South African CPI Hits Double Digits

In today's edition of YIYL, (You Invest, You Lose) we take a break from the craziness in the shitcoin market, and don't worry, we will be back to our usual programming soon because shitcoins are the gift that keeps on giving. Even as I sit here and type this I know someone is being hacked, losing their passcodes, failing to take proper risk management when using a so-called "smart contract" or falling for a total scam.

In fact, there is a new shitcoin scam going on around South Africa, all under the guise of metaverse, I've actually called out some of their promotors, but it seems to be gaining traction and I can't wait to see how this one implodes.

I have done some research on it, but the promotors are still not giving away enough information, but it should leak as they sucker more people in and I can report on it. Being a bitcoiner people tend to ask me about this shit, and god is it painful to have to explain to people why they are stupid, but someone got to do it.

Anyway, let's tackle the reason why these scams are so popular in South Africa because the local currency continues to exact pain on people.

Fobbing off the numbers

Now if you have a look at the CPI headline number it's around 7.8% but what brings that down is the cost of housing, rents, rates, and bond repayments don't tend to move massive amounts and can also be subject to being locked for certain periods. What isn't locked and reacts immediately to market forces is food and energy and if you can live without food and energy, go ahead be my guest.

Food and non-alcoholic beverages increased by 9.7% while Transport increased by 25% year on year but what they do is change the weightings in the basket to try and bring it down. Now anyone with a brain the size of an almond or larger can smell the 7 layers of dog shit wrapped in this report and can see that inflation is long past double digits.

If we have a look at the local currency's performance to the dollar it's lost around 28% of its value in purchasing power terms to the US dollar, and guess what? You need US dollars to import anything and oh did I mention South Africa imports 96% of its petrol?

So how the fuck are you going to tell me inflation is not double digits when you've shaved off more than a quarter of its purchasing power to acquire the medium of exchange needed to purchase goods on international markets.

US exposure not as high in SA

If you're an average South African with a little bit of money, you're probably using a local broker that advises you to "max out your offshore" exposure, which isn't a bad idea generally speaking but many of these brokers don't really have the incentive to give you the yield you need to outpace inflation locally.

Instead of giving you the total exposure to the US market, where you could have had a dollar and stock exposure, they are going to diversify into Europe, specifically the UK. I know plenty of people who are shocked at how poorly their offshore investments have performed thinking it would be a hedge.

So when you're spending your time trying to "diversify" buying a bunch of poorly performing assets based on some stupid risk-adjusted model that doesn't work, you're going to get rekt.

Deprived people become depraved people

People here can't articulate wtf is going on, they just see everything getting expensive and don't realize the tailwinds driving the change, it's just hey it must be scarcity in the markets that drives high prices, a very rudimentary idea of how pricing works.

So when you have faith in the currency and don't see it as the error correction method to a massive amount of debt, that continues to grow, you don't focus on solving the problem, which is holding rands, you focus on acquiring more Rands.

To acquire more Rands, you need to go further out the risk curve, taking on dodgy investments in shitcoins, ponzis, MLMs, trying to get in on government contracts or profit off of crime. All fo which is pretty high in SA and continues to rise.

The mood of desperation is so clear that governments here are talking about finally pushing through the forced removal of land without compensation act with a sneaky bill that will allow them to arbitrarily seize land.

The whole idea is that if they can take from the rich and give to the poor, she'll be alright sheila, but anyone again with a cashew sized brain has to see that no good can come from obliterating property rights.

Sources:

• engineeringnews.co.za
• businesstech.co.za

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