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Wednesday, 24 February 2016

#Economy Lurched at Brink - South Africa


 This is another case where an overpopulated country with diminishing resources  per capita has fallen  onto perpetual hard times like Nauru.  It reflects the peak in global civilization and there are more coming as the resources per capita crisis grows unabated.



Tipping Point Looms for Despairing South Africa  


Not since Nelson Mandela walked out of Victor Verster prison 26 years ago have investors been gloomier about South Africa’s economy.
Money is pouring out at a record pace as inflows dwindle. The rand has plunged and unemployment is the highest among almost 40 developing nations tracked by Bloomberg. Drought is driving up food costs. Hanging in the balance is the investment-grade credit rating South Africa sweated to achieve in 2000, shortly after Mandela left office.
South Africans are paying the price not just for a collapse in commodities prices -- metals and mining contribute more than 50 percent of exports -- but for growing questions over whether President Jacob Zuma is up to the task. Stoking doubts were the antics at the finance ministry in December, when Zuma removed Nhlanhla Nene and replaced him with little-known lawmaker David van Rooyen. As bond yields soared and the rand crashed, he changed his mind four days later and installed Pravin Gordhan, Nene’s predecessor.

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The $700 bank bailout plan Kashkari helped author, known as the Troubled Asset Relief Program (TARP), stopped the Wall Street firms that caused the crisis from going bankrupt. A parallel process, undertaken by New York President Timothy Geithner along with the Treasury Department, pressured the Wall Street banks to merge and get even bigger in hopes that size would increase confidence in the financial system



Why doesn’t government know what’s in your food? Because industry can declare on their own that added ingredients are safe. It’s all thanks to a loophole in a 57-year old law that allows food manufacturers to circumvent the approval process by regulators. This means companies can add substances to food without ever consulting the Food and Drug Administration about potential health risks.



The grey moving average on the larger chart is the 60 day moving average, which is more important than the widely followed 50 DMA, and it shows signs of flattening, a very bullish signal, certainly if it will transition into a rising pattern.


 New Global Financial Cold War  

The United States has responded by changing the IMF rules. It said, ‘Wait a minute. It’s okay for the IMF to make loans to countries that don’t pay China and Russia or the BRICs, because we’re in a new Cold War. The IMF really is working for us.’ As long as the U.S. has veto power in the IMF, its delegate can veto any loan to a country that owes money to the United States that the United States doesn’t wish to support. But it has no objection for the IMF making loans to U.S. satellites such as Ukraine, that official debts to Russia.

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