David Gracey

David Gracey

David Gracey

Head of Foreign Exchange and Fixed Income Trading

Contemplating life | Currency Comment

altext

It’s an endless litany of disappointment from our global ‘leaders'.

Early this morning, I had a lot of time to contemplate some of life’s most intriguing questions:
 

  • If the black box always survives an airplane crash, why don’t they build the entire thing out of the same material?
  • If you’re not allowed to drink and drive, why do pubs and bars have car parks?
  • If there’s always an applicable speed limit, why do car manufacturers build cars that can exceed this limit?
  • Where does navel lint come from, and why is it always a dark colour?
  • Why are politicians so infuriating?

 
The reason for this abundance of time at an ungodly hour is… load shedding! Eskom decided, as it does, to turn off my power at around 03h00 this morning. Ordinarily this would have gone unnoticed but, because I have a back-up generator that kicks in after a few minutes, every electronic device in my home decided to announce their resurrection with a selection of whirs, clicks and beeps. And then, for the next few hours, I lay listening to the glorious deep baritone-like BRRRRR of my generator’s monotonous D-major, doing its work.
 
As time slowly moved forward, that last question occupied my mind, as I became increasingly angrier at the ineptitude of our politicians and civil servants. What I should have done was to put my headphones on and found something to watch/listen to. But, alas, I was so overcome with fury that any rational thought escaped my mind altogether.
 
I mean, think about it…
 
We elect people into office who ordinarily do not have the skills to find decent jobs on their own, then we pay them a salary, and then they use that lack of skills to come up with harebrained schemes to ‘govern’ our lives. And don’t think I’m only talking about South Africa here, although much of my wrath was directed at our own lot. All over the world the situation is the same: 
 

  • Boris Johnson is banning some journalists from No 10
  • Donald Trump can’t find Kansas City on a map (both stories true – google it)
  • Our own President is continuously shocked  – although I’m not sure how - Eskom can’t generate enough power to shock anyone.

 
It’s an endless litany of disappointment from our global ‘leaders'. And then just as I could not take it anymore – and decided to get up and do my morning exercises earlier than normal (you know, preparing for our Christmas day soccer rematch) - the lights came back on. Now, I fully realise that my problems may well be trite compared with what’s going on out there – what with poverty, Coronavirus, etc, but allow me the space to vent.
 
Which leads me neatly to the outlook for our currency/country. GDP in SA will continue to go nowhere for the next few years – Eskom simply cannot generate enough power. Slowly we will see the power mix in SA change as more and more corporates and individuals move to generate their own energy (don’t use a generator). But this will take a long time.
 
This means that our national balance sheet will remain bloated and vulnerable. It also means that unemployment will grow – which means that social grants will continue to consume more and more of the national budget. It also means that confidence will remain constrained, and South Africans will continue to look for opportunities elsewhere.  
 
This is even before we have attempted to implement expropriation without compensation – another confidence constraint, and long before we have even had a go at NHI. As you can tell – my morning hours were spent thinking about, and reinforcing, my bearish outlook.
 
Thank goodness then that I managed to find some great old music that I haven’t listened to in a long time, while I roamed the streets of my neighbourhood. It certainly lifted my mood. Just imagine how Dr Doom would have sounded without it. Oh – and just remember, 22 points people – that also lifts my mood.
 
Comment and rates accurate as at 4 February 08h30.