You don't need to be a money changer or a sophisticated investor to know that the rates have been going south lately (or North depending where you are standing). Whether you know it or not, the effect can be felt across the whole economy. Well, if you didn't know the official RTGS/USD rate has recently hit 3.5 from 2.5 with the black market rate creeping towards 5. What's alarming is not the exchange rate but the rate of deterioration currently hitting the recently introduced RTGS Dollar.
The Purpose of this article is not to tell you what's happening on the market. That you can read on your own. We want to give you some tactics on how to survive in this market until things get better.
Just a little background
Marginal inflation rates between 2% and 3% are usually considered indicative of a healthy and growing economy but when it creeps up, the red lights start lighting up in people's minds and the whole economy reacts. Once it gets out of hand it graduates to hyperinflation. This is when the rate crosses 50% per month. It is so extreme as it means that something that cost $1 at beginning of the year could end up marked at $130 by year end (God Forbid).
Yes we can talk about the mechanics of inflation from an Economics point of view and we can do the analysis of what causes it and get the results but at the end of the day, all you need is to survive in this environment if ever your business has an opportunity to see the better days ahead.
No wasting time, the rates are moving. Don't even spend too much time reading this article (or any other). Just read, make notes, action plan, implement and MOVE! Right, here goes...
Survival Measures
1. Find alternative ways to store value and stockpile assets that will hold value. More on this later.
2. If your business is in retail or any other which is based on stock base. Make sure that 90% of your cash resources is stored in stocks.
3. Consider marking up prices in an alternative currency even if you do not charge in that currency.
4. You may need to hold a quarter of your assets in an offshore account as long as you do it within the proper legal routes. Don't break the law.
5. For households, maintain enough supply of food, medical supplies, toilet paper and reliable way to cook in case there are power outages.
6. Use low cost transportation systems.
7. If your income allows, buy some farmland. You will thank me later.
8. Consider serving export markets more if possible.
This list is not meant to be exhaustive but to give you a headstart. Nothing can kill you if you react properly. Don't blame anyone, just make the proper decisions and work on them. The storm always passes, it can't blow forever.
Comments
Post a Comment