Back the rand with gold

(“Who’s in charge?”, Business, May 11). There is one important difference: the snake oil apparently did no harm; Stiglitz’s proposal that South Africa debase the rand will.

The debasement of the rand will assist exporters at the expense of consumers, savers and pensioners as long as the debasement is greater and more rapid than that of the ­currencies of our major trading partners, especially the dollar, in a currency-destruction race to the bottom.
 
The dollar has already been massively debased and is set to unravel. South Africa cannot compete. The United States’s monetary base increased from about $800billion to about $2.6trillion, a 325% increase in a matter of three-and-a-half years.

During the same period South Africa’s monetary base rose from R119.6billion to R154billion, an increase of 28.8%, which is already causing relatively high inflation. More will be seriously harmful.

The US Federal Reserve is suppressing price increases by lending to banks at an artificially low 0.75% interest rate. According to shadowstats.com, the real US consumer price index now is 6% to 10% and not the reported 2.3%. 

South Africa should do exactly the opposite of what Stiglitz suggests and be the first country to have a 100% gold-backed currency and abolish exchange controls and legal tender laws (except for payments to the government) to allow traders, including exporters, to operate in any currency they choose, removing the clamour for rand debasement. – Eustace Davie

Keep the powerful accountable

Subscribe for R30/mth for the first three months. Cancel anytime.

Subscribers get access to all our best journalism, subscriber-only newsletters, events and a weekly cryptic crossword.

Related stories

WELCOME TO YOUR M&G

Already a subscriber? Sign in here

Advertising

Latest stories

ANC North West committee speaks out against ‘manipulative’ leadership headed...

From submitting parallel lists to misleading the court, list committee chair Lorna Maloney makes serious claims against the North West ANC’s interim provincial committee

July protests take their toll as economy shrinks by 1.5%

The largest drops in the third quarter were in the agriculture sector, trade and manufacturing.

Mabuyane warns ANC provincial executive against another ‘festival of chairs’...

The ANC chair in the Eastern Cape, Oscar Mabuyane, urges PEC members to accept election outcomes and not devolve into the violence of the “festival of chairs”

Going back to the future of KwaZulu-Natal politics

The past is helpful in understanding the predatory and violent nature of political factionalism in the province. But it doesn’t answer the question of how to fix it.
Advertising

press releases

Loading latest Press Releases…
×