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“All The Jobs Are Gone” – Africa Facing ‘Complete Economic Collapse’ As Virus Spreads

“All The Jobs Are Gone” – Africa Facing ‘Complete Economic Collapse’ As Virus Spreads

The COVID-19 pandemic and lockdowns across the African continent could trigger an economic collapse, according to one United Nations (UN) official, who spoke with Associated Press (AP). 

Ahunna Eziakonwa, the UN Development Program regional director for Africa, warned that the pandemic would likely result in job losses for millions of people, many of whom are already low-income, have no savings, and have no access to proper healthcare. 

“We’ve been through a lot on the continent. Ebola, yes, African governments took a hit, but we have not seen anything like this before,” Eziakonwa said. “The African labor market is driven by imports and exports and with the lockdown everywhere in the world, it means basically that the economy is frozen in place. And with that, of course, all the jobs are gone.”

We’ve warned over the last month that a virus crisis looms in Africa. A little more than half of the continent’s 54 countries have imposed lockdowns, curfews, and or travel bans to mitigate the spread of the virus. 

Places like South Africa, where the military has enforced “unprecedented” Martial law-style lockdowns through mid-April, is an attempt to thwart social uprisings as 370,000 jobs have likely been lost.  

For the 1.3 billion that inhabit the continent, widespread lockdowns are triggering vicious economic downturns, couple that with a public health crisis, and it could be a perfect storm that results in social unrest. 

Eziakonwa said unless the virus spread can be controlled – then up to 50% of all estimated growth for Africa’s travel, services, mining, agriculture and the informal sectors could be lost. An extended period of subpar economic growth could be seen across the continent in the quarters ahead.

…click on the above link to read the rest of the article…

How to Deal with Rolling Blackouts: Notes from South Africa

How to Deal with Rolling Blackouts: Notes from South Africa

Editor’s note: By now, just about everyone has heard about the difficulties occurring in South Africa. The violence is palpable, the corruption is an everyday fact, and utilities such as water and electricity are no longer a given. Not only that, but the cost of these utilities has become prohibitive, so conservation is a necessity. Backup power, such as solar or generators, have become a necessity for many families.

Now people in California are dealing with rolling blackouts due to PG&E’s new policies during wildfire season.

In this article, a regular reader from South Africa shares some of the tips for starting out with generators and backup power that have made it easier to deal with the continuous rolling blackouts and outrageous prices for electricity.  ~ Daisy


Living in South Africa we have had our share of rolling blackouts nationally. The cause: nefarious activities. The result being us forced to find ways to ensure we are not affected as badly.

The problem is better now, but it has highlighted that it is not just a South African problem, but in actual fact a Western world problem. We all are totally reliant on a massive aging infrastructure that can come tumbling down like a house of cards, with or without help.

Another problem is the cost to keep the national system operational. In some areas, it is not a priority to resolve the regular failures.

For getting started with backup power, remember that NEEDs vs WANTs –  a huge price difference.

  • UPSs – with like 2 up to 8 100ah batteries. Good for a number of hours depending on use – most cost-effective solution
  • Generators – works for some, but cheap ones cost more as they damage some electrical appliances over time.
  • Solar inverters and panels – power failures, what is that? And you save a lot of money afterward IF YOU DO IT RIGHT.

 …click on the above link to read the rest of the article…

Backup Power on a Budget: Notes from South Africa

Backup Power on a Budget: Notes from South Africa

Editor’s note: By now, just about everyone has heard about the difficulties occurring in South Africa. The violence is palpable, the corruption is an everyday fact, and utilities such as water and electricity are no longer a given. Not only that, but the cost of these utilities has become prohibitive, so conservation is a necessity. Backup power, such as solar or generators, have become a necessity for many families.

In this article, a regular reader from South Africa shares some of the tips for starting out with generators and backup power that have made it easier to deal with the continuous rolling blackouts and outrageous prices for electricity.  ~ Daisy


Living in South Africa we have had our share of rolling blackouts nationally. The cause: nefarious activities. The result being us forced to find ways to ensure we are not affected as badly.

The problem is better now, but it has highlighted that it is not just a South African problem, but in actual fact a Western world problem. We all are totally reliant on a massive aging infrastructure that can come tumbling down like a house of cards, with or without help.

Another problem is the cost to keep the national system operational. In some areas, it is not a priority to resolve the regular failures.

For getting started with backup power, remember that NEEDs vs WANTs –  a huge price difference.

  • UPSs – with like 2 up to 8 100ah batteries. Good for a number of hours depending on use – most cost-effective solution
  • Generators – works for some, but cheap ones cost more as they damage some electrical appliances over time.
  • Solar inverters and panels – power failures, what is that? And you save a lot of money afterward IF YOU DO IT RIGHT.

…click on the above link to read the rest of the article…

Good Times…

Good Times…

My son wanted to know why it is that Venezuela (a topic that gets discussed around the dinner table at home) chose such painfully, obviously asinine policies.

After much thought I explained it thus.

Hard times create strong men. Strong men create good times. Good times create weak men. Weak men create hard times.CLICK TO TWEETI’d seen it before somewhere and so I dug it up. Here it is in a different form.

We bipeds don’t change. I’ve come to realise not to fight it, just see it for what it is and make sure you’re positioned accordingly…for your friends family and those you care about. Speaking of which you should consider joining our family.

No special offers, no steak knives, no wild ridiculous promises – simply rational analysis and positioning for a macro world we’ve never encountered before. EVER! That’s both exciting and terrifying at the same time.

We’re Bad

At literally everything. We buy high, sell low, look to what Johnny next door is wearing, what car he drives. We get taken in and scammed by shysters, we believe in the unbelievable.

Which brings me swiftly to EM where fund managers desperate for yield dived into the fire over the last few years. Now the inevitable pain is hitting as default fears mount for “BATS” as the emerging-market rout deepens.

Turkey’s implied default odds climbed to highest since 2008 and over in the land of great steaks default risk in Argentina is …ahem…substantial.

As Bloomberg points out:

  • Argentina’s implied default probability over the next five years climbed this month to 41 percent, the highest since Mauricio Macri’s government ended the nation’s decade-long legal battle with most holdout creditors.
  • Turkey’s implied default odds during that span rose to 31 percent, the highest since the 2008 global financial crisis.
  • Brazil’s implied default odds increased to 18 percent, the highest since the country’s worst-ever recession deepened in late 2016.
  • South Africa’s implied default odds soared to 15 percent, the highest since Donald Trump’s election in November 2016.

…click on the above link to read the rest of the article…

Rand Tumbles As Government Warns Of “Catastrophe” Unless ‘Land Reform’ Allowed

In a barrage of headlines that sparked chaos in FX algo markets, The South African government proclaimed proudly that it is opposed to illegal land grabs (sparking a rally in the rand) before humans realized that this is mere statement of fact and that the entire reason for this process is to ‘legalize’ land grabs through reform.

As Deputy President David Mabuza said, the nation will “slide into catastrophe” if land reform doesn’t take place.

“The majority of our people are poor and homeless,” he told lawmakers in Cape Town Thursday.

“Our resources to carry out reform are limited.”

And the reaction is now getting real as the Rand nears two-week lows once again…

Notably, the rand is behaving more erratically this month than it did during the height of the power struggle between Jacob Zuma and Cyril Ramaphosa in December. The rand’s one-month historical volatility is now at its highest level since December 2016 and the currency is headed for its worst August performance against the dollar on record, on track for a 9 percent drop.

As Bloomberg notes, President Cyril Ramaphosa has embraced land expropriation without compensation as a means to achieve equality and racial justice, and in a bid to steal a march on populist opponents before elections in 2019. A planned amendment to the constitution is still a work in progress, with public hearings on the matter concluding next month.

Yesterday saw UK PM Theresa May confirm her support of Ramaphosa’s “land reforms” as long as they’re legal…

“The UK has for some time now supported land reform that is legal and transparent and generated through a democratic process. I discussed it with President Ramaphosa during his visit to Britain earlier this year and will discuss it with him again later today,” she said.

…click on the above link to read the rest of the article…

Weekly Commentary: Turkey (Nudged Over the Cliff)

Weekly Commentary: Turkey (Nudged Over the Cliff)

The Turkish lira sank 13.7% in chaotic Friday trading. The lira’s 21.0% “worst week in 17 years” collapse pushed y-t-d losses to 41.1%. Turkish 10-year yields spiked to almost 21%, before retreating somewhat. After beginning the year at 155, Turkey sovereign credit default swaps (CDS) spiked 166 bps during Friday trading (up 199 bps for the week) to 437 bps (high since Feb. 2009).
EM Contagion Effects gained momentum this week. Friday trading saw the Argentine peso hit 3.8% and the South African rand sink 2.7%. For the week, the Argentine peso fell 6.6%, the South African rand 5.5%, the Brazilian real 4.0%, the Hungarian forint 2.2%, the Romanian leu 2.1%, the Polish zloty 2.2% and the Mexican peso 1.8%. On the (local) bond yield front, 10-year yields in Brazil jumped 66 bps, Russia 40 bps, Hungary 15 bps and South Africa 13 bps. As global “hot money” frets faltering liquidity and the next shoe to drop, Brazilian equities sank 5.9% (as Brazil sovereign CDS jumped 24 bps to 237 bps).

August 10 – Bloomberg (Lionel Laurent): “Turkish President Recep Tayyip Erdogan has been standing firm as investors dump his country’s assets at an alarming pace, saying: ‘They have got dollars, we have got our people, our right, our Allah.’ European banks with substantial investments in Turkey will hope some of that divine providence rubs off on them, too, after sticking with a bet that has gotten more perilous over time.”

Fears of contagion this week were not limited to the emerging markets. With significant exposure to Turkey, European bank stocks were slammed in Friday trading. Unicredit sank 4.7% and ING Groep fell 4.3%. The big German banks, Deutsche Bank and Commerzbank, dropped 4.1% and 3.5%. European Banks (STOXX600) fell 1.9% Friday.

August 10 – Financial Times (Claire Jones, Ayla Jean Yackley and Martin Arnold): “The eurozone’s chief financial watchdog has become concerned about the exposure of some of the currency area’s biggest lenders to Turkey – chiefly BBVA, UniCredit and BNP Paribas – in light of the lira’s dramatic fall…

…click on the above link to read the rest of the article…

If You Think the Water Restrictions in California Are Tough, Check Out Cape Town

If You Think the Water Restrictions in California Are Tough, Check Out Cape Town

Remember earlier in the year when the news was abuzz about Day Zero in Cape Town, South Africa?  According to the press at the time, the day was looming when the city of 3.74 million people would run completely out of water. First, the date of Day Zero was heralded as April 16th, then May 11th, then June 4th.

Calculating Day Zero took into account maximum evaporation (based on temperature and wind) and existing patterns in agricultural and urban use—an equation that considered both natural and man-made conditions. (source)

Now, they’re saying the disaster has been averted for now, but that it could happen in 2019. And if you think the water restrictions in California are tough, wait until you see what they’re doing in Cape Town.

So how did Cape Town avoid Day Zero?

Day Zero was delayed by a combination of things. Fortunately, there was some rainfall, and citizens went to great effort to reduce their water usage.  There was a public campaign to basically scare Capetonians into compliance with conservation efforts.

Late last year, as the South African government faced the prospect of its largest city running out of water, they took an unprecedented gamble.

The government announced “day zero” – a moment when dam levels would be so low that they would turn off the taps in Cape Town and send people to communal water collection points.

This apocalyptic notion prompted water stockpiling and panic, caused a drop in tourism bookings, and raised the spectre of civil unrest.

…click on the above link to read the rest of the article…

The 11 Cities Most Likely To Run Out Of Drinking Water

As of Sunday afternoon, the dreaded “day zero” – the day residents of the city of Cape Town, South Africa, will need to begin queuing for drinking water after supplies sink below the threshold of sustainability – was estimated to be Nov. 11, 2018.

The shortage is the result of South Africa’s worst drought in 100 years…

And with city government efforts to secure alternative water supplies progressing slowly, Cape Town (pop. 440,000) is on track to become the first major world city to run out of water.

Hiring security forces to guard water supplies and forcing residents to ration their use must be unimaginably frustrating for the city’s government. But during a press conference late last month, Patricia de Lille, Cape Town’s mayor, expressed another secondary annoyance that, in some ways, is even more profoundly disturbing.

A disaster that was until recently only imaginable by writers of dystopian science fiction is playing out in front of our eyes: And what’s worse: Nobody seems to care.

“We have reached the point of no return,” Patricia de Lille, Cape Town’s mayor, warned this month. With anger in her voice she added: “It is quite unbelievable that a majority of people do not seem to care.”

But they should – if only because they’re city might be next:

As the BBC notes, over one billion people lack access to water and another 2.7 billion find it scarce for at least one month of the year. A 2014 survey of the world’s 500 largest cities estimates that one in four are in a situation of “water stress”.

Here’s a list of 11 other major cities where the taps may soon run dry, courtesy of the BBC.

Sao Paulo

Brazil’s financial capital and one of the 10 most populated cities in the world went through a similar ordeal to Cape Town in 2015, when the main reservoir fell below 4% capacity.

…click on the above link to read the rest of the article…

Worst Drought in Capetown in 112 Years – Part of the Cycle

QUESTION: Marty,

Any thoughts/comments regarding the impending water shortage in Capetown? As a person who has much historical knowledge, are you aware of a major city such as Capetown ever running out of water? Or is this truly a historical first?

Love your blog as it covers so much information and isn’t just corporate financial data like so many others.

Your loyal reader from

Alan.

ANSWER: South Africa will score this season the worse drought since 1904 right on schedule on the 112-year cycle (1/2 224). We must respect that the climate is changing back to a dry cold period and this has impacted South Africa. This is also part of the cycle we see with rising food prices into 2024. Just as we have seen the coldest periods in the USA back to 1899, we are witnessing the worst drought in Capetown also back to the same general period. Unfortunately, yes they can run out of water on this cycle. It will be a very close call.

Who will drink the last glass of water in Cape Town?

Who will drink the last glass of water in Cape Town?

Because Cape Town sits between picturesque beaches and mountains, it is a favored travel destination. And, its weather during the summer is described as “almost too perfect.” That’s in part because it rains very little in the summer in this second most populous city in South Africa.

Water, water everywhere, but not a drop to drink

Trouble is, starting in 2015 the rainy season never arrived. One year, then two years and now three years of extreme drought have brought the city’s water supplies almost to exhaustion. Barring extraordinary rains or even more draconian cutbacks in water usage than have already occurred, Cape Town officials say they will have to turn off water to most household taps and businesses sometime in April. They’re calling it “Day Zero.” Hospitals and essential public facilities will be exempt. Most residents would have to line up at designated water supply stations for a daily allocation of 25 liters.

Cape Town’s current troubles were not necessarily foreseeable in the usual sense. Yearly long-range weather forecasts raised no alarmswhen they were released since they did not predict an extreme drought for that year.

The causes of the city’s water problems are, in fact, multiple. First, Cape Town’s population has risen 80 percent since 1994 (the end of white rule) to 3.75 million people putting extraordinary demands on its water system. Second, average rainfall has been gradually decreasing for decades and has reached its lowest since 1933. Comparable records before that are not available. One calculation cited in the above linked article is that the current drought is the worst in more than 300 years. Another calculation suggests the multi-year drought is a once-in-a-millennium event. Third, climate change is almost certainly increasing the likelihood of such a drought though there is no way to prove the link to this particular drought.

…click on the above link to read the rest of the article…

Climate Bellwether? With Cape Town Almost Out of Water, “Day Zero” Looms

Climate Bellwether? With Cape Town Almost Out of Water, “Day Zero” Looms

In less than three months, residents in South African city could be lining up for rationed water under armed guards. “Is this the new normal?”

Tree trunks stand in the critically low Theewaterskloof Dam in Villiersdorp, South Africa, Jan. 23, 2018. (Photo: Reuters)

Tree trunks stand in the critically low Theewaterskloof Dam in Villiersdorp, South Africa, Jan. 23, 2018. (Photo: Reuters)

For residents of Cape Town, “Day Zero” is getting closer.

That’s the day when taps in the drought-stricken coastal South African city are projected run dry, and its residents would be forced to head to police-guarded distribution sites to obtain their daily ration of water.

“Anyone who works in climate change knows that we’ve given lots of quite doomsday-esque scenarios in the last two decades. This is the first one which I’ve really seen come true.”
—climatologist Simon Gear
The city warned last week that the day was “now likely to happen.” And on Monday, the city, citing a drop in dam levels, moved the projected day up from April 22 to April 12.

“We have reached a point of no return,” Cape Town Mayor Patricia de Lille said last week announcing tightened water restrictions for the city’s 4 million residents. Starting Feb. 1, residents face a 50 liter per day limit (13.2 gallons). [For comparison, Americans’ daily home use is 88 gallons of water, the EPA says.]

When Day Zero hits, the limit will be 25 liters per day, to be collected at one of 200 water collection points. Agence France-Presse reports: “With about 5,000 families for each water collection point, the police and army are ready to be deployed to prevent unrest in the lines.”

USA Today, however, reported that “Each collection point will accommodate around 20,000 people per day.”

Cape Town is being described as the first major city in the developed world that would run out of water.

…click on the above link to read the rest of the article…

In less than 3 months, a major international city will likely run out of water

In less than 3 months, a major international city will likely run out of water

(CNN)In Cape Town, South Africa, they’re calling it “Day Zero” — the day when the taps run dry.

A few days ago, city officials had said that day will come on April 22. This week, they moved up the date to April 12.
Cape Town is South Africa’s second-largest city and a top international tourist draw. Now, residents play a new and delicate game of water math each day.
They’re recycling bath water to help flush toilets. They’re being told to limit showers to 90 seconds. And hand sanitizer, once somewhat of an afterthought, is now a big seller.
“Unwashed hair is now a sign of social responsibility,” resident Darryn Ten told CNN.

People collect drinking water from pipes fed by an underground spring in St. James, about 25 kilometers from the city center of Cape Town.

The genesis of the crisis

So how did this happen? How does a major city in the developed world just run dry?
It’s been a slow-motion crisis, exacerbated by three factors conspiring together:
Even with the predicament they find themselves in, residents haven’t dropped their water use significantly, said Patricia De Lille, Cape Town’s mayor.
The city has lowered the water pressure in their mains to help stretch the water supply. But usage is still 86 million liters above its target goal.
“It is quite unbelievable that a majority of people do not seem to care and are sending all of us headlong towards Day Zero,” a statement from the mayor’s office said. “We can no longer ask people to stop wasting water. We must force them.”

…click on the above link to read the rest of the article…

Hell On Earth: Major City Will RUN OUT Of Water In Less Than 95 Days

Hell On Earth: Major City Will RUN OUT Of Water In Less Than 95 Days

earthquake drought natural disaster

If you’ve ever needed a reason to store extra food and water, this just might be it.  Cape Town, South Africa is on schedule to run out of water in less than 95 days, and when they do, the government will turn off the taps.

“There are only 95 days left before we reach Day Zero,” the City of Cape Town announced on January 15 in a statement. “Day Zero has moved a day closer this week to April 21, 2018. Day Zero is when the City will be forced to turn off most of the taps.”

The coastal South African city has been battling droughts for nearly three years, amounting to the worst one in their history. With little rain on the horizon, the city has now ordered its 3.7 million residents to drastically cut their water consumption, take short stop-start showers, not wash their cars, and flush toilets as little as possible. If they don’t, all of their taps could be shut off by the government in April.

The city doesn’t appear to have any plan in place for such a SHTF event. But if the government cannot find a solution to the problem, Capetonians will be forced into “bread lines” for water. As if that isn’t scary enough, city residents will have a limit of 5.5 gallons of water a day that will only be given to them at specific government outposts around the city.

Cape Town’s mayor Patricia de Lille‏ tweeted: “I cannot stress it enough: all residents must save water and use less than 87 liters [19 gallons] per day… We must avoid Day Zero and saving water is the only way we can do this.” Not missing the opportunity to levy extra taxes on the populace, the city mayor has also impeded a “drought charge” in order to fund new water projects, such as constructing desalination plants.

…click on the above link to read the rest of the article…

Russia, China and BRICS: A New Gold Trading Network

Russia, China and BRICS: A New Gold Trading Network

One of the most notable events in Russia’s precious metals market calendar is the annual “Russian Bullion Market” conference. Formerly known as the Russian Bullion Awards, this conference, now in its 10th year, took place this year on Friday 24 November in Moscow. Among the speakers lined up, the most notable inclusion was probably Sergey Shvetsov, First Deputy Chairman of Russia’s central bank, the Bank of Russia.

In his speech, Shvetsov provided an update on an important development involving the Russian central bank in the worldwide gold market, and gave further insight into the continued importance of physical gold to the long term economic and strategic interests of the Russian Federation.

Firstly, in his speech Shvetsov confirmed that the BRICS group of countries are now in discussions to establish their own gold trading system. As a reminder, the 5 BRICS countries comprise the Russian Federation, China, India, South Africa and Brazil.

Four of these nations are among the world’s major gold producers, namely, China, Russia, South Africa and Brazil. Furthermore, two of these nations are the world’s two largest importers and consumers of physical gold, namely, China and Russia. So what these economies have in common is that they all major players in the global physical gold market.

Shvetsov envisages the new gold trading system evolving via bilateral connections between the BRICS member countries, and as a first step Shvetsov reaffirmed that the Bank of Russia has now signed a Memorandum of Understanding with China (see below) on developing a joint trading system for gold, and that the first implementation steps in this project will begin in 2018.

Interestingly, the Bank of Russia first deputy chairman also discounted the traditional dominance of London and Switzerland in the gold market, saying that London and the Swiss trading operations are becoming less relevant in today’s world. He also alluded to new gold pricing benchmarks arising out of this BRICS gold trading cooperation.

…click on the above link to read the rest of the article…

As Drought Grips South Africa, A Conflict Over Water and Coal

As Drought Grips South Africa, A Conflict Over Water and Coal

Facing one of the worst droughts in memory, South Africa’s leaders have doubled down on their support of the water-intensive coal industry. But clean energy advocates say the smartest move would be to back the country’s burgeoning wind and solar power sectors.


Until a ferocious drought withered crops, turned rivers to trickles, and dried up municipal drinking water supplies, one of Limpopo province’s distinctions was the ample sun and good soil that made it South Africa’s premier producer of fruits and vegetables.

Another distinction was that the province’s farmers made an informal agreement to share scarce water with coal companies developing the Waterberg Coalfield that lies beneath dry central Limpopo.

Keith Schneider
Residents of KwaZulu-Natal wait in line daily to get water from a government-supplied tank.

The drought, the most extreme in South Africa since the start of the 20th century, shattered the fragile equilibrium between the agricultural and coal sectors. Pitched street clashes between farmers and police, who back the coal interests, have broken out south of Musina, where Coal Africa proposes to build a $406 million mine in an area where some of the country’s most productive vegetable farms operate. The mine would consume 1 million gallons of water a day, according to company disclosures. Both the mine and neighboring irrigated farms are dependent on the Nzhelele River, which has dwindled to a shallow stream.

Higher temperatures and diminished rainfall, which many scientists attribute to climate change are wreaking havoc in two of South Africa’s largest economic sectors — agriculture and energy. Yet in the face of this growing crisis, South Africa’s leaders continue to display unyielding allegiance to the nation’s water-guzzling coal sector, whose 50-plus billion tons of coal reserves fuel 90 percent of the country’s electrical generating capacity and provide a third of its liquid fuels.

…click on the above link to read the rest of the article…

Olduvai IV: Courage
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Olduvai II: Exodus
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