ARE HAPPY DAYS BACK AGAIN?

 

Year 2009 started with some positives, Fuel prices has dropped down by a whooping 15%, interest rate reduced by a further 1% from a 0.5% in December last year.

 

But, again they say opposite attracts, we have seen an increase of the price of Petrol by R0.61c last week, motor industry is in trouble, figures shows that sales dropped by a huge percentage, thereby affecting the price of platinum which also rely on the motor industry. The platinum giant, AngloPlat, hinted job cuts , they are planning to cut their contractors. At the time of writing this article the price of platinum was R992.00, which is closer to the price of gold at R896.95, remember the price of platinum used to be double that of gold, but not anymore.

 

HIGHLIGHTS FOR THE YEAR 2009 TO DATE

 

We have seen desperate measures being put in place by large S.A. corporates showing that we are heading for recession just like economic heavyweights of this world like U.S. and Britain, but yet our economists are telling us that there is no, and they won't be, crisis in S.A.

 

Interest rates has gone down by a whooping 100 basis point and looks like they will go down again by the same margin if not bigger when the MPC(Monetary Policy Commitee) of the reserve bank meets in their next meeting between the 15th and 16th of April 2009, as hinted by our reserve bank governor Mr. Tito Mboweni.

 

Price of fuel has gone down after the price of crude oil dropped, but again recovered which resulted in the price of petrol going up by up to R0.61c.

 

The only two noticeable things that hasn't gone down is the price of food and taxi fares, one would have prophecised that the price of food will go down as soon as the price of fuel goes down, but again some economic jargons were used to justify the delay in the reduction of the food prices and taxi which are the single biggest expenses for the poor of the poorest. Taxi associations decided to follow suite as they haven't reduced the taxi fares which was increased when the price of petrol increased last year.

 

IT IT SAFE YET TO TAKE OUT OUR CREDIT CARDS AGAIN?

 

Most people are confused, they don't know whether to trust the false alarms triggered by the interest rate decreases, consumer confidence has not increased when interest rates were decreased last year, which led to a huge drop in car sales despite interest rates falling by 50 basis points last year December, now car manufacturers are thinking of begging for a bailout from our government. Should the bailout extends to retrenched employees or was it only designed to protect large firms from collapsing thereby stopping job losses?  

 

We are living in strange times indeed, the best thing for us as household is to stay focused and get prepared for anything that is thrown at us. Let's continue taking care of our household finances by managing our finances using a budget and stop incuring any extra unnecessary debts,

 

Are happy days back again? or should we be worried about recession? Tell us about your predictions for 2009.

 

Happy budgeting,

Madia Thomas

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