FUNNY MONEY

Just two months ago the price of a single euro was around USD 1.12. These days it is a mere USD 1.04. Simply put, people now want dollars and don’t want euros. And this is despite all the waffle and panic about the US president-elect who, it has been alleged, will lead that nation into ruin. So far the markets don’t agree. Somehow, without much fanfare the world has slipped into a new normal (dread phrase) with at last US interest rates rising. Just this week the Federal Reserve risked another 25 basis points increase – the last one was a year ago – but at this pace and the mind-set of absolute control we may never learn what the true cost of money ought to be. In the meantime, US share prices are off to the races and with the notable exception of gold most other commodities including oil are rising.

Back home it is amazing to watch the value of exports slowly closing on the value of imports. Despite the interminable interference of know-it-all government, the private sector is getting stuff done. This is also showing up as the resources sector being the best performer of the year with the banks coming a close second. However, the hard pressed consumer sector (a difficult idea to grasp for anyone who has visited a shopping mall in the last few days) will drag the overall JSE performance in 2016 to no more than about 1%. In other words it has been a difficult year for investment. Just like all the others!

A useful number to keep in mind when reading about all the cash that seems to slosh about in the SA economy is that total notes and coins in circulation is in the region of R120 to R140 bn. The variability is a well-established monthly pay day effect. So stories of the neighbour paying cash for the new Ferrari or the gent on his way to Dubai with seven suitcases of folding money are small fry. Undoubtedly though millions of us are getting through the day without banking facilities like savings accounts, credit cards and EFTs. Now Venezuela has followed the example of India and declared their largest currency note valueless to throttle this sort of untraceable and probably untaxable business but have caused unexpected consequences everywhere. Fascinating. This governing business is difficult.

The current parliamentary investigation into just what has been going on at SABC, the national broadcaster, has established only one thing for certain. No one has a clue. The chief politico in charge of the farrago, who is misleadingly titled the minister of communication, demonstrated award-winning skills in denying responsibility and buck-passing. Her performance made it abundantly clear why the SABC and the country’s overdue so-called digital migration project are in chaos. Complicated technical issues such as bandwidth, broadcast spectrum and signal encryption are obviously secondary to ensuring maximum benefits for insiders including Number One and his puppet masters. Minister Faith Muthambi has, to quote her official profile, “a string of qualifications” of which only a Certificate in Computer Training might be even vaguely relevant to her current post. However, as an Advocate of the High Court she undoubtedly knows how to find and argue a loophole.

Anyone venturing into the world wide web swamps at the moment is deluged with ideas for what the advertisers claim are last-minute gifts. Come on guys. There are 8 more days to Christmas. Last-minute is just that and with almost round the clock store openings it’s possible to get stuff to put under the Christmas tree just moments before the recipients pitch up! It’s a boy thing.

It's hard to believe that an extended talk-shop is the solution to SA rugby’s woes. What might be more successful is having far fewer administrators being paid to talk and diverting that money towards players who are paid to perform. Everyone in the business should be in fear of losing their place if the results don’t improve.

James Greener

Dingaans Day 2016

UNABRIDGED IDIOCY

Every three months Stats SA informs the nation how hard it worked in that period. The latest announcement was “Not very at all” and promises of meetings to arrange improvements blossom everywhere. Some consolation was squeezed from the news that the “analysts who should be feared” (aka ratings agencies) have surprisingly held off from downgrading South Africa’s credit rating. Nevertheless, the GDP figures were terrible with most economic sectors producing less value than previously. Most shocking (although being used by Eskom to boast about their overcapacity) is the observation that Utilities output has declined in five of the last six quarters. Is it just coincidence that the Financial and Government sectors are the sole ones to have grown without a pause in the last six years? All that wasteful and unaccounted expenditure must go somewhere!

Deputy president Cyril has been getting all dewy eyed at how wonderful the latest round of minimum wage legislation is going to be for the poor. For a man who can, at a glance, price a buffalo bull to around the nearest million, his grasp of this aspect of the economy is very poor. The total amount of money available for paying the lowliest workers doesn’t increase just because the government says so, and therefore the consequence of a higher minimum wage is mostly fewer wage earners.

If government fiat could indeed make everyone richer then why not just increase this magic number to the desired level in one move? Even the buffalo king must be uneasy with that logic. The only way for the country to grow richer is to stop paying salaries and grants to all those people and students who have nothing to show for their presence but a warm chair seat and dirty tea cups. We, the paymasters, want to see useful deliverables and amazing results from our beneficiaries.

A fellow was tossed off a plane here in Durban only after he had boarded and checked through seven suitcases stuffed with many millions in SA currency. This raises a few questions including what the x-ray image of that sort of luggage looks like and if anyone looked at it. Another is where in the world is there a bank teller prepared to accept without question a very large number of leopards and buffalos, as our two largest denomination notes are affectionally called? Perhaps the answer to the second question lies in the fact that the plane was going to Dubai where Number One’s best friends have built a luxury home.

Claims that a recent court judgement has cleared up the difficulties about the proposed new liquor licensing legislation are not entirely true. The learned judge’s geometry has let him down as he rattled on about an exclusion zone of 500m circumference when he should have been talking about radii. What is still not clear however, is how the lawmakers decided that pupils and churchgoer would regard half a kilometre as too far to travel to get a drink.

The rapid approach of the Christmas season is affecting thinking in all corners of the nation. A think tank tasked with making it easier for foreign visitors to enter South Africa came up with the breath-taking idea to demand abridged birth certificates for minors instead of unabridged ones. The sole difference is in the adjective. But the real genius of the plan however, is that this announcement will not be publicised until after the holiday season.

Over at the schools, the chickens of a broken system are roosting. To keep the conveyor belt of pupils moving through the public “education” system, passing standards are again being compressed. In maths, at some senior levels, getting just one out of five sums correct is now a pass. Herein lies the real tragedy of this country. Just because our leader is innumerate does not mean that we can abandon all our youngsters to the same fate. Pleasingly, however, private enterprise is finding ways to enter the field and satisfy customer expectations while still making money.  This sits uneasily with the militant, incompetent, unionised, bullet-proof layabouts insultingly calling themselves teachers.

Thank goodness for the Bliztbokke! Is there any substance to the rumour that 5 SA taxi drivers have applied to fill the seat at Mercedes vacated by Nico Rosberg?

James Greener

Friday 9^th December 2016

HILLARY WHO?

The really big news of the moment is that lots of rain is falling all over the country. It will take a while until we see what ultimate benefit there is to the various river systems and dams but it must be substantial. The insurers though may not be quite so happy as it seems that a lot of damage has been caused by the downpour in some areas, but overall the spirit and mood of the country must improve. We may almost soon be ready to forget the hateful, hurtful and racist yet unchallenged rant from an elected MP encouraging genocide and theft. It would however be nice to see him handed a painfully large fine – payable immediately to a charity chosen by the targeted parties.

Well isn’t this democracy stuff astonishing? You give people a choice and they choose. Just as amazing has been the over the top panic reactions to the news that a man with no political experience or background will now become President of the USA. But that’s the point. Trump’s victory suggests that the electorate have grown weary and wary of the same old Washington insiders and dynasties wielding the power and milking the systems. Much the same reaction emerged in our own elections in August and the British referendum a couple of months before that. More and more of us want less government in our lives.

Apparently, the most terrifying thing about the President Elect is that he is aware that debt is the country’s big problem and that the best way to solve this is to reduce government spending. And reduce borrowing – which is probably why interest rates are ticking up. Many of his ideas about how to achieve these changes threaten the way of life of various communities who have become used to being recipients of state hand-outs.  Some Americans have taken to the streets to register their disappointment by burning stuff. A familiar reaction to us down here.

There is an unproven notion that people who have more wealth than they deserve should have it confiscated by government who will spend it more wisely than they would do. The popularity of finding ways to minimise tax suggest that this notion is detested. The latest shot in this skirmish comes from the government of India who this week declared that the two largest denomination bank notes in that country would henceforth be valueless. Holders of these notes may take them along for exchange into smaller denominations but must explain why they hold so much cash. The answer “to avoid the banking and tax system” apparently will not do! Think about what might happen if they tried that here.

A bank’s Market Update letter to clients for 9^th November was headlined “The US elect Mr Trump as its next President”. If this was news to any of that bank’s customers, well, it’s just as well someone else is looking after their money. The heading also carried a warning in red capitals that the document – delivered by email -- was not for distribution in the US. This was the first warning sign that foolishness was present. Further reading revealed that four of the report’s six pages were devoted to disclaimers in small print, the gist of which was: “It is very likely that parts of this document are rubbish, so don’t make decisions based on it and if you do, don’t blame us if you lose money”. This nonsense is the work of Compliance – a wealth destroying department in most businesses – made necessary by governments that have encouraged social and commercial environments in which an unsatisfactory outcome is some else’s fault. Hopefully Trump will inject some realism here as well.

It’s one of those weekends when the Springbok teams of all three major sports take to their respective fields [Yes I know the government says that two of them can’t be Springboks – but they are!] The soccer team has a new cap in the form of Lars Veldwijk, a Hollander, the rugby lads are up against their opposition’s (England) nearly unhinged coach and the fellows in white should enjoy themselves in the picturesque if rather damp Hobart. And there is the (Several) Million Dollar golf at Sun City and a GP in Brazil. Busy busy.

James Greener

Armistice Day 2016