Stocks crunching our lives

It struck me a few months ago when we were asked to do an assignment during the first term of journalism, where I had the opportunity to ask the question of “What news, if any, do you follow?” Many responded with facial expressions telling that they have never heard of news before, and that they do not follow it at all. The reason was that– they do not really care.

Therefore it’s quite interesting, this world we live in. We naturally expect things to work. There will always be food on the shelves and what ever you want is easily accessible. Many people who come to Rhodes come form an affluent background where money is easily found. We leave all the problems to the big economic boys, the leaders of the country and international enterprises, like Wall Street, to keep this world spinning in the right direction.

Unfortunately, not sure if you have noticed those big boys in fancy suits and black cars are in a bit of trouble. It has been all over the news, the fact that the markets are in a serious crisis and October 8 saw the US government stupidly bailing out the banks by giving them 700 billion, yes I said a billion, dollars from the tax payer. This, I might add, is the people of the United States of America’s money.

Ok for those of you who don’t know what’s going on let me give you a historical background. A few years ago our trusted US banks made an impression on Europe by buying debt dressed up assts, or more commonly known as toxic assets, to give the impression of security. Europe followed this example, but losses led to something unexpected from one of the top nations in the world. There were to limit the banks’ lending ability. This all sparked something called a liquidity crisis, which was aggravated by the burst housing bubble and a deepening European recession. With all this mess banks around the world started dragging each other down. This damaged the economies others such as Latin America and Asia as well. All this meant not billions but trillions in losses. One particular example is Iceland, which almost went bankrupt. The problem now is how it affects the rest of the world. Take our currency for example. Yesterday at lunch time (16 October 2008) it was sitting at R11 to the dollar and at close yesterday, thankfully, it dropped to R10 to the dollar. At the time of writing this article it was sitting at R10.09.

This is a problem affecting the world and as Time magazine says, “2009 is shaping up to be a bleak year everywhere.” This crisis is going to affect the man sitting at the top, in his suit, to the man on the street looking for a chance in life. To give you an indication, a local computer shop in Grahamstown announced to me that they are buying stock this weekend at a 22% price hike. Unfortunately this is also going to trickle down and raise food prices together with petrol prices, as usual, fluctuating more. One thing in particular, Times magazine predicts “as economies of China and India hit the brakes, so too will the demand for American goods and services. That will have a knock-on-effect on jobs and earnings of companies that rely heavily on international sales.”

So with the world in crisis in terms of this, global warming and terrorism it still shocks me to find people, for example first years who are about to enter the big wide world, not interested in news or not even knowing what is going on. This problem will start affecting us directly as students and when phoning home to ask for more money, cause you paying R10 for tuna, and your parents find it harder to give it to you, you will stop and think. It is time to start saving, which South African’s have a problem with, and wake up to the fact that we need to start with the small things so it helps higher up, our parents for example. Maybe that sixteenth beer is unnecessary. I am not saying stop having fun, but maybe start taking a look at the world we live in and wake up to the harsh reality that is about to hit us.



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