The price of gold in the local currency is a feasible indicator of the distrust the globe has for the governance of that country. Krugerrands now at a record R36 000 per coin is telling a huge story, but as usual the culprits are not listening. Neither is anyone listening in the USA where an ounce of gold is priced at just over $2000. The world is baffled by the choices being offered by that great nation to its voters for the next president. Reportedly the one with probable dementia is leading the one with zero self-doubt.
The rand has lost its courage again and is weakening against most other currencies. Everyone will have their own reason for this, but my choice is the bland insouciance displayed by senior government when asked why they are apparently crushing the life out of the old economy. Not one response, statement, or action appears to be made with the objective of resuscitating or supporting the way we used to go about our lives. Indeed, it is the very opposite. President Cyril and his accomplices are steaming ahead with the National Democratic Revolution to create the “perfect” communist state where the cadres are above the law and well rewarded. Just this week following on widespread allegations of looting by the elite of the latest funds for PPE medical supplies, the appointed task team comprises precisely those untrustworthy cabinet ministers most likely to be at the apex of the mafia planning the heist.
It really is cruel that vehicle license authorities stick with the century old system of issuing a circle shaped licence disc printed on a sheet of stiff paper. This is blatant bias against those who don’t even own, let alone are able to find an appropriate pair of scissors. Usually it is either a pair with a serrated blade from the kitchen drawer or a dainty pair of curved finger-nail trimmers scavenged from the toilet bag. Further it evokes terrifying memories of kindergarten handiwork lessons involving blunt and rusty scissors plus glue and garishly coloured tissue paper with colours that ran. Why not shape the licence as a different straight sided polygon each year? Cops could tell immediately if one was expired.
Proper economists are advised to look away as Tidemarks offers its explanation of how Gross Domestic Product is measured and why it isn’t that good at the task. Imagine that every single transaction in the country between two parties involving the exchange of money in return for goods or services produced a “till slip” recording that deal. Well the sum of the monetary amounts on those billions of till slips generated during a selected period (usually 3 months) is the GDP. And the change in this GDP total from one period to the next is taken as the measure of the growth in the nation’s economy. It can of course be negative which naturally is a bad thing. A common objective of governments is to try to maintain economic growth rates higher than population growth rates. Thereby ensuring on average that everyone is spending more than last time. However, the huge difficulties in even determining GDP are immediately obvious What about the uncounted transactions that take place mainly in the informal, largely cash based sectors? There are also difficulties associated with correcting for inflationary rises in the prices. These, as well as seasonal effects, are adjusted for by Stats SA before publication. This fine outfit – reportedly being currently threatened with budgetary constraints -- also classifies and sums the basic data sorted by industry sector and the whole shebang appears as a freely available two dozen page booklet every 3 months. The grist for many a mill. The purpose of this paragraph is to help readers prepare themselves for the avalanche of horror Covid-19 induced negative growth stories that are about to hit us. Things are undoubtedly bad, but not as bad as the official numbers will suggest. Simplest example: booze and tobacco are still trading but are not being counted!
It is so sad that a nation that currently has the Rugby World Cup trophy on its shelf (has anyone checked its still there?) is so unable to match its southern hemisphere peers in coping with and planning for the disruption to this (and indeed all other professional) sports brought about by the virus.
James Greener
Friday 7th August 2020
