And here we have been wondering why things keep getting more and more expensive.
Now we know.
I keep asking the same questions over and over from economists: “How is it that Africa’s strongest economy and arguably its most developed nation, is struggling like this?”
It turns out a big part of the reason is the behind-the-scenes manipulation of our currency.
While you and I have been struggling, banks have been taking full advantage.
The Rand manipulation story may sound complicated, but trust me, it’s not.
Like almost all stories of this nature, its chief motivation is greed. And this time, it’s on an international scale that affected each and every one of us.
They were determined to squeeze the last remaining penny out of the poor and the middle class, to enrich the privileged further.
Between 2007 and 2018, more than 28 of South Africa’s and the world’s biggest banks colluded to fix the value of the Rand.
The consequence for us: retrenchments, salary cuts, increases that don’t keep up with inflation, lower export revenue and higher prices at the till, especially on imported goods.
So as you can see, every single citizen was affected to some degree. And these things don’t go away when the dishonesty stops.
There’s usually a lag that can take decades to right itself, and sometimes it never does.
Some of you may still remember times when the Rand was equal to the Dollar and the Pound in value.
But not many people ask or understand how the gap has become so big and why it only gets bigger, even when – politically and economically – we are on a good wiclet.
Those currencies barely suffered any meaningful damage through massive crises like Brexit and Donald Trump’s presidency.
Despite all the fancy, technical, academic explanations, it all comes down to individual trader sentiment. In other words, currency manipulation.
The difference this time is that it wasn’t politically sanctioned. It appears that this was just pure, unfiltered and brazen greed by individual currency traders.
So far our Competition Commission has fined two of the banks in excess of R110 million, while the others are still fighting the rulings.
It may sound like a lot of money, but trust me, these banks have the world’s smartest actuaries working for them and they would’ve calculated the risk very carefully.
It’s almost certain that the fine is a pittance compared to the profit they have made.
And considering how high our interest rates are, they’ve probably recouped those fines many times over, just in the interest they made from the stolen money kept in their own digital vaults.
To reiterate, that’s money they stole from us in a very sophisticated global heist, in which they were the robbers.
Meanwhile, the estimate is that the direct loss to South Africa’s coffers is around R1 trillion, not to mention the snowball effect it continues to have on the economy.
Rightfully so, there are now calls for a Parliamentary debate, a commission of inquiry, better forex controls, new regulations and even outright criminal prosecution.
Politicians are throwing around phrases like “treason,” “economic sabotage” and “corruption”, which aren’t far off the mark.
But there’s another observation that deserves highlighting.
Reputational damage is apparently something our banks are very concerned with.
So much so, some of them are determined to completely collapse this newspaper’s parent company, and in so doing, destroy the financial security of thousands of people, myself included.
All because the Independent Group is headed up by Dr Iqbal Surve, whose credentials the bank takes exception to. This a matter of principled values, that must be upheld.
The word that’s floating around in the back of your head right now is “hypocrisy” – a blatantly egregious example of it, at that.
breinou@gmail.com