Expected petrol hike spells disaster

Scooby_Doo said:
Definition of middle class is between R5000 to R10 000 depending on the research paper you look at. Pretty sure most individuals on this forum are earning more than R10k.
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In 2011 middle class was actually R151 728 - R363 930 per household *. Adjusting for today could easily inflate that by 20%. I know where you pulled your definition from and its questionable.

* Source: INCOME AND EXPENDITURE OF HOUSEHOLDS IN SOUTH AFRICA, 2011 (Research Report 429), compiled by Mr ME Masemola, Prof CJ van Aardt and Ms MC Coetzee.
 
cbrunsdonza said:
In 2011 middle class was actually R151 728 - R363 930 per household *. Adjusting for today could easily inflate that by 20%. I know where you pulled your definition from and its questionable.

* Source: INCOME AND EXPENDITURE OF HOUSEHOLDS IN SOUTH AFRICA, 2011 (Research Report 429), compiled by Mr ME Masemola, Prof CJ van Aardt and Ms MC Coetzee.
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Per house hold is the key here, so more than 1 person can be earning an income which is inline with what I said.
 
Scooby_Doo said:
Per house hold is the key here, so more than 1 person can be earning an income which is inline with what I said.
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That's not all you said.

You said that most people on MyBB would be above 10k, however their household would most probably be classified as middle class.
 
150bps? What are these economists smoking? I could see a 50bps increase to bring the repo rate in-line with inflation and not much more. What's the point of not adjusting the target rate as the repo rate moves?
 
Garson007 said:
150bps? What are these economists smoking? I could see a 50bps increase to bring the repo rate in-line with inflation and not much more. What's the point of not adjusting the target rate as the repo rate moves?
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I'm agreeing with negative outlook of 100bps. There will be a lot of pressure to avoid any increase or talk of it leading up to the election date, but a 50bps increase sometime in late May would not surprise me and the market will determine the 50bps one.


Personally I budgeted for a 200bps increase for this year and adjusted our budget accordingly.
 
Also expecting major interest rates hike which is why I decided not buy a place just yet(buyers market soon) and move closer to work albeit staying in one place for more than a year would have been nice. Current petrol and currency trends make me weary
 
Mystic Twilight said:
In a rational government, yes. In an ANC government, they will probably just print more money for themselves to spend. .
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Impossible at this point. The Reserve Bank is responsible for printing money and the last time I checked it was an independent institution that is privately owned.
 
I've seen people buying food and putting it on budget on their credit cards. Is that ignorance or necessity?
 
saturnz said:
Impossible at this point. The Reserve Bank is responsible for printing money and the last time I checked it was an independent institution that is privately owned.
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"Printing money" by a government hasn't involved the actual physical printing of bank notes \ currency for quite some time now.

These days the mechanisms are generally through the bond and money markets. A simplified example: Quantitative Easing in the US involved "printing money" by essentially buying back government bonds from the institutions (banks, pension funds, etc) that owned them. However, the US Fed didn't actually have the assets on their balance sheet to buy these instruments. They simply created (i.e. "printed") the money on their balance sheet and then bought the bonds from the institutions with the created money.

The SA government can do the the same relatively easily - the SARB is "independent" from the government but not really from Treasury or the minister of finance. The SARB are essentially the government's banker - they would have a very hard time arguing against an order from Treasury to implement something similar to QE in SA. Legislation does give them the right and obligation to argue though.
 
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the point I was making is that government does not create money, its the reserve bank.

the mechanisms is irrelevant
 
Koosi said:
A realistic evaluation to keep in mind is that this is the government's doing. They are doing this because they want to squash the middle class down, i.e. make them poor.
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So they're not incompetent, but instead evil geniuses?

Koosi said:
I have considered it but with the way some bikers have behaved they have made motorists hate them, so I am scared for my personal safety.
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You have that backwards. Or perhaps you're from some parallel universe where there was a time when cagers were generally aware of and considerate towards motorcyclists.

Garson007 said:
150bps? What are these economists smoking? I could see a 50bps increase to bring the repo rate in-line with inflation and not much more. What's the point of not adjusting the target rate as the repo rate moves?
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They have no control over the inflation rate. Interest rates, although in a perfect theoretical model a way to control inflation, in the real world are a gesture, so as to not appear to be doing nothing, even though there is nothing to be done.
 
noxibox said:
They have no control over the inflation rate. Interest rates, although in a perfect theoretical model a way to control inflation, in the real world are a gesture, so as to not appear to be doing nothing, even though there is nothing to be done.
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Exactly. Which is why the repo rate should just follow the inflation rate as it fluctuates. Even if it means that inflation and repo are both at 10%. It gives incentive to spend and invest.
 
Scooby_Doo said:
Definition of middle class is between R5000 to R10 000 depending on the research paper you look at. Pretty sure most individuals on this forum are earning more than R10k.
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I see middle class as someone with a house, financed by a bond, that is paying it off every month. There is no way that someone earning R5 000-R10 000 pm is middle class.

We need to grow our middle class in this country. Not shrink it.

And the petrol price is shrinking the middle class VERY quickly.
 
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