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Authorised Financial Services Provider – FSP No: 859. The Economy – What Was, What Is & What Will Be. Dawie Roodt 17 September 2008. Presented by:. Evolution Timeline. Homo Sapiens “Humans” Migrate across Asia & Europe. Australopithecines. Homo Habilis. Neanderthals. Paranthropus.
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The Economy – What Was, What Is & What Will Be Dawie Roodt 17 September 2008 Presented by:
Evolution Timeline Homo Sapiens“Humans”Migrate across Asia & Europe Australopithecines Homo Habilis Neanderthals Paranthropus Homo Erectus 5.5mya 2.7 mya 2.5 mya 1.5 mya 230k ya 195,000 yrs ago
Hunter-Gatherers • Nomadic • Small Groups • No Specialisation • No ‘Surplus’ • Diet: High Protein Low Fat • Short Life expectancy
The 1st Big Step Forward: Domestication of Animals
Domestication of Animals • Domesticate animals • Bigger clans • Nomadic • Diet High Protein More Fat • Longer life expectancy • Small surplus
The 2nd Big Step Forward: Domestication of Plants
Civilisation: Mesopotamia • Domesticate plants – especially grain • Carbohydrates more energy free time ‘surplus’ • Non-nomadic • Cities • Spesialisation • Autocratic Leadership • Civilisation = ‘rules’
Key Characteristics of Civilisation Monotheism • Organised Government • Complex Religion • Job Specialisation • Social Class • Writing & Record Keeping • Arts & Architecture • Public Works Polytheism Royalty Priests Traders Labourers
Dawn of Democracy Establishment of Institutions…
The Economic Role of Institutions Private Property Rights Independent Judiciary Freedom of Press Independence Central Bank Democratic Process
Destruction of Institutions Democracy:New Leader Appointed Ecstatic! Change Economic Policy: More ‘democratic’ Take from the “Haves” (non-supporters) Give to the “Have-Nots”(supporters) IGNORES Private Property Rights Negative ImpactonInvestmentSavingsConfidence UNDERMINES Economy
Destruction of Institutions Democracy:New Leader Appointed Ecstatic! Change Economic Policy: More ‘democratic’Take from the “Haves” (non-supporters) Give to the “Have-Nots”(supporters) Inflation: 200,000,000% ?? IGNORES Private Property Rights Negative ImpactonInvestmentSavingsConfidence UNDERMINES Economy CapitalDwindles…. Start to Print Money DESTROYS Independence Central Bank Media & Press: Report on Disapproval and Objections by Public Court & Legal System:Public tries to find Justice through legal system DESTROYS Independent Judiciary BANS Freedom of Press
Destruction of Institutions Democracy:New Leader Appointed Ecstatic! Change Economic Policy: More ‘democratic’Take from the “Haves” (non-supporters) Give to the “Have-Nots”(supporters) DESTROYS Democratic Process Democracy: Mugabe-Style1 Man, 1 Vote, 1 Candidate! IGNORES Private Property Rights Voting System:Public tries to vote dictator out Negative ImpactonInvestmentSavingsConfidence UNDERMINES Economy CapitalDwindles…. Start to Print Money DESTROYS Independence Central Bank Media & Press: Report on Disapproval and Objections by Public Court & Legal System:Public tries to find Justice through legal system DESTROYS Independent Judiciary BANS Freedom of Press
Destruction of Institutions Democracy:New Leader Appointed Ecstatic! Change Economic Policy: More ‘democratic’Take from the “Haves” (non-supporters) Give to the “Have-Nots”(supporters) DESTROYS Democratic Process IGNORES Private Property Rights Voting System:Public tries to vote dictator out Negative ImpactonInvestmentSavingsConfidence UNDERMINES Economy CapitalDwindles…. Start to Print Money DESTROYS Independence Central Bank Media & Press: Report on Disapproval and Objections by Public Court & Legal System:Public tries to find Justice through legal system DESTROYS Independent Judiciary BANS Freedom of Press
Destruction of Institutions in SA? Private Property Rights 2008: Land Expropriation Bill
Destruction of Institutions in SA? Freedom of Press “Mbeki received R30m”
Destruction of Institutions in SA? Independent Judiciary Zuma’s Mauritius Papers
Destruction of Institutions in SA? Independence Central Bank SARB Hikes 10Times! interest rate
Destruction of Institutions in SA? Democratic Process POLOKWANE
South African Economy: Breakdown Source: StatsSA, Q108
Household debt to disposable income Q208:76.7% 59.4% 56.9% 50.2% 44.5% Source: SARB and own calculations
Savings to disposable income of households 9.2% 5.4% 2.6% 0.5% Q208:-0.5% Source: SARB and own calculations
Inflation: Old Basket CPI Average: 2008 8.5% Source: StatsSA and own calculations
Inflation: New Basket? CPI Average: 2008 9.4% Source: StatsSA and own calculations
Authourised Financial Services Provider – FSP No: 859 www.efgroup.co.za