Brace yourself south africans

I haven’t written in so long because if Im honest Ive been wrapped up in my own selfish world. The last time I wrote I also told people to go long silver which for those that did wasnt a fun ride. The margin accounts looked terrible and rolling over a position in the red doesnt sit well with most traders. However if you held (like I did) you should be looking a lot happier right now. But I dont want to go on about precious metals just yet. I have a genuine worry id like to share.

Most people reading this are likely in the top 5% of earners in south africa. You may not believe it but chances are you are given how many people dont earn and the many who live on the breadline. The stats are something like we have 10mill registered tax payers. 1 mill pay 90% of the tax. So yes you got it good compared to the average south african. But I bet you dont feel that way when you pay your monthly medical aid, your petrol (currently a big gripe) your water and lights and lastly your food. Its the last one I want to draw your attention to. Recently people have griped about the cost of fuel and the levies attached to them. Some people have downsized their cars and others started to carpool and drive less. They didnt do this because they wanted to but because financially they have no other choice. But at the end of the day all of you reading this are still able to feed yourselves without too much hassle. Brace yourself. Yesterday the rand made a 3 month low against the dollar. To many this is insignificant except commodities are prices in dollars. Oil, Maize, Corn, Coal, Wheat … you see where this is going I expect. Your food bill in the next 6-12 months is going to start climbing at an accelerated rate. This will no doubt annoy you and force you to stop the nandos each week. Or maybe you stop shopping at wollworths and goto pick n pay. But for you reading this you’ll be okay. A bit put out but you wont starve. However if you are the average south african this is very bad news. the average south african doesnt drive a car and tho taxi and bus fares will have gone up its less hassle than the food bill. There is going to be an increasing gap between the rich and poor and most of the middle class are heading to the poos side of that gap. 

Start adjusting now while its a choice. You can adapt voluntarily or you can change when finances force it upon you. Thats my first comment. The second is if you haven’t started to put your money somewhere relatively inflation proof I recommend you do so yesterday. The strikes enveloping the country are just the start. The poor class has been waiting for the empty promises of our government and now they are beginning to say “enough is enough” They see a small elite black class emerge while most of them remain penniless. Mine workers wanting minimum wages of R12500, municipal workers wanitng “market related salaries” (Fire them all let them join the mercy of the private sector i say) Its going to get ugly and the politicians will pander and pay up. Taxes ARE going up in the next couple of years and the biggest one will the the stealth inflation tax. 

You know what todo. Precious metals, food and energy. Dont say you weren’t warned!