South Africa: The Road to Socialist Utopia
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Zimbabwe: 10,000 Blacks starved to death after White Farmers were chased out
2004: The Black Government denied that Blacks were starving to death. Here a Black Bishop gave some statistics. In here you‘ll read about nasty events that were hidden from the world.
[The bank with the liquidity crisis he is referring to might be Trust Bank. Trust Bank was an Afrikaans bank, and I later found out that Trust Bank was using computer software to engage in a certain type of trading, which caused it to lose masses of money. That might be what he is referring to. Jan]
In the early to mid 1980’s, as South Africa was speeding its way towards global isolation, there was a small domestic banking crisis. Back then I worked in the financial markets and one afternoon sometime in 1985 rumours swiftly spread in the market that one of our commercial banks was experiencing severe liquidity problems and was unable to pay out depositors. As Winston Churchill allegedly remarked, “A lie gets halfway round the world before the truth has a chance to get its pants on”.
Who knows what happened? Maybe a dealer told his wife who told several friends who told several more friends but before you knew it there was panic in the streets and long queues were forming at bank counters and the fairly recently introduced ATM machines to draw money. The central bank acted swiftly but no amount of denials could calm an increasingly panicky public.
I recall going to the Sandton City branch of the bank and watching bags of banknotes being openly carried into the bank. Security was of secondary importance; what was important was that customers could see with their own eyes that there was no shortage of cash. Within a few days the panic had died down and normal service was resumed.
The following year Chase Manhattan Bank pulled the plug on South Africa ushering in sanctions and the debt standstill and a good friend from the previously troubled bank had to explain to his international depositors why the funds they deposited on Friday afternoon could not be paid back on the Monday morning and why they should count themselves lucky that they would, at least, be paid the interest. It was not a great time to be pursuing an international banking career with a South African bank with global ambitions; particularly if you happened to be posted to Hong Kong where you would be running into your hostile counterparties all the time.
One of our great strengths in South Africa is that we have a well run and highly efficient banking system. While we still have sensible people running the central bank we shouldn’t lose any sleep. However, we know that the commies seem to have the most dominant voice in the Kafkaesque National Command Council and that they would love the keys to the Reserve Bank vaults and control over the money printing machines. It’s surely only a matter of time before they get their way.
Before that happens though and we become the new Zimbabwe we are likely to experience a pre-revolutionary banking crisis.
We have been in lockdown now for almost seven weeks. In that time very few businesses will have been able to operate and even those who could operate quite safely through e-commerce have been forbidden from doing so by Comrade Ebrahim Patel because it would be “unfair”. An ‘opinionista’ on the Daily Maverick website wrote recently:
“We have now seen the naked truth about capitalism and the inept manner in which it purports to deal with this invisible enemy, COVID-19. We are told that money can solve all our problems, that nothing is too big for capital to handle, but what we see now is putrid and pathetic”
I’m assuming the writer of this nonsense doesn’t accept money as payment for his services as a director of a consulting firm but prefers to rely on barter. Maybe some loaves and fishes for a hard days consulting?
Far from being inept in dealing with this invisible enemy it is precisely the absence of capitalism that is causing all the problems. If you don’t have good old money sloshing through the system it quickly becomes apparent that people cannot pay for, or be paid for, goods and services. That is precisely what we are facing now.
So, let’s assume that Mr 40 something Average guy had a nice little business running a couple of restaurant franchises. He hasn’t been able to earn a living since the end of March but is repaying a loan on his house, his car repayments and has two children and a wife to provide for.
In the first few weeks he paid his loyal staff 80% of their wages but obviously they have missed out on customer tips for seven weeks. His cash flow has dried up and he has no savings to fall back on so he can no longer pay them.
Since he employed mainly Zimbabwean and Malawian staff they will not be entitled to any payments from the SA government and if Tito Mboweni has his way they won’t ever get their jobs back because we apparently need more SA born waiters; so much for the spirit of Ubuntu. They will either become adept criminals or they will starve.
He was also paying rentals on his business premises but has already defaulted on that and he’s not alone. Tot up how many businesses in an average shopping mall won’t be able to pay their landlord and you already have a major potential headache for developers and commercial property owners. Since banks lend on the security of property that will ultimately become the bank’s problem.
Like many people during the good times our Mr Average over-extended himself on his motor vehicle purchases and still owes R450 000 on his Golf GTi. But the market is very depressed at the moment and supply far outstrips demand so he could only get R300 000 for it if he were lucky. If the bank repossesses it they will get the same but at least they will be able to create a tax loss.
The same goes for his home which, although modest by ANC cadre standards, would now sell for R1million less than he paid for it four years ago. That means he has negative equity but if the house is repossessed so will the bank have negative equity.
Mr Average can no longer pay his rates bill and he’s not alone. Thousands like him, deprived of the chance to make a living, can also no longer pay their rates, levies, taxes or utility bills. Banks are obviously reluctant to make new loans with so many customers falling behind with repayments so the property market and second hand car market collapse. The new car market will have collapsed already.
Even well run municipalities will be starved of cash and will have to cut back drastically on services. Rubbish may only be collected every three weeks, pot-holes will not be fixed, emergency services will run on the sniff of an oil-rag and vital services like water purification will be neglected. Despite our friend at the Daily Maverick’s protestations, money would come in quite handy now.
But it’s not all bad news. The banking system may have been brought to its knees by bad debt, the currency may be worthless (particularly when the printing presses are going 24/7) and the food supply chain will have dried up leaving empty shelves at supermarkets. After all, what would be the point in producing food for money which has become worthless?
But at least the ground would have been leveled and the construction of a brave new world of socialist Utopia can now be built. With every previously exploited worker paid what he or she is worth.
Quite what they’re going to buy with that worthless money in a society that produces nothing has still to be explained. Maybe our Marxist friends at the Daily Maverick will be able to tell us.
Video: JEWISH POWER: TED PIKE TRIED TO WARN AMERICANS IN 1987, BUT NO ONE LISTENED
Ted Pike did excellent work decades ago. I‘ve watched his videos.
