In less than 5 months the monetary authorities in the USA have increased the cost of money in the most basic and key market by 400%. This interest rate, known as the Fed Funds rate, was cut dramatically to 0.5%pa in early 2020 as an intervention to ameliorate the effects that the lockdown response to the pandemic were expected to have. They weren’t wrong there! It remained unchanged for an unprecedented 2-year period until this year when in just four steps it has been hiked to 2.5%pa, a level equal to a multi-year high. This 200 bp change does obviously trickle down to increase the cost of credit in all its forms in every corner of the US economy. Allegedly this will control and reduce the massive and painful increases in inflation which everyone, except the Biden administration, is complaining about. Funny stuff economics, hey?
So, the boy from Brooklyn (the one in Pretoria) is going short Tesla (his own company) in case he is forced to go long Twitter (not yet his own company). What a messy situation when he (Elon Musk) seems to have so many other projects in need of his guiding hand and intellect. But perhaps the other side of the Tesla trade is not all that great either. Tidemarks has already noted the growing realisation, if not outright panic among leaders and their “expert advisers” -- that renewable energy is not the same as ample energy. The alarming choice between Heat or Eat reportedly faces many people in the northern hemisphere in the forthcoming winter. Even if the Doom Pixie and her acolytes were right about there being proven and perfectly understood links between atmospheric gas concentrations and the globe’s macro environment, the unassailable fact still is that we do not yet have better fuels than those that need to be extracted from out of the ground. Namely coal, oil and uranium. Hydrogen as a fuel is sadly still rather dodgy although it does feel as if it ought not to be so. Battery powered transport is a very expensive technology not yet nearly capable of doing what most of us expect it should provide. It won’t be long until this fact starts to gnaw away at the enthusiasm of those who believe they are saving the polar bears.
A much-trumpeted feature (security) of the blockchain structure for storing financial transaction records never seems quite to fit with the frequent stories about theft in the mysterious world of cryptocurrencies. Invitations to join the crypto party pop up on the ‘net with ridiculously minimal requirements that assure us that merely one click of the check box (and presumably a credit card number) will fill my Wallet – not the leather one – with “tokens” bearing the weirdest names and that are perfectly safe! None of that tedious FICA stuff seems to be necessary. Recently, the University of Johannesburg has become the first South African tertiary institution to use blockchain technology as an additional security measure to protect its degree certificates against alteration or falsification. A QR code, the modern version of “Open Sesame” is printed on the certificate. So that’s alright then.
Always on the lookout for things that should interest and maybe concern readers, Tidemarks unearthed the following revelation of how the bureaucrats are spending our money. The National Treasury seems inordinately proud that South Africa is one of five pilot countries that are participating in the Fiscal Openness Accelerator Project (FOA) that was launched in 2019 by the International Budget Partnership (IBP) and the Global Initiative for Fiscal Transparency (GIFT). Since they probably also have scant understanding what this means, other than having meetings, they have this week solicited comments and called for “pre-budget consultation for the 2023 Medium Term Expenditure Framework”. Here’s one: Halve the state salary bill by firing the most expensive 10% of the civil servants.
The demise of the printed newspapers that most of us were quite used to paying for has had serious employment implications for the journalists who were worth supporting. That is the sports reporters, a specialist niche who often have fascinating insights into this marvellously diverting and largely unproductive human activity. The few who are left are issuing warnings that the bokke will find a very different All Black team awaiting them at Ellis Park this weekend. Hmm.
James Greener
The Glorious Twelfth, 2022 (unless you are an infamous grouse that is)
