“This is the first time I have felt anxious about the future,” “We never felt pessimistic, we felt optimistic all along, but now, I feel worried for the first time.” admitted Leon Louw, a prominent anti-apartheid activist and executive director of the South Africa-based Free Market Foundation.
Please see "Further Reading" at the end of this page
How much is a R-billion?
Earning R60,000 per year would take you 16,700 years to earn R1-billion.
The year 2013 ended with the news that South Africa’s state debt was rising alarmingly high. While the debt equalled 27% of the country’s gross national product (GNP) five years ago, it has now risen to 40%.
When SA's debt reaches R1,7-trillion it would mean that each citizen would owe R33,300 without having bought anything, BUT 99% of all taxes are paid by only 3.3 million South Africans.
This means that of the R1,7-trillion, 3,3 million South African tax payers would be responsible for R1 683-billion of that total debt, which means that they would each be responsible for R510,000 of SA's debt.
The SA Rand has been steadily collapsing since this ANC regime was put in power:
SA Rand vs (US)$1.00
1999 R6.11 (double that of 1994)
2001 R13.85 (double that of 1999)
Update: On January 2, 2014 the SA Rand was quoted at R10.6276 against the US dollar. Earlier the day rand hit R10.6398 against US dollar - the Rand's worst level since March 2009.
South Africa’s current-account deficit has widened to 6.8% of GDP, in spite of trying to make it look better by changing the methods of calculating our trade deficit in November this year.
"The question isn't whether or not people need help. It's to what degree the Gov will rob the rest of us to buy their votes." - Andy Wendt
South Africa has deteriorated from 2.6 million people on welfare in 1994 to over 16 million in 2013 (over 31% of SA's 52 million population)
The DA is bragging that 64% of the City of Cape Town's budget is spent on the provision services to the poor – "the greatest cross-subsidisation in the country." This means that the DA is not only admitting to being socialist, but actually bragging about their socialist achievement.
According to figures released by Corruption Watch this year it has been estimated that at least 675 Billion Rand (R 675 000 000 000) has actually been stolen from the citizens of South Africa by way of graft and corruption since the ANC was given control of this country in 1994.
In the meantime, the SA fuel price is set to increase by another 32 to 40 cent in the next week. (Diesel price to increase by 32 cents per litre from Wednesday, 1 January 2014)
After more than a century as the world’s biggest gold producer, South Africa has slumped to sixth position.
South Africa, home to one of the world’s richest reserves, has been hit hard.
Gold’s decline this year is the biggest drop since 1981.
The gold mining industry eliminated 14,461 positions in the first nine months of the year, bringing the total remaining jobs to 126,587 in September, according to Statistics South Africa, the state statistics agency.
The industry has been reeling from labour strikes that have swept the country.
Village Main Reef officials forecast they could keep Blyvooruitzicht mine operating profitably until 2030, if not longer. The company invested 190 million rand ($18 million) in the site, taking operational control in June 2012
Blyvooruitzicht mine lost 90 million rand in the quarter ending June 2013. Village cut its financial assistance on July 30, and a court approved it for provisional liquidation a week later.
"We all know that land reform is one of the trickiest and most emotional issues facing South Africa. If handled badly, it could even create civil war. It could certainly lead to food shortages, prices going through the roof and an increase in food imports we can ill afford." - Clem Sunter
"South Africa’s credit risk is rising relative to emerging-market peers on investor concern the nation may get downgraded as economic growth sputters and borrowing costs increase."
"Moody’s Investors Service and Standard & Poor’s have a negative outlook on the nation’s debt."
"South Africa’s default swaps are the fourth-highest among 25 emerging and major markets monitored by Bloomberg."
"The rand’s 18 percent plunge against the dollar this year, the worst out of 16 major currencies tracked by Bloomberg, is threatening to fuel inflation, reducing the central bank’s room to stimulate the economy."
The SA economy is running below its rather modest potential growth rate of about 3%. It is moreover very difficult to see where the impetus for growth can come from. The weaker foreign exchange value of the rand has added pressure on the prices of goods and services and is reducing the purchasing power of households. This ability to spend is also being undermined by higher administered prices; that is by what should be called higher taxes, in the form of tolls for roads and higher charges for electricity and other municipal services.
This, while South Africans are "overburdened with debt":
"more consumers borrowing money than before, financial advisers and debt counsellors warn that households are overburdened with debt."
"According to the latest Finscope 2013 survey, nearly 20 percent of unsecured loans taken by consumers were for bills, monthly fees or unexpected personal expenses.
It also revealed that nearly a quarter of South Africans were experiencing financial difficulties.
Debt-busters chief executive Ian Wason said the first signs of over-indebtedness were already showing. To date, they had received 80 percent more debt counselling applications compared with the same period last year.
Wason was concerned about the worsening levels of debt and believed the worst was still to come."
Here is an excerpt from the letter that was published on News24:
"Well, you are probably expecting this article to be about Nkandla, or maybe E-tolls, or maybe it is about that sign language interpreter, but in fact there is a bigger trick going on beneath our noses.
So lets start with some basics. Our politicians make promises every election - such as free education, free medical aid etc. Of course, there is no such thing as a free lunch and although we "provide" those services they are really paid for through taxes. Simple enough so far.
We have a R1 trillion annual budget but only generate R750 billion in taxes. So where does the extra cash come from ? Well our government sells "bonds" - a promise to pay someone back with interest at some future date.
In essence the government borrows money from the future to pay for things now - much like we borrow to buy a house. This would be ok if the money raised by those bonds went into assets such as power stations and roads or we were creating new jobs with it.... But let me not become sidetracked too early.
In 2013 South Africa has raised R250 billion in bonds increasing our total debt to R1.2 trillion. The budget plans to borrow an additional R497 billion over the next three years which will increase our debt to R1.7 trillion. How are we going to pay this back ?
Government actually has no intention of paying this back... They can't - they spend more than they earn ... All we plan to do is pay back the interest. And so what happens ? The bonds and loans become due and guess what.... we issue MORE bonds to pay for the old bonds.
Our net debt in 2007/08 was R483 billion... we have TRIPLED it under the current regime to R1.2 trillion and will increase it again to R1.7 trillion over the next three years... think about that.... Borrow R497 billion to pay back R300 billion in interest, and we still have to pay back the principal of R1.7 trillion ! In other words our borrowing has reached the point where the loans are being paid off by more loans.
So what does it all mean ? It means that we are paying taxes to pay interest. And as the interest rises, we pay more and more of our tax money to paying interest. Or put another way, the proportion of our taxes which goes to paying interest is growing all the time. Future generations will have to pay even MORE tax to cover the interest costs.
What it also means is that large amounts of money - interest leaves the country - and does so forever at MUCH greater levels than say e-tolls achieves. And like that family that pays one credit card off with the other, the debt becomes huge. This is how you land up being a Cyprus.
Frankly this interest machine is sheer genius with respect to shifting wealth from the many poor and middle class people of SA to the wealth elite of the world who own the banks who earn the interest. Biggest SCAM ever.
So to all my ANC, DA, EFF, AGANG, the Booi's and Mashilo's and the other political aspirants - what ARE you going to be doing about this ? Your answer SHOULD be what we as a country are talking about and debating .... and SHOULD ultimately be what your vote in 2014 is about.
PS. The government plan is to .... print more money ... and simply devalue everything you earn. To those defenders of the poor, the unions, the politicians and ordinary citizens ... this is why the poor can never earn enough, the reason why petrol is through the roof, and the reason why e-tolls as a new tax form are being implemented."
ToxiNews: South Africa Has Already Crashed
ToxiNews: What went wrong with the New South Africa under the ANC Regime?
ToxiNews: So South Africa is a stable economy built on solid rock is it?
The real cost of graft and corruption to SA's people
No respite with another petrol price hike
The price of petrol will increase by 39c/l, and diesel by 32c/l on 1 January
Can Gordhan cope?
Unsecured loans risky for those in debt
South Africa: Economy - Michigan State University
Trade deficit sky-rockets - 30 November 2004
South African monthly trade deficit hits its highest level in years
South Africa posted a record trade deficit of R5,8-bn for the month of October
South African Trade Deficit Widens - April 1, 2010
File:South African trade balance 1992-2011.svg
Record trade deficit for SA in January - 28 FEB 2013
A statement released by the South African Revenue Service on Thursday said the trade deficit had grown to R24.5-billion last month compared to R2.7-billion in December. It was R21.1-billion in October.
South Africa Trade Deficit Widens to 14.2 Billion Rand - Aug 30, 2013
SA's trade deficit widens to R19bn - Sep 30 2013
15-Nov-2013: Juggling the calculation methods to make things look better
Revision to the calculation of SA’s trade statistics reduces the deficit significantly, the current account should benefit to a lesser extent.
Today the Minister of Finance approved a new calculation method for South Africa’s trade statistics, which materially reduces the trade account deficit, from –R18.9bn in September to –R12.0bn, and the historical data is also revised with the nine month to September now recording a deficit essentially halved to –R64.5bn from R126.4bn.
South Africa’s current-account deficit widens to 6.8% of GDP - 03 DEC 2013
the biggest gap in more than five years. The gap in the current account, the broadest measure of trade in goods and services, grew to an annualised R233-billion
South Africa Balance Of Trade
South African Trade Deficit Mail & Guardian
Gold falls as interest in equities continues to pick up
Gold ticked down on Monday, heading for its biggest annual loss in more than three decades
Mandela'S Legacy: The Freefall Of South Africa
Rapes, murders, disease, corruption, poverty, communism rampant – and maybe genocide
Gold mines now dust as SA jobs vanish
Gold set for biggest yearly loss in 32 years
Land reform: The real deal
SA credit risk rises on downgrade worries
The Hard Number Index: Little holiday cheer - December 10th, 2013
How Can We Think About Really Large Numbers?
South Africa's currency hitting historic lows
Rand's drop in value puts basic goods out of people's reach
A history of South Africa’s currency
BusinessTech looks at the value of the South African currency, and tracks the journey since its debut in 1961.
Please note that this is another typical liberal publication, which is trying to put the blame for everything on "apartheid", e.g. "it was the system of Apartheid in South Africa which ultimately caused rand to lose its footing"
Gold set for biggest yearly loss in 32 years
The Big Mac index
Our lighthearted guide to currencies takes a closer look at the euro area
Big Mac Index 2013
The Big Mac index - 2012
The Big Mac index
Global exchange rates, to go
Big Mac Index (most recent) by country January 12th, 2006.
Incredible: How Much Does Each Man, Woman and Child Owe in the United States?
Trying to make the ANC look good
I'm posting the rubbish below for the sake of interest, to show how liberals are bragging with the New SA based on the achievements of pre-1994 South Africa by tryng to create the impression that the acievements of today are as a result of the ANC, while at the same time blaming all the failures on the old pre-1994 South Africa.
It needs to be pointed out that EVERYTHING that is South Africa today was built before 1994. The ANC regime inherited South Africa, infrastructure, solid economy, industry, science and technology, health care srvices and all. The ONLY achievement of the ANC has been destruction of everything handed to them.
Reasons to be positive about South Africa - Updated 2013