European Central Bank president Mario Draghi delivered a speech
yesterday that seems to have convinced some folk that he knew exactly how to
cure the euro zone currency woes. The plan goes like this. Any government in
the zone that is short of cash either because it is spending too much or not
collecting enough tax (and usually both) simply prints up some bonds (IOUs) and
good ol’ Mario will buy them with actual euros and bingo, the cash shortage
vanishes. Where the fresh new euros would come from was not explained but
presumably a call to German Chancellor Angela Merkel may be required. The flaw
in the plan, however, is the presumption that between now and the time when the
IOUs become due (up to three years away) the nearly bankrupt governments and their
citizen will adopt polices and attitudes quite different from the ones they
currently have, and which got them into this mess in the first place. This
seems very unlikely since everyone’s experience is that each absolutely last
and final bail-out is seamlessly followed by another and no change in policy or
attitude is necessary. The game goes on until the Germans no longer answer
their phone.
Not everyone, however, is sure that it will all turn out OK and
demand for gold pushed its price over $1700 an ounce for a spell. Until the
rand clawed back a bit of ground, this caused the rand price of the metal to
sniff out the high ground and both Krugerrands and the Newgold ETF enjoyed a
fun week. The All Share also displayed a substantial bounce and re-establishing
its assault on 36 000. Mind you, just because an index level contains a lot of
zeros the market is utterly unconcerned and there’s no telling what it will do
thereafter.
There is, it seems, a housing crisis in our royal household. The
king’s sixth wife is being forced to share digs with another queen and this,
all agree, is unsatisfactory. Fortunately a solution has been identified but it
will require tax payers to stump up a further R18m. Palaces are not cheap. In
addition to this unbudgeted item, officials responsible for the royal moolah
note that the family holds customary functions which can not be planned for and
which also have a devastating effect on the budget. Presumably this means they
have big parties. Officials have been busy establishing “best practice in other
parts of the world” (I’ll bet) and are toying with the idea of opening the
palaces to tourists. What a splendid idea. Mind you at even R100 a head it is
going to take a very big number of tourists trekking up to Zululand
to rubberneck around the king’s quarters before they can comfortably call in
the architects.
Those who braved the rain and drove to Durban docks to visit the Rainbow Warrior –
the vessel operated by the environmental pressure group Greenpeace – were
startled when harbour security insisted that the driver take a breathalyser
test. Now these brave greenies have had some very unpleasant incidents previously
with contra radicals attacking them and their boat, but why they felt safer in
the knowledge that each driver (no passengers were tested) was sober was not
explained. The activists told visitors that their target in South Africa is
to oppose the plan to build and operate more nuclear fuelled power stations.
Now that the triviality, inefficiency and negative environmental impact of wind
power is belatedly being recognised and discussed and coal is such a big no no,
does Greenpeace want us to return to the dark ages?
The ‘bok rubber hits the road tomorrow morning when they meet the
Wallabies in Perth.
People of a nervous disposition should maybe not watch. And the Lions look as
if they are going to get to the Currie Cup the long way round. That partnership
between Amla and AB at Trent
Bridge to square the ODI
series was pure magic. It would have been lots better if had been to win the
series though.
James Greener
7th September 2012.
