BRIEF ANALYSIS

So the news that CPI inflation slowed down in June to 5,7% from 6,1% has excited many. The silent prayer that the SARB may drop the repo rate from 5,5% to 5% is deafening. Perhaps a slowdown in inflation is good for preserving the buying power of our money especially for the poor whose livelihoods are disproportionately impaired by runaway inflation.

But hidden in the numbers are deadly telltale signs that the economy may be coming off the boil. For example, leading indicators such as retail sales and business confidence indices point to a lulled macro environment. A slowdown in business confidence and/or activity bodes ill for the economy in general, but job creation in particular.

Buoyancy in economic activity is key to the creation of jobs, if employers believe that output is above supportive levels of demand, it'll trigger a whole new cycle of deleveraging and inventory reductions. This means no investment and thus no new jobs.

The counter argument is that lower inflation will lead to lower interest rates and as such higher investment and more jobs. Unfortunately, the evidence suggests otherwise. For example, the current account deficit widened to 4.9% from 3.6% on a quarter to quarter basis. This suggests higher net cash outflows from portfolio investments and perhaps higher net imports. Both don't augur very well for the country as they suggest both capital flight and a failure in domestic factor markets.

Furthermore, global crude prices have been moderating for a few months now and are currently below US$80 a barrel (an eight month low). This suggests a poor global economic outlook and lower economic activity in significant parts of the world (US, Europe and China). South Africans may be paying 55c/litre less at the pumps, but evidence suggests that there may be fewer of them visiting the pumps.

Sadly, the jobs outlook remains desperately negative. There's no sign that an economic miracle is on the cards in the near term to raise hopes or prospects of higher employment levels.

RACE TO ARMAGEDDON

Climate change, pathological tyranny, wars on terror, epidemiological diseases, abject poverty, financial crises, pervasive corruption, joblessness, oil prices and nuclear warfare are but a mere handful of woes facing mankind in this new world order. Ironically, never has our kind been so technologically advanced and endowed with such an assortment of discoveries, breakthroughs and age old wisdom that we should be the envy of all other species; yet, never have we been so comprehensively bewildered by the sheer magnitude of our problems that we fittingly pity ourselves.

Hilariously we continue to pretend as if we have an impregnable handle on matters, casting policy upon policy and praying ever so profusely that our troubles will give way at any moment now. More alarming however, is that we have sincerely begun to believe our own delusions, isn’t that something? It is abundantly clear that the world is full of problems, profoundly complex and indelibly imbued. Those, within our ranks, who suffer from long-term memory spasm, will best be reminded that it was a mere fortnight ago that Hitler, Stalin, Mao, Gaddafi, Bin Laden, Mubarak and Hussein commanded over millions of hapless followers.

Even with the dismemberment of these ‘flagship’ dictatorships the world doesn’t seem to have urged closer to the Promised Land. Unemployment, in particular, seems to be the chief whip in Pandora’s Box. It has triggered the Arab Spring in Middle Eastern countries and the many Occupy movements in Western financial centres. Many peripheral European states are a mere hiss away from concomitant collapse of fiscal viability, employment and domestic factor markets. In not so distant a future, Africa may become the ‘poster boy’ of civil disobedience when the lulled volcano of societal unrest blows through the lid.

Africa has not created or redistributed nearly enough of its wealth to its people, so much for the richest continent! Africans remain the most indigent of people in the world, our countries remain underdeveloped and our infrastructure leaves much to be desired. Our continent is disproportionately crippled by tameable diseases, famine and lacks clean drinkable water. So ingenious we are that we have inadvertently built the largest tinder box in the world. In no time, a populist will strike the matchstick that will set ablaze the home of all humanity.

Don’t you see? We are moving at an accelerating pace towards Armageddon, but we are too timid to acknowledge it. Already the roads we have traversed so enthusiastically over the preceding few decades have led to this abyss. Indeed, we are at the convergence of socio-political liberation and socioeconomic malaise; no-man’s-land. Greed has won the better part of the last decade, causing almost all of human suffering as our leaders plunder their way through public resources to advance their narrow selfish interests.

So the story continues with the few reigning over the many in the name of politics and economics. How is it that the ‘glorified’ capitalist system has been allowed to reward so few with magnum appropriations of resources and yet condemn so many to utter misery and despicable poverty? Inequality has reached new low points and the disparity between the haves and have-nots has only but widened. Many who have ascended to greater heights suffer from acrophobia and battle to look down, lest the masses pull them back into the void. One of these good days our ineptitude and complicity will reward us with a well baked concoction of civil war, irrepressible crime and class targeted violence.

Brothers and Sisters wake up! The world is burning from beneath your soles.