A Matter of Time

The International Monetary Fund should not be blamed for missing warning signs of the financial crisis because the United States rejected a banking regulatory and oversight method the Fund had suggested, IMF chief Dominique Strauss-Kahn said on Thursday.

Strauss-Kahn said most European countries had adopted measures spelled out in the Financial Sector Assessment Program, which was introduced in 1999 as a means to promote sound financial systems. The FSAP requires that a team of experts perform detailed assessments of the financial sector.

Reuters | U.S.rejected IMF's banking supervision: IMF chief [April 10, 2008]

Given the above, freely available through the MSM and on the Web, I'm a bit perplexed by the prominence given the U.S. FSAP to be undertaken as soon as George W. Bush flees Washington D.C.

"... to imagine the IMF investigating the US financial system is unthinkable, or was. But, at the weekend, Der Spiegel reported that the IMF would conduct a full investigation into virtually every aspect of it."

"Der Spiegel wrote that the IMF had "informed" Federal Reserve chairman Ben Bernanke of plans that would have been unheard of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program is to be carried out in the US.

"This, Der Spiegel wrote, '... is nothing less than an X-ray of the entire US financial system', adding that 'no Fed chief in US history has been forced to submit to the kind of humiliation that Ben Bernanke is facing'."

The Age | IMF finally knocks on Uncle Sam's door

Let Der Spiegel — which, at the time of Strauss-Kahn's April speech, took one look at the U.S. economy and ran with The Madness of Ben Bernanke, continue today's story:

"For seven years, US President George W. Bush refused to allow the IMF to conduct its assessment. Even now, he has only given the IMF board his consent under one important condition. The review can begin in Bush's last year in office, but it may not be completed until he has left the White House. This is bad news for the Fed chairman.

"When the final report on the risks of the US financial system is released in 2010 — and it is likely to cause a stir internationally — only one of the people in positions of responsibility today will still be in office: Ben Bernanke."

Der Spiegel | The Shrinking Influence of the US Federal Reserve

That about sums it up. By 2010, the horse will have bolted and the fat will have made the leap to the fire. We will all be Americans then.

Besides, surely no-one in their right mind expects the IMF, which adopts a peculiarly servile and obsequiously beseeching tone when addressing the U.S., to investigate, pronounce, and act on a global Ponzi scheme in which the Fund and its partners knowingly participate?

Eh?


SS Thomas T Tucker [Click pic to enlarge]

As the Roman Empire polarized, the economy and its political wrapping were beyond saving. All that Christianity was able to do was provide charity on an individual basis. It could deal only with symptoms, not root causes. When the point has been reached where you can deal only with people who have slipped through the cracks, the long-term game is lost.

Michael Hudson | We're Entering a Two Economy Society

What is interesting is that until a few weeks ago the United States refused to have the FSAP in their country.

IMF Managing Director Dominique Strauss-Kahn [April 10, 2008]

Zimbabwe's Ruins

Zimbabwe Bateleur — near Soetwater refugee camp, Cape Town

Ramped up pressure from the West, especially the U.S. and Britain, is having a perverse effect on African leaders gathered in Egypt. The harder the West leans, the more they circle the wagons around Zimbabwe's Robert Mugabe.

Mugabe feels so comfortable among peers at the African Union summit at Sharm El-Sheikh that his spokesman Monday told critics to "go hang", and his bodyguards shoved a British reporter asking pesky questions to the 84-year-old leader.

Thus far most African heads of state attending the meeting have remained mum, at least in public, about Mugabe's re-election, which Washington calls a "sham" and the AU's own election monitors have criticised sharply.

Inter Press Service | Dim Outlook for Power-Sharing Deal

And so it goes... As noted here on April 1, "Whatever the outcome of this election — and Mugabe will not step down lightly, Zimbabwe and its people face extremely tough times. For South Africans or Americans — or any so-called democratic nation to decry Zanu-PF's electoral chicanery is duplicitous at best and potentially lethal at worst."

Indeed. But that did not stop them. Nor did I expect it to. Three months down the road, media pundits, millions of refugees, sundry bloggers, and just about everybody else under the sun continues to put forward their recipe for lasting peace, justice, and harmony in Zimbabwe.

Ho ho ho.

I blame George W Bush, but what would I know? Sadly, Joshua Hammer's The Reign of Thuggery accurately reflects the "logic of pre-emption" employed at every level north of our border.

Those who took flight to land as broken birds in South Africa need our assistance now, more than ever. It's imperative, if we're to avoid further complicity in Mugabe's crimes against humanity, that our government stops deporting refugees immediately.

The international medical humanitarian organisation Médecins Sans Frontières (MSF) today expressed alarm at the deportation of approximately 500 Zimbabweans, including women and children, from a detention centre in Musina, at the border with Zimbabwe. South African authorities in Musina told MSF that they had increased patrols along the border during the run-off period. Zimbabweans arrested during these patrols told MSF teams that they had crossed the border over the past few days, fleeing instability and political violence in their country.

[... ]

The authorities confirmed that all Zimbabweans in the centre had been transported back across the border. Hundreds of people have been sent back into the country from which they fled, without any recognition of their right to seek asylum,” says Rachel Cohen, head of mission for MSF in South Africa. “Deportations happen everyday in South Africa but had apparently been halted yesterday on the occasion of the electoral run-off in Zimbabwe. We are shocked to find that the authorities are resuming this unacceptable practice, in violation of international as well as South African law, which guarantee the right to seek asylum and to access assistance.”

eMzantsi Ubuntu Coalition | MSF Calls Upon South African Authorities to Immediately Stop Deportation of Zimbabweans

Leave the preemptive logic and Bush Doctrine to those who think they can afford them. With petrol now at US$5.12 per US gallon, we certainly can't.

Apartheid's Printers Punt Mugabe's Power Putsch

On the local front, Mandy de Waal finds apartheid's former printers (Nasionale Pers) pocketing R2.6 million to promote Robert Mugabe's Zanu-PF in a deal brokered by controversial South African Premier Soccer League (PSL) marketer, Peter "Kickback" Mancer.

This deliciously ironic twist in the tragic tale of Zimbabwe's descent to genocide came as former National Party president F.W. de Klerk once again tottered into the limelight. "Mugabe needs to be toppled," opined our last apartheid president and Nobel laureate of the former Sir Bob before a Cape Town Press Club function.

It goes to show that if you say it often enough for long enough, you'll one day hit the nail on the head. Naspers, however, couldn't have got it more wrong.

In a week when Naspers (JSE: NPN) should be celebrating buoyant financial results, the multinational media company faces a reputation scandal that sees it linked by a trail of blood money to Robert Mubabe's terror-filled tyranny. This after Naspers subsidiary, Paarl Web Gauteng, printed 130 tons of propaganda, worth R2,6m, for Zanu-PF.

Amidst strong media interest and growing public anger, journalists and staffers at the organization petitioned Chairman Ton Vosloo to donate all revenue received from the contract to Zimbabwe relief organizations. Naspers' owned Fin24.com reported yesterday that the petition reads: "...we believe that the acceptance of the Zanu-PF contract constitutes, at the very least, a very serious lack of judgment and we would hope that Naspers, as the parent company of Paarl Web, would acknowledge this. We therefore believe it appropriate that the R3m that Paarl Web apparently received for this contract be given to organisations which aims to alleviate the plight of the people of Zimbabwe."

MoneyWeb | Mugabe’s man unmasked

Naspers lickspittle and Paarl Web CEO Stephen van der Walt says Chairman Vosloo is prepared to donate only "...R250k to R350k to a suitable fund."

Grace Mugabe's Children's Fund?

De Waal reports Paarl Web, which printed Mugabe's election material, to be "[t]he product of a BEE partnership between Paarl Media Group and loveLife!'s Kurisani Investments, Paarl Web's stakeholders include the US-based Henry J. Kaiser Family Foundation and the South African Government, while the printer's BEE partners receive their major funding from the Kaiser Family Foundation and the Bill & Melinda Gates Foundation.

For the story behind the deal, read De Waal's scoop, Naspers and the trail of Mugabe’s blood money. It seems CTP Caxton, also approached by the Zimbabwe Central Bank, was saved by a leader of impeccable reputation and high principle, Frederick van Zyl Slabbert.

Van Zyl Slabbert, a former leader of the white opposition to De Klerk's National Party, threatened to resign should his company touch the deal. Paarl Web's Stephen van der Walt says he was unaware of its nature. In one way or another, I've worked in publishing for 25 years and given the evidence to hand, I'd call Van der Walt a bare-faced liar and a conscienceless money-grubber. It's his job to be aware of these things...

At least Zimbabwe is keeping our airwaves buzzing. Mugabe's obliteration of that once beautiful country makes those of us clinging to the southern tip feel righteous, good, and just. Despite Aden Thomas's good work broadcasting from Blue Waters Safety Site, it also obviates the need for us to do anything to prepare for the fresh flood of refugees now pouring into our towns and cities.

Boasting a successful "reintegration programme", Western Cape premier Ebrahim Rasool this morning failed to mention the hordes of hungry foreigners filling every dark nook and cold cranny of the central city. Many will find work and eke out meagre futures. However, most will merely swell the ranks of our army of dispossessed.

But hey, we needn't do a damned thing about or for them. Next to Bob, we're saints.

Internationally, Mike Whitney continues to follow the money trail...

There is no oil shortage, not yet at least. That doesn't mean we're not quickly sliding towards Peak Oil. We probably are, but that has nothing to do with today's gas prices. The reason oil has skyrocketed to nearly $140 per barrel is because of speculation; rampant, "unregulated" speculation. The peak oil doom-sayers are simply confusing the issue. This is not about shortages or scarcity; it's about gaming the system to fatten the bottom line. The whole scam is being executed with excruciating precision by the same carpetbagging scoundrels who engineered the subprime fiasco; the investment bankers. The Wall Street Goliaths are using the futures market to recapitalize their flagging balance sheets after sustaining massive losses in the mortgage-backed securities boondoggle. That's the whole thing in a nutshell. Now they're on to their next swindle; distorting the futures market with humongous leveraged bets on food and oil.

Mike Whitney | Gas-Pump Gouging; Just Don't Blame The Saudis

Note:   Some good news. With interest rates, inflation, and the cost of food, utilities, and everything else headed for the stratosphere (and the global economy for some Black Hole in the U.S. Federal Reserve), those exploiting what little money we do have might find their avaricious appetites summarily curtailed.

The Executive Overview of the Banking Enquiry of the Competition Commission of South Africa [pdf] released earlier today makes 28 practicable recommendations. Read the overview (or the more accessible press release [doc]) and overcome that feeling of being mugged every time you go to the ATM.

Unless, of course, you are being mugged — an event probably now as inevitable as exorbitant (read "usurious", "extortionist", etc.) bank charges. Alternatively, the Reserve Bank might just bury the Report as it does us.

On the beat?   And I guess this is not making much of a splash because... well, hundreds of security forces facing off against each other in a deadly central-city rush-hour gun battle is perhaps not that newsworthy in this neck of the woods.

Protesting Metro police caused chaos yesterday when they sealed-off the Johannesburg CBD, preventing thousands of motorists from leaving the city centre and sparking a deadly clash with the South African Police Service.

[...]

The violence may have resulted in the death of one metro officer, but the SAPS were unable to confirm this last night. Seven metro officers were injured. The clash came after hundreds of metro policemen, in full uniform, blocked access to highway on-ramps and off-ramps ringing the city last night, in protest over a salary dispute with their employer.

SAPS officers fired rubber bullets to disperse their unruly metro colleagues, said spokesman Supertintendent Eugene Opperman. He said the metro officers returned fire with live ammunition. The police are now investigating cases of attempted murder against the metro police officers.

Terrified motorists told The Times how officers had threatened motorists and brought traffic to a standstill. At some intersections, officers used concrete bins to block the path of motorists trying to make their way home. The situation had quietened by late last night, but was still tense.

The Times | SAPS and metro cops exchange fire — one dead

You'd think they had nothing better to do...

Twenty Years Ago today...

It was twenty years ago today, | That Sgt. Pepper taught the band to play | They've been going in and out of style | But they're guaranteed to raise a smile.

This year marks the 20th anniversary of the Battle of Cuito Cuanavale, a heroic struggle in which, between October 1987 and June 1988, in some of the fiercest fighting in Africa since the Second World War, the South African Defence Force (SADF) were humiliatingly defeated by liberation forces in Angola.

Cuban assistance to Angolan resistance to the SADF invasion was vital. Defeat at Cuito Cuanavale spelled the doom of apartheid and the victory of the South African liberation movement.

Former Cuban president Fidel Castro famously observed that “the history of Africa will be written as before and after Cuito Cuanavale”. In South Africa’s Freedom Park, outside Pretoria, 2070 names of Cubans who fell in Angola are inscribed alongside those of South Africans who died during the anti-apartheid struggle.

Barry Healy | Cuito Cuanavale: How Cuba fought for Africa’s freedom

Twenty years after the battles of Cuito Cuanavale the region of Southern Africa has not recovered from this period of massive social, economic, political and military dislocations. Yet the foreign policy of the South African state is to promote the same capitalist companies that profited from destabilization. South African corporations now dominate Southern region, except in Angola.

Horace Campbell | Cuito Cuanavale

I must say, it's grand to find a good old, unapologetically socialist publication on the Web. It's better finding two. And yes, countering the narratives of those who insist on painting their war 'glorious', 'righteous', and 'just', it's equally heartening to find the rout of the SADF from Cuito Canavale, Angola, and the subregion remembered by such publications some twenty years down history's rough-hewn, oft-forgotten, and frequently ill-charted trail.

Hey, let's go even further...

For Africa to develop, it needs a new type of democracy — one that will empower private sector producers, not just the political elites. First, the peasants must become the real owners of their primary asset, land. This is the only way towards the environmental improvement, as opposed to the current trend of rampant deforestation and desertification. To do this, freehold must be introduced and the so-called communal land tenure system, that in reality is state land ownership, must be abolished.

Moeletsi Mbeki | Realizing the Potential For Profitable Investment in Africa

More of the same? Nah... Thabo's brother has his head screwed on just right.



So may I introduce to you | The act you've known for all these years, | Sgt. Pepper's Lonely Hearts Club Band.

And while we're hanging about 1988, let's remember he said it. While South Africans and the world were generally lost inside insular or parochial self-interest — and a hell of a long time before Al Gore decided it was a good gig, a lone but respected voice was crying for the wilderness...

"The observed warming during the past 30 years, which is the period when we have accurate measurements of atmospheric composition, is shown by the heavy black line in this graph. The warming is almost 0.4 degrees Centigrade by 1987 relative to climatology, which is defined as the 30 year mean, 1950 to 1980 and, in fact, the warming is more than 0.4 degrees Centigrade in 1988. The probability of a chance warming of that magnitude is about 1 percent. So, with 99 percent confidence we can state that the warming during this time period is a real warming trend."

[...]

"My last viewgraph shows global maps of temperature anomalies for a particular month, July, for several different years between 1986 and 2029, as computed with our global climate model for the intermediate trace gas scenario B. As shown by the graphs on the left where yellow and red colors represent areas that are warmer than climatology and blue areas represent areas that are colder than climatology, at the present time in the 1980s the greenhouse warming is smaller than the natural variability of the local temperature. so, in any given month, there is almost as much area that is cooler than normal as there is area warmer than normal. A few decades in the future, as shown on the right, it is warm almost everywhere."

James E. Hansen | The Greenhouse Effect: Impacts on Current Global Temperature and Regional Heat Waves

Twenty years later...

"James Hansen, one of the world's leading climate scientists, will today call for the chief executives of large fossil fuel companies to be put on trial for high crimes against humanity and nature, accusing them of actively spreading doubt about global warming in the same way that tobacco companies blurred the links between smoking and cancer.

"Hansen will use the symbolically charged 20th anniversary of his groundbreaking speech (pdf) to the US Congress - in which he was among the first to sound the alarm over the reality of global warming - to argue that radical steps need to be taken immediately if the "perfect storm" of irreversible climate change is not to become inevitable."

[...]

"His sharpest words are reserved for the special interests he blames for public confusion about the nature of the global warming threat. "The problem is not political will, it's the alligator shoes - the lobbyists. It's the fact that money talks in Washington, and that democracy is not working the way it's intended to work."

Guardian | Put oil firm chiefs on trial, says leading climate change scientist



We're Sgt. Pepper's Lonely Hearts Club Band, | We hope you will enjoy the show,

Earlier today...

"My presentation today is exactly 20 years after my 23 June 1988 testimony to Congress, which alerted the public that global warming was underway. There are striking similarities between then and now, but one big difference.

"Again a wide gap has developed between what is understood about global warming by the relevant scientific community and what is known by policymakers and the public. Now, as then, frank assessment of scientific data yields conclusions that are shocking to the body politic. Now, as then, I can assert that these conclusions have a certainty exceeding 99 percent.

"The difference is that now we have used up all slack in the schedule for actions needed to defuse the global warming time bomb. The next President and Congress must define a course next year in which the United States exerts leadership commensurate with our responsibility for the present dangerous situation."

[...]

"The disturbing conclusion, documented in a paper I have written with several of the world’s leading climate experts, is that the safe level of atmospheric carbon dioxide is no more than 350 ppm (parts per million) and it may be less. Carbon dioxide amount is already 385 ppm and rising about 2 ppm per year. Stunning corollary: the oft-stated goal to keep global warming less than two degrees Celsius (3.6 degrees Fahrenheit) is a recipe for global disaster, not salvation.

"These conclusions are based on paleoclimate data showing how the Earth responded to past levels of greenhouse gases and on observations showing how the world is responding to today’s carbon dioxide amount. The consequences of continued increase of greenhouse gases extend far beyond extermination of species and future sea level rise."

James E. Hansen | Global Warming Twenty Years Later: Tipping Points Near

We're Sgt. Pepper's Lonely Hearts Club Band, | Sit back and let the evening go.

The Beatles | Sgt. Pepper's Lonely Hearts Club Band

See also:

• Guardian | Climate change: 'We had better get something done next year, or else'
• James Hansen | Twenty years later: tipping points near on global warming
• James Hansen et al | Target Atmospheric CO2: Where Should Humanity Aim?

The Perfect Storm

“Capitalism breeds great inequality that is destructive, unless tempered by an intuition for equality, which is the heart of democracy. When the state becomes the guardian of power and privilege to the neglect of justice for the people who have neither power nor privilege, you can no longer claim to have a representative government.“

Bill Moyers | Democracy Only Works When Ordinary People Claim It as Their Own

But the real problem goes beyond Wall Street’s exotic debt-instruments or the Federal Reserves low interest funny-money. Overcapacity is the result of slacking demand which naturally arises when workers wages stagnate as they have for the last 30 years. When that happens, the only way the economy can grow is by easing lending standards and expanding credit. That’s why Greenspan and his fellows were so enthusiastic about all the complex derivatives and shaky subprime mortgages; it all fit with their class-based view that wages must remain low (to fight inflation) while debt is expanded ad infinitum. This is the blueprint for the New Economy that Maestro touted. While banks were keeping less than $1 dollar in capital for every $10 they lent to mortgage applicants; the investment banks and hedge funds were amplifying that debt many times over by taking those dodgy mortgages and borrowing 20 to 30 times the value of the underlying asset to maximize their profits. Then trillions of dollars in credit default swaps were used as a way to hedge against possible default on the over-inflated bonds. Voila; the biggest equity bubble in history created by some of the smartest guys on Wall Street.

Now the underlying collateral (housing) is quickly deteriorating causing a system-wide deleveraging and a flight to safety (US Treasuries, foreign bonds). The dollar is in free fall, credit is tightening, and the banks are only able to stay open due to the generosity of the Federal Reserve.

Mike Whitney | Down For The Count



The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us — be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets. Such a slide on world bourses would amount to one of the worst bear markets over the last century. RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.

Telegraph | RBS issues global stock and credit crash alert



Then this morning, the margin clerks of the world go to work and oil spikes as the pits smell blood. Morgan Stanley issues a call for $150 oil in July. The euro rises to $1.5778! Interest rates drop. The stock market falls large at the open.

And rumors of an attack on Iran? An Israeli politician says that Israel would need to bomb Iran to keep them from getting a nuclear weapon, just as it becomes clear Obama might be the next president and would not act to prevent such a problem?

Who can aggressively short in this environment? In a conversation with Dennis Gartman this afternoon, he commented that it felt like the NASDAQ. But is it 1999 or 2000? The oil market will continue to go up until it doesn't, and no one knows when that is. It will continue to rise until all the shorts that are not strong hands have been covered. The margin clerks are in control, and they will have their way. Was it all over today? I rather doubt it.

I wonder if some of the majors aren't tempted to sell some of their production at $138? I mean, really. If you don't think that is a reasonable price, and they tell us they don't, then why doesn't Exxon just go in and start taking all the bids they can? They and the other majors would be the ultimate strong hand. But then, what do I know?

Central banks, short covering, a respected analyst issuing a near-term call for a $20 rise in oil, conspiracy theories and Iran, long-only funds buying, everyone scared to short, margin calls, and a credit crisis all give us the perfect storm.

John Mauldin | When Bubbles Collide



The numbers are staggering. Between early 2004 and mid-2007, a period of unprecedented wealth on Wall Street, seven of the nation’s largest financial companies earned a combined $254 billion in profits.

But since last July, those same banks — Bank of America, Citigroup, JPMorgan Chase, Lehman Brothers, Merrill Lynch, Goldman Sachs and Morgan Stanley — have written down the value of the assets they hold by $107.2 billion, gutting their earnings and share prices. Worldwide, the reckoning totals $380 billion, much of which reflects a plunge in the value of tricky mortgage investments.

More downbeat news is expected this week, when several big banks, including the ailing Lehman Brothers, are scheduled to report results for the latest quarter. As the tally of losses keeps growing, many bank executives — and their shareholders — keep asking the same question: When will the pain end?

New York Times | Nearly Half of Wall St. Bank Profits Are Gone

The flagging dollar and lack of oversight have unleashed speculative forces which are out of control leading to food riots, massive protests and starvation. The market cannot self-correct as long as interest rates on the world’s reserve currency are kept artificially low. The global financial crisis radiates from Washington, which is where the solution lies.

Mike Whitney | Down For The Count

HSRC Study on Xenophobia Probes Underlying Causes...

A study by the Human Sciences Research Council (HSRC) of the recent spate of xenophobic attacks in South Africa warns that the reintegration of foreign refugees back into their homes may not be possible for some time under current conditions. ... The study uncovers the enduring sentiment in communities affected by the violence that the local and national governments did not sufficiently acknowledge their perspectives around the problems that led to the xenophobic attacks.

‘If government does not engage with the sentiment being expressed by ordinary residents that foreign nationals should leave the country, the risk is that these feelings of alienation between government and South African citizens will deepen and the possibility of successful reintegration ... will be diminished,' the report says.

The study was the result of an intensive and rapid research project aimed at getting to grips with what really caused the recent outbreak of xenophobic violence. The research will still proceed to interrogate further some of the identified causes and elaborate on suggested interventions.



From the analysis of field work data from focus group interviews and the public opinion survey conducted by the HSRC, the report identified longstanding and proximate causes to the conflict. The more proximate causes point to the fact that in the communities where violence broke out, a general sentiment of ‘siege' exists.

Impoverished people feel ‘besieged' by a range of pressing socio-economic challenges. Rising food and fuel prices, the onset of winter, endemic unemployment and the lack of formal housing have all contributed to the increasing "othering" of large numbers of working men and women coming from other parts of the continent. In some instances this has included internal migrants from other parts of South Africa.

The longstanding grounds of dissatisfaction, which should form the basis for reflection by the leadership of this country, revolve around the levels of participation in democratic deliberations and processes by people at the grassroots. A tradition of participatory democracy through organs of people's power, ranging from street committees to area committees, was on the ascendant in South Africa before 1990 but was watered down during the negotiated transition period from 1990 to 1994.



Grassroots self-organisation and initiatives were impaired and a state of mass inertia set in during this period. The demobilising effects of negotiated transition to democracy at the grassroots level, is coming back to haunt us as South Africans — two decades later. The demand which clearly emerges from focus groups is that people want to have a voice in the deliberations of policy on migration. This then indicates the need to provide support in the regeneration and strengthening of their organs of community dialogue and engagement as a precursor to the re-integration of immigrants into their communities.

On a much broader scale, the xenophobic violence which has occurred in the country invokes the imperative to go beyond institutional safeguards that can best manage diversity but to take into consideration the issues of subjectivity, history and lived meaning in our communities. The latter infers the need to look into a long term strategy in order to create a new and appropriate national identity framework and consciousness. There is now an imperative to invest in ideological resources that will foster the inculcation of a tolerant and inclusive 'we' feeling in our communities. Otherwise we may not rule out the possibility that at another point in future, South Africa may find itself faced with a similar situation.

Human Sciences Research Council (HSRC) | HSRC study on xenophobia probes underlying causes

"We were against these people from the onset that’s when terms like makwerekwere (derogatory term for foreigners) came about, we were against them in a light manner but now people are getting angry that is why they beat them up, their numbers are growing and some have babies this side it’s as if this is their hometown; this violence happened because people are getting angry, this thing has always been there but it wasn’t as strong as it is now. We never said we are happy to live with them but it was a light thing so people resorted to violence because of the realisation that the situation is getting serious." [Focus group respondent, HSRC Xenophobia study, June 2008]

Human Sciences Research Council (HSRC) | Citizenship, Violence and Xenophobia in South Africa: Perceptions from South African communities

Alternatively — as the HSRC site is unbelievably slow, download it here [185KB].

Critique: It's a crap paper. Having fixed a couple of errors in the press release above (bar a typo or two, the final paragraph remains meaningless) and having read the report, I'm left feeling, "We pay people for this?"

Simplistic doesn't do it justice. It's high-school stuff. Really.

Bush 'may convert to Catholicism'

D'ja hear the one about the hooker and the pitbull?"

"President George Bush was given such a splendid welcome by Pope Benedict XVI yesterday that rumours started flying that the President, like Tony Blair before him, was on the verge of converting to Catholicism.

"It was a Vatican visit such as no other head of state has ever enjoyed. Instead of greeting him, like all previous high-ranking visitors, in the papal library of the Apostolic Palace, the Pope took Mr Bush round the medieval St John's Tower then gave him a tour of the Vatican gardens, culminating in a brief open-air concert by the Sistine Chapel Choir.

"The Pope waited for the President at the entrance of the tower. As he arrived, the President was overheard gushing "What an honour" as the two men disappeared for a half-hour tête-à-tête, details of which have not been made public."

The Independent | Bush 'may convert to Catholicism'

"Asked what he thinks his legacy might be, he says he is happy to await the verdict of history. But he cannot resist also offering his own, suggesting 'the liberation of 50 million people from the clutches of barbaric regimes is noteworthy, at a minimum'."

The Observer | I freed millions from barbarism, says President with no regrets

"US President George Bush has complimented his French counterpart Nicolas Sarkozy on his choice of wife, on the latest leg of his European tour.

"Mr Bush heaped praise on French first lady Carla Bruni, describing her as 'a really smart, capable woman'.

"'I can see why you married her,' he told the French president in Paris."

BBC | Bush compliments Sarkozy on wife

Undoubtedly a good Catholic boy.

Photograph: Father Christopher's Jesus Bunker Jokebook

Reintegration and the Politics of Death

"Welcome back to reality, you foreign bastard..."

Government has announced that a national day of mourning for those who died in recent attacks on foreigners will be observed on June 24. Government spokesperson Themba Maseko says it will not be a public holiday.

The public will be asked to pay its respects to the 62 people who lost their lives during the violence. Maseko says a national memorial tribute event will be held in Pretoria.

Meanwhile, the reintegration process of foreigners into the Atteridgeville community, west of Pretoria, is underway. They were forced out of their shacks following xenophobic attacks over the Easter weekend, during which shacks were set alight and foreigners chased away.

SABC News 13 June 2008 | Day of mourning declared for xenophobia victims

The situation could not be worse. The opportunity exists to further compare South Africans' predilection for setting foreigners afire and the official response to it with the disastrously callous abuse of Hurricane Katrina survivors.

In Cape Town, Mayor Zille and Western Cape premier Ebrahim Rasool insist the "reintegration" of foreigners into local communities is the only feasible response to last month's xenophobic attacks that officially left 62 dead and tens of thousands homeless.

I've had ongoing contact with the Culemborg refugees over the past week and, beside the obvious deterioration of their physical well-being with passing time, little has changed for them.

However, as many citizens and NGOs pretend a 'return to normal', the Treatment Action Campaign (TAC), the eMzantsi Ubuntu Coalition and several other organizations have opposed the nakedly racist motives of the city in forcing traumatized refugees back to townships they fled in fear of their lives.

By denying the refugees inner-city shelter, the city and province are actively pursuing apartheid-era policies to divide and rule the desperate, disparate, and disconnected groups of foreigners. Very few community or church halls have been opened in Cape Town's predominantly white southern suburbs.

Earlier this week, with the assistance of the TAC, several hundred belonging to the 'Caledon Square Group' managed to infiltrate and enforce their right to shelter and protection in the Cape Town Civic Centre, a stone's throw from the 'Culemborg Group'.

As conditions deteriorate elsewhere, I've watched the Culemborg Group being subject to what can only be seen as an officially sanctioned and systematic campaign of terror prosecuted by the SAPS, the Metro cops, and G4S security thugs.

Business and government are colluding to use these state and formal-sector services as a private army. Protected or backed by the SAPS and Metro cops, of which I've seen groups circling the 'camp' like vultures, the G4S guards allegedly move in to destroy shelters and steal or 'confiscate' possessions.

Who the hell is G4S? It's the world's largest security company. It's employed by the Cape Town City Improvement District (CTCID) which, with the City of Cape Town (the Web site of which bears little relation to reality), forms the Cape Town Partnership.

These are the people who run our town and, justifying their actions through a form of pomo relativism, they do not want black fuckers from Africa's failed states littering one of the world's prime tourist destinations.

In much the same way and using the same subterfuge as that employed by New Orleans when using Blackwater mercenaries to clean up that sad city and further the Global War on the Poor, Cape Town is allegedly using G4S to return refugees to the charnel houses of the townships.

Yet again, business trumps philanthropy in providing much-vaunted 'humanitarian aid' to refugees.

Noting the reports bracketing this entry were issued within 24 hours of each other, this is the result.

Another Mozambican has died at the hands of an angry mob, this time in Atteridgeville near Pretoria. Police say the 30-year-old man was dowsed with petrol and stoned to death in the Phomolong section of the township.

The attackers accused the victim of being part of a group that had burnt a shack belonging to a local. Police have ruled out xenophobia. Spokesperson Thomas Mufamadi says armed criminals attacked the man, robbing him of cash. However, the man's family says he lost three spaza shops during previous xenophobic attacks.

SABC News 14 June 2008 | Another Mozambican burnt to death in SA

Cape Town's Brave Face

Javas Zvandazira's bruised face fronts Cape Town's Civic Centre

One of South Africa's most famous beauty spots is now a scene of disgrace. Just out of sight of the tour buses that flock to the Cape of Good Hope, more than 2,000 foreigners are crammed into a makeshift refugee camp on the shores of the Atlantic, seeking protection from xenophobic attacks that have killed more than 50 people across the country and devastated South Africa's image as a haven of stability.

Associated Press | Thousands seeking refuge near Cape of Good Hope

By all accounts that matter, i.e. the broadcast media, government, and the U.N., South African public and civil agencies have done a fantastic job providing humanitarian aid to 35,000 foreign refugees displaced by the horrific May township pogroms.

Western Cape premier Ebrahim Rasool can be heard on 567CapeTalk extolling our virtues and our African commonality. Mayor Hellen Zille, having worked local government to a lather instituting temporary relief measures, seems happy to relinquish responsibility for Western Cape refugees. And the freesheets popped into our suburban psyches each Thursday have been brimming with pictures of smiling schoolkids hovering over piles of clothes and food donated by our leafy selves to assist 'the poor' in their hour of need.

Javas Zvandazira, Degen Machikunda, and Hammilton Makliyere know it's going to take longer than an hour to sort out the mess they're in. Recent arrivals from Zimbabwe, they're still used to roughing it on the road and, being young, indulge few fancies. They're three of the hundreds of refugees turfed out of the Customs House site alongside the Arabella Sheraton on 4 June to fend for themselves under the Coen Steytler / Eastern Boulevard flyover leading into the central city.


"You must go!"

Separated from the burnt and broken buildings of the Culemborg Goods' Yards by a long stretch of usually deserted road, the main 'pick up point' is situated on a large tract of open land dotted with palm trees usually used as digs by local indigents.

No shelter, no toilets, no showers, no food, no nothing...

"We're putting in water points," a city employee told me as his team cleaned the vast swathe of wet grass and mud now occupied by hundreds of refugees hounded from the townships.

"He's lying," commented Degen under his breath. "We've heard nothing but lies and promises."

Having witnessed the arrival of the refugees during the week (when you find somebody sleeping in your usual parking bay, you're bound to notice them) and having read Michael 'Traps' Trapido's moving account of the relocation of refugees to a camp in Corlett Gardens, Johannesburg (at which entry you will also find salient, intelligent comments), I felt I should meet my new neighbours and acquaint myself with conditions on the ground.

It's mid winter. The ground is cold and wet, and an icy northwester accompanied by discomfiting squalls of rain ensured it stayed that way. Nevertheless, the area not sheltered by the overpass is fast becoming a cardboard city and is now home to Javas, Degen, and Hammilton (fenced in, the covered area is reserved for heavy machinery).

On my arrival earlier today, several open council trucks were loading refugees for transit to Blue Waters, a camp on the Strandfontein coast. Few of those remaining at Culemborg wished to go.

"We have to stay here," commented Javas, still sporting a stitched cheek and entrepreneurial zeal. "We need to get work. There's nothing to do at those camps."

So-called safe sites such as those at Blue Waters, Soetwater on the Atlantic coast (near Cape Point), and at the Youngsfield military base are, by all accounts, hell holes awaiting outbreaks of disease. So, having been dropped off by a minibus taxi at this Godforsaken spot in the middle of the city was better than being trucked to three meals a day and visits by state health officials in the middle of nowhere?


Hammilton Makliyere and Said Omar Salahi

It seems so. Though new to the area, and with Javas appointing himself spokesperson and guide in chief, the Zimbabwean trio warming themselves on the edge of the freeway took me down to Said Omar Salahi's shop under the freeway. The young refugee from Zanzibar had set up shop, a shuttered, two-wheel wagon, immediately on arriving at the edge of the decrepit Culemborg Goods' Yards.

I'd wandered over to Said's earlier in the week and, given the superabundance of Bar Ones stocking his shelves, had immediately noticed that paperless refugee status imposes certain constraints on choice.

But Said, a gentle Rasta with sad, smiling eyes, sold just about everything else you might find at your nearest Athlone wholesaler. Besides, his shop serves as more than a source of provisions. With other shopkeepers operating mobile dispensers mounted on everything from customized racks to supermarket trolleys, Said's shop is a centre of information and conversation.

There are few, if any, women and children down at the Goods' Yards camp. They were either huddled in their plastic-covered cardboard boxes or, like most, have put their children’s health first and taken the trucks to the 'safe sites'.

Strolling through the developing camp with Javas, Degen, and Hammilton, I chanced on Jose da Silva, an Angolan only because that is where his travels started. He is the quintessential African Rastafarian, a man who draws people to his feet. Literally. I found him surrounded by an audience and asked him if he minded me taking a couple of shots. Photographs, that is.

Whereas most refugees, seriously mistrustful of South Africans and extremely camera shy, cover their faces or turn away, Jose gave me the benefit of his fully-focused, fearsome glare.

"What for? What do you want to do with these pictures? Like all the rest, do you think we are to be moved around like animals in a zoo?"

My kinda guy. We spent some time chatting, covering the situation as it now stands and the likelihood of any meaningful resolution. Like me, Jose doesn't see much chance of a peaceful resolution and, while speaking only for himself, he articulates the view of most.


Degen Machikunda, Javas Zvandazira, and Hammilton Makliyere

Cape Town's refugees have been, and continue to be, treated like shit. Official responsibility for their wellbeing having shifted to the province, they now find themselves living on the fickle whim of charity in the shadow of the Civic Centre, from where Africa's wealthiest city is run.

Hammilton reminded of the pictures of southern suburban children in our weekly freesheets.

"We were at St. Paul's Church in Rondebosch for a week but they told us they had no more food or money and we had to go." He looked glum. It must have been a time of promise. But it was short-lived. "They gave us all these clothes," he added brightly, sweeping his hand over his winter garb.

Two weeks ago, I blogged. "And so it goes... and so it will continue to go... for a while. Then there'll be a lull. People will assist our diminished population of foreigners until they tire of them or the next round of attacks start." It's something to which I've grown accustomed. The rich cannot stand very much poverty.

Around a month ago, I blogged the old radar station built by the South African Engineer Corps (SAEC) down at Cape Point. Sixty years ago, twenty thousand homeless people would have presented no problem. Today, mindful that the army has been mobilised and looking at the long ruin of the building running alongside the nascent refugee camp, I wondered what the hell had become of the SAEC.

In any functional country, the military would be able to slap up shelter, showers, toilet and cooking facilities in a couple of days.

But that was another time and, it seems, another country. Poor, it had compassion. Today, wealth abounds and it seems compassion left for the coast on an open-topped truck.

Doing what they can with what they have — which, in both cases, is not very much — government and the occasional NGO seem to be doing their damndest to help out while not endangering their positions on the precarious hierarchy of neoliberal order (notable exceptions include the indefatigable TAC and several others).

But really, we're at the start of a long, tough journey and we've been found wanting already. It's not that we can't do it — it's that we're afraid to. Through a revamp of the economic system and state-subsidised and regulated factories countrywide, we could roll out sustainable housing for all within our borders in ten years.

Absent such radical socio-economic change, the poor will continue to get poorer and the rich, richer — at an ever-quickening pace. Globally, the war between the two has been raging for years. We've ignored it. And I'm afraid we're going to have to pay the price.

Not that I mind all that much. Taking my leave of Javas, Degen, Hammilton, Jose, Said and the many other brave faces of Cape Town this afternoon, I knew I'd be back. If you've ever found the warm, educated and civil heart of Africa in the townships, you'll have no trouble finding it in a refugee camp.

It's like coming home after a hard day's work.

“I left Mogadishu in 2005 to open a shop in Orange Farm. In Johannesburg. They shoot my partner. They kill him. Then I come to Khayelitsha. They chase me here. South African government does nothing. F*** government. F*** South Africa. Government say sorry? F*** sorry. Only two things. We go home. Or we go other country. America. Or Australia. South Africa? F*** it. Now is finished here. We’re not stay here. F*** South African people. Xhosa people, they see us work, they see us and do nothing. They’re lazy and like to drink and sleep with women. F*** Xhosa. They steal from us, they kill us.”

Andrew Donaldson | The End

Andrew Donaldson is not 'his usual self' over at The Times. Read The End and weep. Alternatively, pitch in.

Later...

Proprieter: Said Omar Salahi

At 2:00 pm this afternoon, 567CapeTalk's Eyewitness News reported refugees at the Soetwater 'safe site' threatening mass suicide by walking into the sea if forced to 'reintegrate' into the townships from which they have fled.

Cape Town authorities say foreign nationals at the Soetwater relief camp near Kommetjie are threatening to commit mass suicide. The National Sea Rescue Institute claims people are threatening to go into the sea and drown themselves as attacks on forgeiners are still happening.

The displaced immigrants are adamant they will not be reintegrated into communities where hatred is rife. The foreigners apparently threatened the lives of volunteer’s and local officials at the site. All personnel were evacuated from the site.

As intonated in this and earlier posts, we've reached the end of the beginning rather than the beginning of the end of this increasingly desperate situation.


"...down where the vultures feed..."

Johan Horak of the eMzantsi Ubuntu Coalition, whose Sam Pierce gives us Observing xenophobia in the Independent, blogs:

A tragedy is unfolding as people who fled xenophobic terror now face the uncaring machinery of the state. Most camps and shelters in which displaced people are staying fall below international humanitarian standards.

We have received unconfirmed reports of people going on hunger strike as well as four attempted suicides at Soetwater Refugee Camp today. There is enormous dissatisfaction at the camp. The conditions are awful: it is cold and insufficiently sheltered. It is not on a public transport route to Cape Town, so displaced people are essentially stuck in the camps without adequate information about the outside world, unable to work or attend school. There are not enough toilets, so the sanitary state of the camp is horrendous. Refugees are receiving two meals a day, but the organisation of food distribution and the quality of the food is unacceptable, with many of the camp’s approximately 3000-4000 people only eating cold food. The camp was one of several set up by Mayor Helen Zille to relocate people displaced by xenophobic violence two weeks ago. Both the province and civil society have condemned these camps.

On 4 June 2008, we sent a letter of demand to President Mbeki, Premier Rasool and Mayor Zille asking for a plan to deal with the conditions at Soetwater, to bring the UN in to advise and assist on all aspects of this crisis and to open up alternate shelters like community halls. We received a positive response from the premier, no response from the President and a deeply regrettable response abdicating all responsibility from the mayor.

The Coalition, a grouping of NGOs and volunteer organisations speaking for the Soetwater communities, has three demands:

• Soetwater Camp and other refugee camps must be closed. The people of Soetwater must be relocated to secured facilities in the city centre and suburbs, on transport routes, close to Cape Town’s Central Business District and where there is much greater chance of reintegration.
• The President must give the United Nations a mandate to assist displaced people who wish to repatriate to their own country or a third one.
• The UN at its most senior level must immediately take responsibility for properly communicating with all displaced people about the options available to them.

From what I've read, seen, and know of the situation, these demands are considered, rational, and feasible. THEY DEMAND SUPPORT. The first is patently obvious and coincides with the views expressed in my immediate and independent contribution to this entry. The second and third flow from it. Government is failing us on every level (immigrants, refugees, and citizens) and cannot cope with this fast-escalating nightmare. So do the sensible thing and, yes, for God and Allah's sake, ask for help.

Call in the army you've mobilised. Build shelters across the city. Give Africa back to Africans, allow all to pitch in and help, and free Cape Town's vast and untapped resources. Now. Before, as with the ludicrously dangerous notion of "re-integration" into the townships, it's way too late.

A Foreigner In My Own Land

If being a South African means beating on the door of a shack and demanding to see a green identity book — the dompas of citizenship — then I am a foreigner.

If being a South African means dragging a woman into the road to push up her skirt and drive my boot between her legs, then I am a foreigner.

If being a South African means sharpening my machete to split the skull of a man returning home from work, then I am a foreigner.

If being a South African means ripping an infant from its mother’s back to spit in a little face wizened by terror, then I am a foreigner.

If being a South African means dropping concrete blocks on that mother’s head until it bursts like a ripe watermelon on the dry dust of my street, then I am a foreigner.

If being a South African means arrogating the roles of policeman, prosecutor, judge and executioner, then I am a foreigner. If being a South African means hanging over my fence and watching the smooth skin of a man blister as he burns alive, then I am a foreigner.

For that skin is an infant’s, once caressed by a mother’s hand. That skin is a man’s, and a lover’s hand passed over it, marveling at its smoothness. That skin is a father’s, reached for in the night by a child afraid of the dark. That burning skin was a man’s — and if being a South African means I can’t feel that skin as my own, then I am a foreigner.

Margie Orford

You will appreciate in the circumstances the City has no legal competency to address any of your concerns and it is suggested that you direct your request to the Premier of the Western Cape Province.

The all-too-South African response to eMzantsi Ubuntu Coalition's request for assistance from Mayor Helen "This City Works For You" Zille.

Metro Cops Attack City Refugee Camp

Cape Town Metro Police's hands-on style...

Monday Early this morning, Cape Town's goon squad, the Metro Police, allegedly descended on Culemborg's little corner of Africa and set about tearing down refugees' cardboard shelters.

I've no need to flatter these callous bastards with any niceties — an article in the Independent on a fine posted to Dierdre O'Neill after being battered beyond recognition by an Inspector Lourens Bester (yet to face any disciplinary action) speaks for their lack of social graces.

As for their killing of their own...

If planned, their mission was to force out as many of those camping at the 'pickup point' as possible — for relocation to a hellhole on the coast. If unplanned, their brutal assault showed them behaving true to form. A few hours later, the city set up a row of toilets alongside the condemned Goods Yards' building.

Yep, they're black, they're African, they're possibly "illegal", and you probably want them on a truck to Zimbabwe.

This afternoon, for all the refugees' tough looks and business-as-usual attitude, their trauma was evident. Faced on the one side by Zille's thugs and on the other by Rasool's apartheid-era reintegration plan, they're caught in the middle of the worst type of official indifference.

South Africans (see comments)? Given half a chance, they behave like Nazis.

Max'd Out?

As a blogger of repute, Reg Rumney is able to distil sense from persistent inflation targeting through interest rate hikes.

To a common-or-garden blogger like yours truly, raising interest rates makes as much sense as Greenspan, Bernanke and Paulson fueling inflation by dropping them altogether and selling off the U.S. to Middle Eastern, Asian, and Chinese sovereign wealth funds.

Reg argues his case, Ten myths about inflation and interest rates, in the face of local reports reflecting how the Fed's decades-long fetish for bubbles enriching the money moguls is impacting your average citizen in so-called developing economies:

The World Bank said overall food prices had risen by 83 percent in three years.

"The bottom line is definitely that basic food is getting out of reach for too many people. With a consumer price index [measure of change in the average price of consumer goods and services] of 15,7 percent on the total basket, people cannot afford the basic food items," said Ina Wilken, the deputy chairwoman of the South African National Consumer Union.

The council's report said the price of a loaf of brown bread rose by almost 22 percent in the year to April, while the price of a loaf of white bread had increased by 26 percent. The cost of dairy products increased by 25 percent, while vegetables soared by 33 percent, the report said. A 2,5kg bag of cake flour now cost 52 percent more, while the price of cooking oil shot up by 103 percent and mealie meal by 25 percent.

"These are products that most people would buy just to survive - the average increase on these items is higher than the 15,7 percent on the total basket," Wilken said.

"With the increases we have seen, at least 40 percent of South Africans can no longer afford even the basics," she said. Wilken said the government seemed to care little for its citizens when it hiked the price of fuel and interest rates almost on a monthly basis.

Interest rates have risen nine times since June 2006 with no sign of a break, following two warnings this week from Tito Mboweni, the Reserve Bank governor, that the interest rate might go up by 200 basis points.

[...]

"Households will come under heavy strain, and defaults and bad debts can be expected to increase," said Nicky Weimar, the senior economist at Nedbank.

But, Wilken said: "The man on the street is really getting tired of asking questions and being bombarded with tariff hikes. When you have lost your house, your car and you cannot eat, nothing makes sense anymore."

Independent | Triple whammy to hit beleaguered consumers



House repossessions will triple in the next few months if cash-strapped consumers are hit with another interest rate hike.

This comes after Reserve Bank governor Tito Mboweni this week hinted he might raise the interest rate by 200 basis points next month. The hike would raise the repo rate to 13,5 percent and the prime lending rate to 17 percent.

Sandro Crosti, CEO of Proplist, a national company that auctions bank-repossessed properties, said banks could no longer "nurture" clients who continually defaulted on repayments.

'People will take a loss just to release themselves from their massive payments'
He said the number of house repossessions had shot up by 400 percent over the past three months.

"Banks are starting to repossess more and more, and are struggling to resell those homes. In 1997, when interest rates were over 20 percent, 40 000 houses were repossessed - just in the suburbs. We are heading for worse times now, and in the next 12 months we could see the 1997 property repossession figure triple."

Independent | Rate threats have public on edge



Headline inflation, as reported by Stats SA, reflects a year-on-year increase of 11,1 percent - 5,1 percent higher than the 6 percent upper limit for inflation set by the Reserve Bank.

Food categories that made the highest contribution included grain products, milk, cheese and eggs, fats and oils, fruit, nuts and vegetables. The price of brown bread increased by 21,58 percent and that of white by 26,37 percent.

The prices of a 5kg bag of super and special maize meal increased by 5,23 percent and 5,66 percent respectively. The council said this was within the inflation band, which meant some relief for the poor who relied on maize meal as a staple.

On average, dairy product prices had increased by 24,65 percent. Meat prices continued to increase at a slower rate than other foods. Prices of main vegetables showed increases of 32,85 percent.

Independent | Cost of food at its highest in five years

Reg uses Max du Preez's column, Someone stop Tito please!, to launch his free-marketeering educational programme. I see Max based his entry, written for lay people, on Joubert Botha's Open Letter to Reserve Bank, noted as an entry below.

I'd like to read Reg and Professor Botha going 'head to head' on fundamental change — not that I feel Reg (in critiquing Max's article) is 'picking' on a 'more manageable' competitor.

I'm certainly not that cynical. It's just that, as SANCU deputy chair Ina Wilken points out above:

"When you have lost your house, your car and you cannot eat, nothing makes sense anymore."

Update: As U.S. unemployment soars and Dow Industrials shed 395 points on an $11 spike that sees oil to a record $138.54, Lynley Donnelly exposes The real inflation villain over at the Mail & Guardian.

Update Too: A commenter on Reg's blog, Yaj Chetty of the South African New Economics Network (SANE) hammers a qualified nail into the single-solution-economics coffin:

Raising interest rates raises the cost of debt/money, raising the cost of doing business, exacerbating cost-push inflation and slowing business activity, slowing economic growth, more bankruptcies, job losses and this is how the poor are adversely affected even though they don’t have mortgage bonds.

This is so because of the way in which new money in the form of debt is created and issued into circulation by the commercial banks under the fractional reserve banking system. The reserve bank sets the reserve ratio or requirements for the banks. Currently, the reserve ratio in SA is 4% , which means that for every R100million rands that the banks borrow from the reserve bank at the repo rate they are able to issue R4 BILLION rands of new loans upon which they charge interest. This is how 95% of our money supply is created, the other 5% being cash issued by the Reserve Bank into circulation.

The Central banks of China and India increase the reserve requirements of the commercial banks as well as interest rates when they need to cool down their overheating and rapidly growing economies in order to rein in credit extension and demand-pull inflation.

The Central bank of China has increased the reserve requirements for the banks as much as 8 times over the last 2 years up to 18% to try and cool its economy growing at a blistering rate of 10%.

So the SA Reserve Bank does have other instruments at its disposal, other than interest rates if it wants to rein in lending but the banks will not like it so they do not do it. Our reserve bank is owned and controlled by private shareholders.

Ultimately we need monetary reform to full reserve banking where the SA Reserve bank has direct control over money supply.

I've no idea where SANE (or sanity) is hiding out these days, but Yaj Chetty articulates facts frequently obfuscated by the economist's favoured lingo, a knee-jerk, smoke-and-mirrors dialect of short-term self-interest in which fiction, more often than not, subverts and supplants uncomfortable truths.

The Colour of Money

With an official increase in rates, individuals are faced with grim economic options, with some being forced to sell their houses and other assets. There is an all-round decrease in purchasing power to those struggling to make ends meet. Smaller businesses, which employ most South Africans, will find it more difficult to keep all their staff. It amounts to a transfer of cash from the poor to the rich. The common man is forced to carry the can, while the banks laugh all the way to their tills.

[...]

Over a number of years mainstream banks have been extending credit with impunity. Any move towards credit control would cause a furore. It would be denounced as an assault on the banks and the capitalist system, complemented by vitriolic articles in the financial press, as happened in the 1970s.

[...]

Credit control has overtones of socialism. It is incompatible with a free-market economic system, which rejects official interference in business. [But] Interest control is also interference in the private sector. [And] ... if in one system the rich gain at the expense of everyone else, questions should be raised.

Joubert Botha | Open Letter to Reserve Bank

With petrol hitting US$4.84 a gallon at midnight, it's nice to know there's still intelligent life out there...

It won't fill my tank, but more might come to realise South Africa's economy is only one or two percentage points from collapse. The filthy rich might also realise any such collapse will hit them far harder than it will most of us.

Better to turn from short-term profiteering to investing in a sustainable future for all.

Ho ho ho...

Under A Dark Sun

Click to enlarge...

I managed to get down to the sea this weekend. Like many living in the shadow of the mountain, young Zubair Anderson did not.

A body discovered at the weekend in an open field near Hanover Park in Philippi has been identified as that of 12-year-old Zubair Anderson, Western Cape police said on Monday.

The boy lived in Hanover Park with his family, said Inspector Bernadine Steyn.

Anderson's body was found with a copper wire around his neck and an open wound to his head on Saturday.

"It seems that his shoes were taken," said Steyn.

No arrests had been made and a murder case was opened.

Independent | Murdered boy identified

A radio newscast speculated that Zubair was bludgeoned to death with a brick found nearby.

I know a woman whose son was stabbed to death in Khayalitsha a couple of years ago. His killers took his clothes.

Zubair was murdered for his shoes.

Such is the cost of living.

I'll be back down at the water's edge this weekend. I want to catch the sun's arc in a cloud.


Click to enlarge...

"If you ask me why we did it here in Cape Town, it's just because we saw it on TV. For me I didn't mind getting all that free stuff."

19-year old looter