A little while ago the US
worthies who meet in Washington
from time to time to set the price of money in the land of the free decided
that the world deserved to know how they reach their decision. So this week the
minutes of their last meeting were published and the markets caught the
vapours. By now what the minutes contained matter less than the observation
that a two week-old record of a bunch of people discussing the inevitable and
obvious can cause such damage. Perhaps it has been the rise of more or less
instant distribution and consumption of this kind of frothy and mostly
insignificant data that has eclipsed the solid and basic indicators of the
ability of each nation’s economy to grow. The more tenuous and volatile the
data set, the seemingly greater the over-reaction.
It has been another dreadful week for the mining shares. Investors
are clearly worried how any of them hope to make money digging stuff out of the
ground when a) some people are suggesting that appetite for the stuff is waning
and b) there is always someone official pitching up at the gate to deliver a
new regulation. That first concern is mainly about China which has released figures
that could indicate a slow-down. While there does appear to have been an
political showdown in the country which is upsetting those who failed to
predict it is difficult to forecast a rapid slowdown in that country’s demand
for raw materials. After all the USA – one of their bigger customers
– is reportedly struggling back to its feet.
Iron and steel seem to trigger a very bad response in politicians
all over the world. From time to time they reach the conclusion that the folk
and businesses that actually produce and use the stuff are in sore need of help
and advice. The fact that most politicians have never run anything except to
the luncheon buffet does not discourage them from interfering in the processes
of producing and selling this rather useful metal. The latest piece of nonsense
in this regard is the declaration by our wise government that they “will deem
steel to be local even if it is imported”. This glorious foolishness is
necessary to get themselves out of an embarrassing situation caused by some
prior meddling in the market place. Bureaucrats should be forbidden to use this
delightful and powerful word unsupervised. In January they deemed that pretty
much any school leaver who had managed to find the examination hall and write
their name on an answer book was eligible to go to university and read for a
Bachelors degree. This was a cruel and misleading deem.
Long time readers will be familiar with my contention that the sole
value of the wealth-destroying program of political allocation of assets is to
provide material for research projects by future students of economics. Our own
version of this program, called BEE, has attained a new level of dangerous
absurdity in the fishing industry where “a black-owned company may not sell
interests or rights to anyone who is less black”. The irony of this policy is
breathtaking and terrifying, particularly if, as is expected, it soon appears
in other areas of the economy. From a purely technical side, however, it would
be interesting to understand the physics required to distinguish between one
absence of light from another.
Thank you to those who explained that the hastily arranged T20
against India
at Wanderers was supposed to be a Jacques Kallis benefit match. This is so
insulting that it confirms that despite some rearranging of their numbers the suits allegedly in charge of the game
still have no idea what to do. The Boat Race, The Two Oceans marathon, The US
Masters and lots of rugby will keep the telly and the couch hot this weekend. And
aren’t you relieved that at least the kit for the Olympics has been chosen and
shown off at a fashion show? Now can we put the same effort into nurturing the
athletes?
James Greener
Maundy Thursday 2012
