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mickeyman
Penny Pincher Member
Canada
243 Posts |
 Posted - 07/25/2008 : 11:06:11
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Posting to you live from Ghana, West Africa. The Ghana cedi has fallen in value against the US dollar by over 10% in the past six months (the last time I was here), so you know it is doing really poorly. The foreign exchange market is somewhat distorted, however, and the Canadian dollar here trades at a 10-15% discount against the US dollar (1 US dollar gets you 1.05 cedi, but 1 Cando gets you only 0.9 cedi).
Since the last time I was here, the price of tea has risen 60%, bread at least 30%. All other essentials have risen similarly.
Another change is a significant increase in casual street sellers. These are equivalent to the homeless back in Toronto offering to clean your windshield. We get those here, but also people running up offering to sell you anything from water (of unknown origin) to apples, potatoes, chocolate, tummy tighteners, dogs, toilet paper, newspapers, etc. Also, most of the people we know here have very little food. These have historically been signs of tight money.
Bank loans charge 25% per year, and a cedi account pays about 0.2%. There are guaranteed certificates that will pay 17%, but you need to deposit the equivalent of $100,000 to get that rate. If money really is tight, then this might not be a bad investment.
In 1997, with the official inflation rate over 30% and the banks paying 40% on GICs, the government instituted a tight money policy which reduced inflation to zero for an entire year. Those GICs were good investments, but only if you were able to get your money converted to a foreign currency afterwards, as several years of high inflation followed.
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Not all who wander are lost. |
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Inflationary deflation stalking Ghana
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