By Alec Hogg
On this day 62 years ago, Apartheid South Africa celebrated the country’s independence from Britain. Its supporters predicted a bright future built on the belief that the suppression at Sharpeville proved Might is Right. Their argument didn’t age well.
Since the 1970s, it’s been downhill. First, SA was throttled by the economic destruction of Apartheid. Then an ANC-imposed corrosion of social engineering founded on socialist dogma that gave us an incompetent and corrupt State. Modern South Africa now lurches from one self-engineered crisis to the next.
All of which is illustrated by the ever fragile South African Rand, our national “share price”, which yesterday dropped to a fresh all-time low against the US Dollar. A new trough surpassing Nenegate and the Covid Panic. This time it’s blamed on loadshedding; arms-to-Russia; and offering diplomatic immunity to Vladimir Putin.
A technical analyst’s assessment of Rand’s trendline (above) projects a peak of R22 to the US Dollar over the next few weeks, before a slow recovery to somewhere between R16 and R18. As the trend shows a forex crisis arrives every four years, another even more severe blowout to an even weaker level is likely in 2027.
Technical analysts look purely at data when making their forecasts. They tell us reversing long-term trends like Rand weakness requires something dramatic. South Africa has a potentially watershed election a mere year hence. Roll on 2024.
Sterkte
Alec
Here’s the link to yesterday’s portfolio webinar: https://youtu.be/hhzrCzCLXus
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