By Alec Hogg
In the past few days, we’ve been distracted by the HCI saga, Mbete’s Limo-demanding profligacy, Russians hawking nuclear power plants and Apple’s gay CEO coming out the closet. As a result, Wednesday’s 9-1 decision by the US Federal Reserve to end its six year long money creation programme passed many by.
It shouldn’t have. This is a game-changer. Since Quantitative Easing began in 2008, a flood of freshly minted dollars found its way into all kinds of assets worldwide. Emerging nations were among the biggest beneficiaries. And as usually happens in such cases, we started getting used to the artificial stimulant. Now it’s gone. Perhaps forever.
Yesterday, the gold price fell below $1 200 for the first time since 2010. Platinum followed it lower and with coal already in a slump, SA’s three major mineral exports are generating far less than they used to. Overlay strike-induced production cuts and it’s clearly not a pretty picture.
We may well look back on the American QE splurge as providing us the best of times. Then again, tougher economic conditions have a way of refocusing a nation onto what is really important. Perhaps that, after all, is the blessing South Africa needs right now.
Yesterday’s top stories:
Jackie Cameron: Private investors snap up Tesco PLC shares. Should you?
Kelly Khumalo welcome at Bafana’s captain funeral
Eyethu Orange Farm Mall to create 1 500 jobs
David Shapiro: More evidence of SA business’s “Great Trek”; how to play Ellies now
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