The sad and
alarming news that Zimbabwe looks to be once again destroying itself with its
new currency by sliding into uncontrollable inflation is yet another chapter in
the book about the dangers of centrally run economies. Among the early signs of
most financial calamities is the appearance of spuriously accurate statistics. That
nation’s inflation rate is now quoted to five significant figures as being
175.66%pa. What this means is that consumers are now faced with average prices almost
3 times higher than a year ago. In like vein our own Reserve Bank told us
yesterday that our nation’s economy is so finely balanced that the monetary
policy committee felt that it would be able to withstand a reduction in the
price of money of no more than one quarter of a percent. Such finesse! So now
banks, borrowing overnight accommodation funds from the Reserve Bank (the repo
system), will pay just 6.50%pa down from 6.75%pa. Wowee! Pensioners dancing in
the streets, shops limiting customers to one trolley each, boom time is back.
New readers to Tidemarks are cautioned that excessive irony is an occupational
hazard.
To be fair
though the interest rate cut is more a (virtue?) signalling move rather than a
big kick start. The hugely indebted are barely going to notice the decline in
their monthly repayments. And at the other end of the yield curve it is
unlikely to offer much comfort to those lenders with big exposures to the many
state-owned enterprises that are already battling to pay salaries and are defaulting
on pension fund contributions. Still no word of pruning costs though. Budgetary
Control is not a big thing here on the southern tip.
Ex-president
Zuma’s appearance in the hot seat at the Zondo commission of inquiry into state
capture didn’t work out as he hoped, and so, like Elvis he’s left the building.
Sadly, he didn’t have much memory about recent events but he did have near
perfect recall about all the spies, enemies, poisoners and assassins he had to contend
with in his early day as an ambitious politician. Also, like most of us, he is
a bit hazy about exactly what state capture means but his characterisation of
the shady Gupta brothers as good guys who merely found well-paying jobs for two
of his sons convinced nobody. He appeared to be genuinely puzzled with
suggestions that he hasn’t been much good in any of his many jobs, especially
the spell at the helm of the South African government. Sympathy for him,
however, was not visible at the commission.
The boss man
of the company that makes Glenmorangie, a premium Scotch Whisky brand, is in South
Africa promoting his tipple to what he has identified as “a developing urban
and middle class with resources to afford it.” Doesn’t that make you proud? And
wonder about those who whine on about this being the most unequal nation on earth.
They can’t both be right so in future we all need to see and use the stats that
the Glenmorangie fellow is using. SARS might also be interested.
About the
only good outcome from that Super Over circus at the Cricket World Cup final is
that it prevents the New Zealanders from possibly being able to claim two major
world cup titles in one year.
The first
weekend of the Currie Cup did not go well for many in my circle and now we are
in that period where internationals appear in schedules causing even more
stress. Fortunately some sense has prevailed and in this world cup year the
fixtures have been curtailed. Those of us raised on a limited number of
international sports events every year are in two minds about whether sports
men and women earning more air-miles than caps is all that good for anyone
except the television companies. The fact that the loudest and glitziest
advertisement currently on the Supersport channels boasts that that company is
Africa’s largest sports sponsor sort of gives the game away about who makes the
most money out of this particular merry-go-round.
James Greener
Friday 20th July 2019
