Real Estate Investor Magazine South Africa August 2015 | Page 20

COVER STORY
Japan and the United States is proof
of governments using the printing
presses to solve debt problems that
they have created. Results of that in
the US is the city of Detroit that
is bankrupt, California is bankrupt,
predicts that Chicago is on the
verge of bankruptcy who are seeing
the signs of high unemployment,
massive debt and increased violence
as a result of statesman awarding
themselves huge financial benefits.
Phoenix cannot pay pensions to
the retired and there are more
casualties to follow. When America
panics then most people pack a gun
South Africa’s economic prognosis
Kiyosaki who has visited South
Africa multiple times and who
recently just spent more than 6
weeks in South Africa says that
South Africa it is no different from
the US or elsewhere in the world.
He says that Jacob Zuma is failing
South Africa and is falling into the
same trap as the US politicians by
stealing, mismanaging state money
and creating massive amounts of
debt. He says that Zuma is making
his government anti-business
and this can be disastrous to the
future of the country. His close
alliance with Robert Mugabe who
single-handedly destroyed and
bankrupted Zimbabwe puts us in a
bad light.
RW Johnson is a South African
author, journalist and academic
whose latest best selling book ‘How
long will South Africa survive? The
looming crisis’ says SA’s economy
is in dire straits. Johnson says that
after 20 years of ANC rule that
they have shown conclusively that
they are hopelessly ill equipped
to cope with the challenges of
running a modern industrial
economy. Everything suggests that
SA is fast slipping backwards and
survival as a unitary state is not
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AUGUST 2015 SA Real Estate Investor

granted. The Eskom electricity
crisis, SAA, SABC, E-tolls,
PRASA is all examples of failed
public enterprises
Johnson says in his book that the
country is heading towards a likely
International Monetary Fund
(IMF) bail out which in turn will
lead to regime change.
The view from the IMF in
Chapter eight of his book: “The
IMF conducts annual country
consultations under its Article IV.
In 2012 the visiting IMF delegation
expressed considerable shock at
Pretoria’s priorities. Instead of
spending on infrastructure to
mop up some of the mountainous
unemployment and to make the
country more competitive ready for
the upturn. Instead the government
had borrowed massively abroad
merely in order to give the money
away to already overpaid public
sector workers. The IMF warned,
public spending needs to be
completely rebalanced. The IMF
could hardly contain its horror
at the governments complete
disregard for the unemployed.”
Kiyosaki says if the IMF knocks
on SA’s door, then SA could be in
serious trouble.
The pending currency crisis
Kiyosaki says the US dollar is
biggest culprit of inflating world
currency today. Cash is trash as a
result of the US Federal Reserve
policy of printing massive amounts
of dollars. The US national debt
stands between $100 - $260 trillion
and is very disturbing.
Kiyosaki says normal cash money
is actually debt as are credit cards.
Why save when the governments
spending. For each $1 saved banks
create $10 to spend. In 1970 when
money was linked to gold $1
million saved gave you $100 000
interest where today for $1 million

“The single most
powerful asset
we all have is our
mind. If it is trained
well, it can create
enormous wealth in
what seems to be an
instant.”

saved you will get $10 000 interest
Zimbabwe is a frightening
example of a perfect currency
crash when Zimbabwe went into
hyperinflation and the Zim dollar
collapsed in 2009 after years of
rampant money printing. This is
a warning for nations that choose
that route to get out of debt says
Philip Haslam a Johannesburg
based chartered accountant and
econom