ECONOMIC REALITY – BUDGET 2024 – Interest Rate – Crime Stats – Gardens in SA – ZAR Fx – Bug-Out – Inflation SA – Fly-Tipping - ‘Letter from South Africa’ - [02-24-24]

“(Government) regulation is an imperfect substitute for the accountability, and trust, built into a market in which food producers meet the gaze of eaters and vice versa.” [Michael Pollan]

THE ECONOMICS OF LIVING IN SOUTH AFRICA – “What 10 words best describe our South Africa? I have played with the idea for a month or so. I shall not make false claims about shared pain but shall do my best to connect the dots. Trickle-down is today’s word.” Quoted from Dr Michael Kahn, an independent policy adviser writing in the Daily Maverick.  This is a lightly edited précis of his excellent article.

Yu Hua gained acclaim with his 2011 book China in Ten Words. His 10 words translate as People, Leader, Reading, Writing, (Lu) Xun, Revolution, Disparity, Grassroots, Copycat and Bamboozle.

In his 2011 book, Hua teases out the realities, harshness, and subtleties of life in China. He explains that “it is when the suffering of others becomes part of my experience that I truly know what it is to live and what it is to write” and writes of his pain as he seeks to understand cause and effect.

What 10 words best describe my South Africa? I have chosen some different words from those Michael has published, (see link above), as my perspective is from a British immigrant’s point of view, having lived in Simons Town for more than 10 years; here in no particular order:

1. Rainbow (Nation).  I have always been pleasantly surprised by how the broad spectrum of nationalities, tribes, religions, and classes of people in South Africa live so peacefully together.

2. ID (system). There is no ID system in the UK.  The South African system makes life management simple and easy. I was able to open a new, active bank account in one visit of less than two hours.  In the UK this would take at least a week to complete the security checks.

3. Hygiene (and cleanliness).  “Cleanliness is next to Godliness”.  I stand in awe at the complete lack of litter in malls and highways provided with plenty of litter bins which everyone uses diligently. Constant cleaning in toilets and public areas makes it a joy to shop.

4. Climate. The Western Cape weather is ‘Mediterranean’ with winter rains which offers my ideal climate having spent lots of time in southern France and Spain. With 300 days of sun each year living is easy.

5. Quality (and Pace of Life). I often refer to Simons Town as “millionaires row without the millions” and many locals speak of living in a bubble – paradise by any other name.  I point to the relaxed pace of life being slower than mañana which I call Cape-time.

6. Smiles (and lots of Laughing).  The happiness and joy I see in everyone is a direct contrast to miserable Britain.  It reminds me of Southern Europe; the sun must influence positive psychic energy spreading goodwill and love all around.  Sunny days allow people to live outside in the fresh, clean air and encourage good social interactions.

7. Family (Strong Bonds).  The history of South Africa encourages strong families, disciplined behaviours, and confident social order. At least thirty-five languages, indigenous to South Africa, are spoken in the Republic, twelve of which are the official languages of South Africa: Ndebele, Pedi, Sotho, South African Sign Language, Swazi, Tsonga, Tswana, Venda, Xhosa, Zulu, Afrikaans and English, which is the primary language used in parliamentary and state discourse, though all official languages are equal in legal status.

8. The rand.  I have written, under the subheading ‘Inflation’ below, why the rand is weak which is a result of unfavourable investor opinions being influenced by load-shedding.  I expect this to correct in the coming years as public/private partnerships counter the failings of Eskom.

9. Resources.  South Africa is blessed with massive, untapped minerals, energy, and environmental resources which classifies the country as ‘developing.’  As a founding member of the BRICS, South Africa rightly claims Global South partners who offer a secure umbrella of protection against the predations of the colonial Anglosphere (Collective West).

10. Constitution (and strong Legal System). South Africa has created a strong constitution which will prove its worth in the years ahead when challenges appear from those wishing to upend it. On the international scene South Africa has recently invoked the ICC to bring Israel to justice regarding the Gaza abomination. The ICC is a court of last resort that investigates and tries individuals charged with the gravest crimes of concern to the international community, such as genocide, war crimes, crimes against humanity, and aggression. An effective Legal System was proven last year when the SA Supreme Court ruled that the government must release an unredacted copy of their Pfizer COVID-19 vaccine contract. South Africa was the first country to achieve this and illustrates transparency and justice within government circles.

I can think of many more words to describe all the good things about South Africa in general and Simons Town in particular which I wrote about in the last issue HERE.

SOUTH AFRICA BUDGET 2024

Source

• Budget in a Nutshell  https://businesstech.co.za/news/budget-speech/753819/2024-budget-in-a-nutshell-the-biggest-winners-and-losers/?utm_source=everlytic&utm_medium=newsletter&utm_campaign=businesstech

The National Treasury is setting aside as R72bn to keep the R350/month SRD grant going into 2027 maybe even longer.  The economic downturn in South Africa has led to a significant decline in tax revenue collection for 2023/24, which is R56bn lower than estimated in the 2023 Budget.

The implementation of a ‘two-pot’ retirement system is expected to raise a one-time estimated amount of R5bn in tax revenue for 2024/25.  South Africa's rooftop solar tax break is gone with households having a week to close a deal.

Finance Minister Enoch Godongwana has given relief to cash-strapped consumers in South Africa with the General Fuel Levy (18%) and RAF (c10%) remaining the same as in 2024.  The Western Cape is well on the way to see the back of load-shedding within three years thanks to private enterprise and the ruling DA initiatives.  With no new bailouts in hand, the Finance Minister announced that third parties will soon be able to access Transnet’s embattled rail network.

Transnet’s many struggles on its rail network and ports have been highlighted by many industries, ranging from retailers who can’t access their stock to mining companies who can’t export their goods.  These transport issues saw South Africa record historically low coal and iron-ore exports in 2023, quoted by the consultancy research group GAIN saying that the problems in Transnet Freight Rail (TFR) led to a projected loss of R353bn (4.9% of GDP) in 2023.

The Cabinet approved the ‘Freight Logistics Roadmap’ in December 2023 to address the nation’s increasingly unreliable logistics system.  The Roadmap outlines plans for immediate ways to improve port equipment, locomotive availability and network security.  It also creates a clear path for improving efficiencies, facilitating the opening of competition and leveraging the financial and technical support of the private sector. “In this regard, third-party access to the freight rail network will be introduced by May 2024,” the minister said.

Private-public partnerships have already been secured to upgrade Pier 2 of the Durban Container Terminal, which the minister said improves private investment in equipment and enhances technological capability and operational efficiency.

Despite expectations that the minister would announce further financial support, i.e. a bailout for Transnet, he alluded to the R47bn guarantee facility that the SOE was given last year as part of its recovery plan and to meet its immediate debt obligations.

Like Eskom, the guarantee comes with conditions. These conditions require Transnet to focus on its core activities, and for the entity to introduce private sector partnerships. This will improve Transnet’s sustainability and support the implementation of the Roadmap.

Economists at the ‘Bureau for Economic Research’ said that the SOE needs to raise a larger capital injection as it has failed to generate enough operational revenue to service its R130bn debt pile.

PERSONAL TAXATION - Finance minister, Enoch Godongwana outlined the new tax brackets for personal income taxpayers in his Budget speech 2024 on Wednesday, February 21, 2024.  The minister said that the budget proposes tax increases totalling R15bn for the 2024/25 fiscal year to alleviate “immediate pressures” on the budget.

There are no inflation adjustments to the personal income tax tables and medical tax credits for the year.  Medical tax rebates will be the same as in 2023 at R364 for members, R364 for the first dependent, and R246 for every subsequent dependent.

Tax brackets are not being adjusted for inflation, South Africans’ salary increases this year will pay more tax, or even be pushed into a higher tax bracket.  The minister must have learned this from the UK stealth taxation system announced last year. The table below shows the personal income tax rates for 2024/25, as well as the rebates and thresholds.

However, the Treasury will be increasing other taxes to increase revenue, including excise duties on alcohol between 6.7% and 7.2%, while duties on tobacco products will increase between 4.7% and 8.2%.

Godongwana also announced that South Africa will implement a global minimum corporate tax effective September 1, 2024, which will see multinationals earning more than €750 million a year pay an effective tax rate of a minimum of 15%, regardless of where their profits are located.

Godongwana said that the poor performance of South Africa’s economy has resulted in a sharp decline in tax collections for 2023/24, with R1.73tn of tax revenue in 2023/24, R56bn lower than estimated.  The shortfall was due to a fall in corporate profits and revenue from taxes on mining.  However, over the medium term, revenue projections are R45bn higher than the 2023 MTBPS estimates following improved personal income tax and additional medium-term revenue proposals.

The budget contains several measures to raise R15bn in 2024/25 to alleviate immediate fiscal pressure and support faster debt stabilisation, mainly by holding personal income tax brackets, rebates and medical tax credit for inflation.  Treasury announced additional tax hikes for plastic bags and incandescent lightbulbs.  The government proposes to increase the plastic bag levy from 28c/bag to 32c/bag from 1 April 2024.

To encourage the uptake of more efficient lighting such as light-emitting diode (LED) bulbs and reduce electricity demand, Treasury proposes to raise the incandescent light bulb levy from R15 to R20 per luminaire from April 1, 2024.  “This complements the phase-out of inefficient light bulbs and promotes compliance with the new energy efficiency standards published in May 2023 by the Department of Trade, Industry and Competition,” they said.

STOP PRESS – INTEREST RATE

This is another blow for interest rates in South Africa.  According to Investec chief economist Annabel Bishop, the FOMC minutes release caused some consternation for the rand, even after the better-than-expected 2024 Budget brought some relief and strength to the local unit.

The rand then strengthened to R18.77/$ following the Budget but then quickly retreated closer to R19.00/$ after minutes from the US Federal Reserve FOMC’s January meeting showed that US interest rate cuts are not imminent thus strengthening the dollar.  The first SA interest rate cut will be after the US begins its interest rate cut cycle, and if US rate cuts are delayed, so will South Africa’s in Q3-24 Source

• Bad news for interest rates as hawks circle the Reserve Bank https://businesstech.co.za/news/finance/754227/another-blow-for-interest-rates-in-south-africa/?utm_source=everlytic&utm_medium=newsletter&utm_campaign=businesstech

NEWS FLASH – CRIME in FOCUS

In the UK the rate of homicide in the population for the year ending June 2023 remained low at 10 per 1 million people compared to South Africa with 626 per million people. Source

• 84 people are murdered every day in South Africa- these are the most dangerous areas https://businesstech.co.za/news/government/752495/84-people-murdered-every-day-in-south-africa-these-are-the-most-dangerous-areas/?utm_source=everlytic&utm_medium=newsletter&utm_campaign=businesstech

FUN TIDBIT - Relax and enjoy the sound of the sea which we have here every day.

THOUGHT FOR THE WEEK

In South Africa, many grow their own food but is this what the Globalists want? From Brandon Smith:  If you think the war on farming, raging right now in Europe, is only intended to affect industrial farms, think again.  The establishment is going to try to use their man-made climate change PsyOp to dictate ALL food production, right down to an unassuming backyard garden.  And they won’t limit their efforts to the EU/UK/USA either; they will come after all Western farms with the same restrictions.

This is really what the globalist “net zero” programs and 15-minute cities are all about.  They are based on the idea that all human activity needs to be monitored and managed. They say it’s for the good of the planet, but the systems they want to put in place from 2030-50 look like a new digital feudalism; a society where bureaucracies track & trace, and micromanage every aspect of life. The elites benefit while never having to prove that carbon emissions are a real danger to human life.

Why do they focus on food?  Because if people have their own food supply they might be more willing to rebel against other mandates. It’s really that simple. The end game is obvious: “Control the food, and you control the world”.   If they do it in the name of ‘saving the planet’ then a lot of people will even thank them as they starve to death. Source

• Carbon controls PsyOp  https://www.lewrockwell.com/2024/02/brandon-smith/globalists-will-use-carbon-controls-to-stop-you-from-growing-your-own-food/

BREAKING SOUTH AFRICAN NEWS – MONEY – SA rand

The rand is undervalued, but by how much?  This is the ‘real’ value of the rand in 2024 according to the Big Mac Index. 

HOWEVER, WHAT IS HAPPENING in the rest of the world?  Take the UK as an example. Is it the bastion of privilege and fortune that we are led to believe? – think again. UK middle classes are ‘struggling despite incomes of up to £60,000 a year’ (1.4 million rand).  Insecure jobs and high housing costs make it hard to maintain decent living standards, says the ‘Financial Fairness Trust’   Source

• Britain’s insecure jobs market and high housing costs are leading to the growth of a precarious middle-class  https://www.theguardian.com/business/2024/feb/20/uk-middle-classes-jobs-housing-costs-abrdn-financial-fairness-trust?utm_term=65d457c34e8cacc32b990ff6b5b89dce&utm_campaign=BusinessToday&utm_source=esp&utm_medium=Email&CMP=bustoday_email

SURVIVAL MONITOR – BUG-OUT

I read recently that the Brits are taking cheap flights to Agadir (Morocco) because it has 300 days of sunshine per year.  There are many reasons why I chose to return to Cape Town and all of them are to do with ‘Protect & Survive’, especially about things I can’t change, like the climate, so I did some research.

The sun in Cape Town shines bright and warm for about 7.5-9.5 hours a day, with around 300 days of sunshine per year, making it perfect for outdoor activities like beach trips, braais, hikes, sports (water, wind, air, and land), and sightseeing throughout the year.  This is the weather summary in Cape Town (max/min) for climate, seasons, and average monthly temperatures:

• Hottest Month: February (22C)

• Coldest Month: July (13C)

• Wettest Month: June (4.7cms)

• Windiest Month: January (24km)

• Best Month for Swimming: February (20C)

Sources

• Sunshine  https://weather-and-climate.com/average-monthly-hours-Sunshine,Cape_Town,South-Africa

• Weather  https://www.capetown.travel/plan-your-trip/weather-in-cape-town/

• Moving overseas  https://www.movehub.com/uk/moving-abroad/south-africa/ 

But when the SHTF, Where is the best place to live in the US during and after the apocalypse?  While trying to figure out the answer, I’ve looked inside prepping blogs to find a consensus for the criteria known to be essential for any place to survive during the wake of such an event.

Any event that can potentially destabilise society from the point of no return to ‘normal’.  It is important to have whatever supplies are needed, ready in advance, before travelling to the bug-out destination.  The criteria for the best place to survive may be summarised in three categories:

Human Factors:

• Low population density (40 people per sq. mile or less)

• Distance to major/minor cities (50+ miles away)

• Distance to military bases (50+ miles away)

• Distance to nuclear power plants (100+ miles away)

• Distance to major highways

• Low poverty rate

• Low violent crime rate

Natural Factors:

• Easy access to fresh water

• Abundance of wild game

• Low natural disaster risk

• Dense forest cover

• Adequate soil textures

• Adequate rainfall

• Low drought risk

• Economic Factors:

• Economically active local community

• Abundance of renewable natural resources and other essential raw materials for extraction such as coal, oil, natural gas, metals, minerals, and wood.

• Numerate, literate, and craft-skilled neighbours

One of the best models to follow for a local, healthy, and self-sustainable economy is the Amish community in America.

This is a giant subject which is why my book, The Financial Jigsaw – Part 2 is being serialised HERE.  Sources

• When The Meds Run Out: Dealing with a society in withdrawal and finding alternatives to popular medications now & for SHTF

• The Home Doctor - Practical Medicine for Every Household  https://homedoctorguide.com/book/?hop=est22&hopId=dd345c52-c74b-416b-b976-e4b31421480d

• Learn how to live without electricity from the Amish community  https://www.naturalnews.com/2022-12-24-learn-to-live-without-electricity-from-amish.html

• BUG-OUT Guide  https://preppgroup.home.blog/2024/02/12/where-to-go-during-the-collapse-the-best-places-in-america-to-go-during-an-apocalypse-this-article-illustrates-each-place-with-a-detailed-image/

INFLATION MONITOR

South Africa's annual inflation rate rose to 5.3% in January 2024, up from December's 5.1% and compared with market forecasts of 5.4%, moving away from the South African Reserve Bank's preferred 4.5% midpoint of the 3–6% target range. Sources

• A silver lining for household spending in South Africa  https://businesstech.co.za/news/finance/747812/silver-lining-for-household-spending-in-south-africa/?utm_source=everlytic&utm_medium=newsletter&utm_campaign=businesstech

• SA Budget week – minimum wages  https://businesstech.co.za/news/wp-content/uploads/2024/02/minimum-wage.pdf

NARRATIVE BATTLE

Ninety-one percent of the world’s population lives in the northern hemisphere with most crammed into mega-cities.  When any living thing has limited living space, aberrant behaviour emerges which is negative for those seeking a quiet, clean, and calm life.

The UK is one of the most densely populated countries in the world and is filthy by any standard of civilised hygiene.  “Aaron Bastini wants a radical clean-up on the streets of Britain, saying small businesses have suffered as a result of the scourge of litter and graffiti.” Pictured above is a typical fly-tip in Britain. Fly-tippers were caught red-handed by 'quick-thinking' locals who 'trapped' them!

Extract by Michael Snyder in America: “In recent years, “van life’, “car life” and “tiny homes” have all become hot topics on social media.  Millennials and Generation Z have been particularly eager to try out these “minimalist” lifestyles.  At a time when home prices have risen to absurd levels and the cost of living has become exceedingly oppressive, it can be very tempting to adopt a low-cost way of life.

But it’s also important to understand that the elite are encouraging these trends.  If they could get most of us happily living in tiny homes with electric vehicles, they would have achieved one of their objectives which is 15-minute cities.  “Very soon,” says Katie Hopkins, “you will have only 15 minutes of freedom here in the UK.”

Millions of people in the Collective West cannot afford normal homes, especially the younger ones, so many are choosing “tiny homes” or living with parents/sharing with others in an HMO.   A “tiny home” can be anywhere from 100 to 400 square feet, and today Airbnb has tens of thousands of them.  Source

• “You Will Live in Tiny Homes and Electric Vehicles and be Happy”. This Is The Future They Have Planned For Us, (Not for them of course)  https://www.activistpost.com/2024/02/you-will-live-in-tiny-homes-and-electric-vehicles-and-be-happy-this-is-the-future-they-have-planned-for-us.html?utm_source=substack&utm_medium=email

FINALLY

COMING NEXT:

• BOOM Weekly Global Review - Tuesday, February 27, 2024

• The Financial Jigsaw Part 2 - Chapter 4 – Personal Transformation – Saturday, March 2, 2024

• Letter from Great Britain - Farmers Revolt - Saturday, March 9, 2024

REFERENCES 

• My Book: “The Financial Jigsaw” Parts 1 & 2 Scroll:   https://www.researchgate.net/publication/358117070_THE_FINANCIAL_JIGSAW_-_PART_1_-_4th_Edition_2020   including regular updates.

• BOOM Finance and Economics Substack (Subscribe for Free) - also on LinkedIn and WordPress. Plus Covid Medical News Network CMN News  and BOOM Blog -- All Editorials (over 5 years) --  BOOM Finance and Economics | Designed for Critical Thinkers — UPDATED WEEKLY (wordpress.com)