Premium: The “law of seven” is due in 2022 – so watch out, Rand bulls

Am indebted, once again, to Kevin Lings for today's idea. Among the weekly raft of graphs shared by Stanlib's chief economist is a bar chart of the Rand's annual performance against the US Dollar since 1960 – during which it weakened roughly two thirds of the time..Lings put each year's performance into a 5% block. The graph above shows the zero to 5% depreciation category was most popular, occurring 15 times, or almost half of those years when the Rand lost ground to the Greenback..___STEADY_PAYWALL___.The "over 25% fall" category – i.e. years when the Rand Crashed – raises a flag for us today. This last occurred in 2015, which is seven years ago. That came seven years after the previous crash, in 2008. And, you guessed it, the crash before that was in 2001 – after another seven year interval..Cycle followers will caution that this law of "seven" telegraphs another Rand crash in 2022. Something that would not be out of turn, anyway, after the Rand's comparatively low volatility during the past three years – minus 5% to 10% last year; 0 to minus 5% in 2020; and 0 to plus 5% in 2019..When a currency's long-term record is two years of depreciation to every winning 12 months, there's really no bad time to diversify offshore. Especially in the wake of a significant correction on Wall Street..More for you to read today:.RW Johnson: After Zondo – On Ramaphosa and reform. SA's top political commentator on problems with the call for a new start in SA.Marius Strydom on the key drivers behind the JSE delisting trend – vicious circle of falling foreign interest and a fall in analyst coverage of SA businesses.Herd Immunity Is Over — Long Live Superimmunity. The Omicron wave will leave most people with potent and durable protection against Covid..* PS Don't forget to join us either online or in person for Thursday's BizNews Share portfolio update at 6pm, exclusive to Premium members. Register by clicking here for the online webinar. Or drop danita@biznews.com an email if you'd like to join us in person at BizNews HQ in Bryanston for the presentation..NB FOR YOUR WALL STREET JOURNAL ACCESS….As a Premium subscriber you are entitled to full membership of wsj.com (normal price $29 a month). Be sure to action your access through the Premium link on the BizNews website. Because of The Wall Street Journal's credential requirements, be sure to create a password which has at least 8 characters and includes at least one letter and one number – NB it MAY NOT contain any special characters (ie #, !, @ etc). To maintain access to WSJ.com, you MUST enter our partner's website via BizNews Premium at least once a month. A final PS, if you had previously signed up for WSJ you'll need to clear the cookies from your device. Our help desk can assist – support@biznews.com..If you'd like to help sustain our independent voice, why not share the love by making a gift that keeps giving? Click here to access the BizNews Premium subscription signup form, and be sure tick the relevant box (see below). At R100 a month and inclusive of full membership of The Wall Street Journal, it's a mind-expanding gift at an incredibly modest price.

Premium: The “law of seven” is due in 2022 – so watch out, Rand bulls

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