Despite
having a President which the biased and toxic so-called social media
commentators declare to be awful, dangerous and useless in this time of crisis,
the US markets including its currency show that the majority of the world’s
money would like to be in the USA. Odd hey?
Pretty much
everyone was taken by surprise when the SA Reserve Bank’s Monetary Policy
Committee this week again cut the repo rate by 100 basis points. This brings
the total drop in that rate since the beginning of the year to 225 basis points.
The idea behind this outbreak of interest rate cutting all over the world is
that it will encourage and help borrowers better to afford their new and
current debt and thereby stimulate economic activity. Interestingly the longer
dated “paper” (bonds) didn’t change appreciably in price. An indication that
the market didn’t like the cut?
But as in
everything – particularly finance – there is the other side of the page. In
this case it is the lenders. Also called, almost contemptuously, “the investors”.
They are not happy. Monthly interest income before any taxes for these folks has
been decreased since January by around 30%. It is time to revive the experiment
tried in 1999 and use a market driven auction system to determine the “true”
cost of money. This experiment was terminated when it was realised that
collusion in the auction between the largest banks was rife and frankly most South
Africans are content to have a baas tell them the price of something as
difficult and strange as money. Perhaps we now have a few more players and
certainly a more eager inspectorate to try again.
I sense that
there has been a change in the attitude of both the authorities and the citizenry
as we begin the second period of lockdown. The former would appear to be
enjoying the opportunity to ratchet up the authoritarianism, despite there
being scant evidence that this will help the battle against COVID-19. Most bureaucrats
and politicians by and large are losing interest in the battle which seems to
be going well but importantly, diverts resources away from schemes and programs
which are far easier to loot. For instance, SAA has at last been sent for
euthanasia and it was a happy hunting ground for generations. All those free for a lifetime air tickets for
parliamentary bench warmers are now valueless.
We on the other hand are worried that there
seems to be a growing taste for central planning and control. Which may not all
disappear even when the virus is just a long chapter in the textbooks. Reportedly,
panic broke out in the halls of power when someone caught on that people were buying
cooked chickens at Woolworths food stores and eating them! This eating of food
that you did not cook yourself is apparently not allowed. Like walking alone on
a deserted beach.
It is also
very alarming that many ministers are unable to grasp that the growing criminal
lawlessness (as opposed to ignoring petty and inexplicable regulations) are the
consequence of desperation and not just a craving for a drink or a smoke. We
are warned that the complete relaxation of the lockdown will take a long time
and needs to be phased in. Ministers, it’s likely that you don’t have much
time. People are hungry and angry. And are not interested in flattening curves.
The pandemic
is peeling away the screens of privacy that shielded many human activities from scrutiny. Not least in professional sport
in which the personal rewards for supreme excellence dwarf almost every other
way to earn a living. Now the bubble inflated by sponsorship, television
broadcast rights and egos is deflating fast. Reruns of exciting events from
years past are not drawing viewers and therefore advertisers are making painful
decisions. Postponing the Olympics by a year must be costing a great deal not
least in the dreams of the youngsters who had prepared their whole lives for a
few days in July 2020.
Google has
reported a huge surge in the numbers of on-line requests for tips on how to cut
one’s own hair.
James
Greener
Friday 17th
April 2020. Day 22 of the Lockdown
