A wonderful and acrimonious but actually rather meaningless squabble has broken out in the investment world this week. Naturally it concerns numbers and the meaning of economic data and has allowed Tidemarks to unearth his battered old drum and resume beating it vigorously. Rather like sport, the financial world depends on the score to describe their universe. Most of the scores concern the measurement of wealth and value and are expressed in units of currency. One of the tasks expected of a government is to create an environment in which its citizens can grow their wealth. The GDP is one statistic used to monitor the success or otherwise of the government’s endeavours and it is an amazingly crude and blunt instrument for this task. Typically it is calculated for a three month period and in SA for example is published only almost two months after the end of that period, so it is far from current! Considerable adjustment and “data abuse” takes place before publication, of which the largest is a correction for inflation. The point being, that everyone wants to see a GDP number (these days, in SA, expressed in trillions of Rand) that is larger than its predecessor. If, however, it is smaller, and even worse, also less than the figure from 6 months earlier, the nation’s economy is said to be in a “Recession”. Which is a Bad Thing. This week the USA government published its GDP number for the Second Quarter which triggered the “Recession” condition. Obviously, the Biden administration would be very embarrassed by having to admit this taking place under their watch and have robustly denied this definition and status. They appear even to have pressured Wikipedia into striking out their entry of this definition! We await a new definition.
Meanwhile these arcane definitions and measurements are not reducing the anxiety that is definitely growing among the citizens of the world. Whether it is the so-called “Global Elite” or even our local city councillors, their understanding of and plans for the future are grossly at odds with our need for reliable power, clean water, plentiful food and sensible transport. Almost more worrying than their failure to provide these things, is their foolish and wasteful intervention in poorly understood vanity projects like sustainable energy. Most nations already have the legislation in place to discover, prove and control the selfish and damaging excesses of the private sector? Why don’t they use it?
The headline said “Eskom Seeks Partners for R1 trillion Energy Transition” and so no further reading of the article was necessary. At least three words there warn the reader to run for their lives. Starting with trillion, a sum of money beyond comprehension, let alone Eskom possibly finding. Since all monetary payments for anything everywhere ultimately ends up the pocket or purse of an individual the implied annual cost per head of the number of people who would even legitimately be involved in such a project causes one’s brain to melt down. Next, is the word “Transition” which in this time and place hints at the dread hand of “political wokeness”. And finally, the gross misuse of the term “Partners” which suggests the possibility of joint wealth creation. With Eskom? Come now.
Here in Durban, we have enjoyed a wonderful months long reprieve from the increasingly fierce power cuts suffered by the rest of the nation. Apparently the two “rain bombs” which hit us earlier in the year, seriously damaged so much infrastructure, including electrical substations, that it was impossible for the City Sparkies to implement safe selective switch offs, aka load shedding. But now it’s over and from next week that excuse won’t wash. We are back with the rest of the nation. It is interesting to see how many houses around me have installed solar panels. The home repairs and maintenance sector of the KZN economy is definitely not in recession! I’m looking out my Coleman pressure lamp.
With the Commonwealth Games now under way (weren’t we bidding to host it?) and athletics world champs just finished, it’s very heartening to see so many fit young people apparently able to tune out from the madness of the world and focus on being the best they can be. It’s also interesting the extent by which records are still being broken. How is that? Are drugs a big thing?
James Greener
Friday 29th July 2022
