Friday, 23 June 2017


The eye-catching data item in a week which promised much more is the oil price which is leading many dollar priced commodities downwards. Not many forecasts got this right, focussing naturally on the numbers which suggest that some economies are starting to warm up. But maybe it’s like the sun after this week’s solstice. Even if the sun is on its way back south, the coldest days of our winter still lie ahead.
The claim attributed to Number One that the Gupta emails were deliberately leaked in the interests of transparency must surely be fake news put out by Gupta network “sockpuppet” accounts.  Or merely the response of a confident president? But investigative journalists sifting through the trove of incriminating emails are eliciting fewer “golly gosh” responses. The world is now at the scene of a gory collision between the timeless phenomena of self-serving avarice and instant communication. Even the bona fides of the survivors are suspect and most witnesses are unreliable. The perfidy and unscrupulousness of our companions on this globe is not new. It’s just that we find out sooner and move on more quickly.
Few people really understand how banks work. Most of us still probably cherish the notion that they have vaults piled high with sacks of cash neatly labelled with each depositor’s name. It’s quite a step to appreciate that in fact they have speedily lent that money out to borrowers who pay interest to the bank at a far higher rate than the bank pays its depositors. But it’s far more complex than that and concepts like fractional reserve banking – not to be confused with Central Banking – enable banks to create money that doesn’t actually exist as notes or coins. Lending this type of money can be immensely lucrative, provided of course that the debt is serviced and repaid on schedule. Which is why banking licences are valuable and Number One’s Indian mates have been trying to get one.
Politicans and their staff are particularly unhelpful in aiding a better understanding of the topic. They assure their constituents that it is possible to change banking so that the wealth stored in the system can be given to the deserving poor. History and mathematics shows that this is not possible to achieve sustainably. Fortunately, in South Africa we also have constitutional barriers to tinkering with the Reserve Bank and other important institutions. But the rhetoric does fire up the hot heads who phone the spin-masters for another glib phrase to chant as they dance down town with songs and demands.
This week a terrifying pie chart graphic was released which shows that the number of taxpayers is now less than the number of social grant recipients. Of course, the amount of tax paid is far larger than the total amount of grants made, and that difference is used for civil servant salaries, servicing of the national debt and paying the private sector for providing goods and services to the government. Since looting grants, salaries and debt repayment would be quickly discovered and very unpopular, the pillaging is concentrated on the contracts awarded by tender. A chart illustrating the cash flows in this aspect of our nation would be even more scary.
“Balance-sheet Aid” is a delightful euphemism now being used by the utterly bankrupt State-Owned Enterprises who are in serious need of plain hard cash to pay their bills. The national airline has received a “Dear John” letter from a bank which not only won’t lend them any more, but has even asked that the present loans be repaid now. Panic! Surely it’s time for a “Headcount Cull”?
Someone chose a bad week to tell South Africans about an exciting new T20 global tournament. That’s a format in which many of us are quickly losing interest. A 9-wicket loss to England! Really? It’s also been sad to watch AB reach the end of his glory days with the Proteas. The GP venue in Baku is strangely sterile and without character. How about that odd two-dimensional castle in the middle of the track? Oh well Silverstone and Spa are coming. And if you need something really different what about sailing craft touching 50knots at the America’s Cup. Barely a rope in sight.
James Greener
Friday 23rd June 2017. Olympic Day apparently.