The most noteworthy global market development at the moment is the weakening of the US dollar. Remember how the euro got hammered when it was suspected that a number of euro zone countries were going to renege on their debts? There was a mad rush to flee that currency and get into dollars. USD was every investor’s new best friend and the US was going to lead the world to a better future. The problem is that matters economic have not really improved much in the US. By some measures it may actually be slipping back into the doldrums again.
There was and is no fundamental reason to prefer the dollar over even the euro with its raft of spendthrift socialist governments running deficits. The US deficit is rather chunky as well and flows into the USD have obviously slowed markedly. The fact that gold is again above USD1200 an ounce shows where some of the smart money is going to
Minister Gordhan made a speech this week in which he appeared to acknowledge that taxpayer’s money had indeed been wasted in the past because he assured his audience that in future this would no longer happen. The 5.5 million individual taxpayers of this nation will remain deeply sceptical of this claim.
Among the wasteful expenditure we can’t see any end to soon, is the enormously expensive legal circus that starts off the instant the state (eventually) fires a corrupt and useless senior employee. Despite the departing individual usually tottering out of the door with wads of cash that they were “awarded” for a job badly done, acrimonious litigation seems to follow almost inevitably. Strangely, the taxpayer is often asked to pay costs for both parties.
The legislation that is growing around the mining industry in this country is in a terrible mess. This week Lonmin were told that they could no longer sell some of the stuff they dig out of the ground along with the platinum that they have been mining for decades. It seems that the stuff belongs to some previously unheard of outfit that just happened to have a certain piece of paper on which the ink is still wet. Other mining houses with cash to spend are wondering if SA is the best place to do business. Government interference is a fact of life everywhere, but increasingly the problem here seems to be the inconsistent and arbitrary nature of the regulations.
A similar situation of arbitrary regulation is developing around the Carbon Emissions Tax that will be added to the prices of certain types of new vehicle. While almost no politicians or bureaucrats have any idea what carbon is, they do know that they are supposed to dislike it and prevent it and that sounds like a nice little way to earn a spot of revenue. However, unlike the compliant and peaceable section of the population who will probably not make too much fuss about the tax when they buy a new family saloon, minibus taxi drivers are a very different breed. They are likely to get excited and might start waving weapons. Therefore it has been decided that those vehicles which do the largest mileage every day probably don’t emit too much of that carbon stuff and so can be exempted.
The infamous “Ministerial Handbook” which provides not only the justification but also the obligation for officials to demand top of the range transport and accommodation will soon be amended. Big expensive cars fitted with blue flashing lights will also be deemed carbon-free.
The squabble between two breweries about whether it was fair to advertise that 660ml of beer was less than 750ml of beer has been settled on the side of sense. My Castle quart is already a bit small for the hot days we get down here. And it is the Natal / Transvaal Currie Cup clash this weekend chaps. That will require a quart (or two).
James Greener
6th August 2010.
