Is it only me, or does Tito need a new calculator?

Is it only me, or does Tito need a new calculator?

Is it only me, or does everyone else get the idea that Reserve Bank governor Tito Mboweni is adding up the right numbers but getting the wrong answer?

Every time the inflation rate rises, he sticks it to the consumer, blaming our spending habits for putting a strain on the economy. His reasoning, that there is too much money available to fund consumer credit, and that the money supply needs to be stunted through higher interest rates, sounds like dealing with one problem through a solution that is intended for something else completely. It’s like trying to run a Mac program on a Windows computer: it can be done, but that’s not the way it was intended to be used.

This is the way my mind sees it, and maybe it’s only me, but I suspect others think the same way. The interest rate itself, and especially regular increases in the interest rate, increases the cost of credit to manufacturers, distributors, transport operators, retailers, and everyone else involved in the supply chain. These costs are instantly passed on to the consumer, increasing their cost of living in a way that is completely out of their control.

So what does Tito do? Blames the consumer! Hikes the interest rate again! Starts the cycle again! And then blames the consumer again!

This is my plea to Tito: stop running Mac programs on your PC. It’s not good for you, it’s not good for consumers, and it’s not good for the economy. And get another calculator. Your existing one clearly is not adding up the right numbers.

Arthur Goldstruck blog in Thought Leader

Bullseye Arthur I concur 100%.Tito and his panel of experts put up the interest rates and the petrol prices which will obviously spike the cost of living statistics.

They then conclude that the man in the street is spending and needs to be punished and and ditto they do this again and again.

These same fat cats that get paid these lavish pay packets and bonuses from the fiscus coffers have the gall to tell the poverty stricken masses who comprise the majority of the population to tighten their belts.Most of these affected people cant afford belts and the few that just managed to access the formal sector find themselves floundering and slipping back into poverty.This is a dangerous consequence for South Africa both politically and socially.Our circumstances can not be compared to developed countries where all its citizens are middle class and have all the basics.They can survive a recession without dire starvation and homelesness

A developing country where most of the population are still confronting a third world reality need to spend and try and get the basics to survive in an rapidly expanding urban environment.Our ever growing miles of informal settlements confirm this.
Some form of low pegged interest rates for the lower end of the market is urgently needed.A South American country achieved fantastic growth in their standard of living and productivity in an inflationary environment.They then humanely introduced measures to remedy this gradually while retaining the benefits of this growth for all its citizens.Why do our politicians blindly follow the Western countries down the slippery slopes to oblivion?

This government has demonstrated that it is incapable of solving the housing crisis alone.The private sector who were the only hope of making a dent on this huge backlog have now shelved all affordable housing projects.In fact in South Africa the word “affordable housing” is an oxymoron.The new credit act was the final nail in the coffin of the masses ability to ever access credit for housing and self developement.

In conclusion its amazing to see all the analysts
giving credibility to the the same guys that embarked on the foolhardy crippling arms deal,the Eskom debacle and their inept management of law and order in all facets of “The New South Africa “.
A contracting economy fuels the brain drain,crime, fledgling business failures ,unemployment and poverty.Yes Tito your calculator as well as your compass is definitely broken.
Baffled Businessman?

Harold Kolnik on May 9th, 2008 at 1:21 am

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