wants. Why? Because SA has to export to live in competition with other primary producing countries like Australia, Russia, Canada, even the US. So, if its currency is "expensive" then so are its products. In fact, a strong currency benefits only importers which, in SA, represent only a small fraction of the population, mainly whites. That doesn't please the SA government at all. More than anything, they want black employment and one of the main areas of black employment is in mining or agricultural production for export. That's why SA is committed to currency devaluation. That suits me, however, because I am happy to own rand hedge stocks eg gold, base metals, oil, overseas property and bonds etc and then they can devalue the currency 'till they are blue in the face. Also quite surprisingly, and notwithstanding the cheap currency, imported goods don't cost more in SA than elsewhere. Reason being exporters "tailor make" their prices to the particular market. So, Scotch whisky costs less in SA than in the US. A bottle of good Scotch eg J&B costs R70 here. That's $7 US. You won't get a bottle of J&B anywhere in the US for $7. Another thing is medication drugs. Someone I know from the US bought a year's supply of a particular drug for what one month's supply would have cost him in the US. BTW, the drug is made in the US. Work that one out.