Rational Perspective

Listening to yesterday’s testimony by South African finance minister Nhlanhla Nene was riveting. It also forces the rational mind to ponder where the country would be if this modest man from rural KwaZulu Natal hadn’t stood up against the financial wrecking of former president Jacob Zuma and his cronies. The country was headed the same way as Turkey. And if Edrogan’s example is overlaid on SA, the currency would today be trading around R25 rather than R14 to the US Dollar; and interest rates would certainly be well above 20% - and the stock market (and hence citizens' retirement savings) would be substantially lower. We got a taste of where the country was heading during two insane trading sessions that followed Zuma’s decision on 9th December 2015 to fire his respected finance minister, an action spooked investors, sending shockwaves through the financial system. The Rand plummeted, bond prices soared and the stock market tanked. I crunched the numbers and quantifiable losses on stocks and bonds totalled