No liquidity

10 07 2011

“There’s just no liquidity” said Phil the Banker, glumly shaking his head. I also blame this lack of cash on the run of poor business we’ve had at the nursery over the last 3 months. Of course, having to rely on diesel power to irrigate one’s crops as the national power grid is so unreliable doesn’t help either.
“Yes”, I replied, “we are just not producing anything”. This is not strictly true, we areproducing lots of diamonds, probably in excess of 1 billion US dollars worth but precious little (excuse the pun) is getting back into the economy.

The retail economy is definitely suffering too. I have been doing a bit of browsing with view to replace at least one of the armchairs I own that probably predate me – they are more than a bit tatty and uncomfortable too. I have been into three outlets that sell furniture this week and in all cases I was the only person in the shop. The cheapest armchair I could find was US$450 which puts replacing the entire suite well into the fantasy realm. Yes, I don’t have the liquidity either! There was not a lot of choice in style either and curiously, just about everything was covered in leather which is obviously targeting the luxury market. Made in Zimbabwe? Just one chair.

Taken on trust

29 06 2009

Phil is a banker so of course I had to ask him how it was going with CABS, his employer. He admitted that very slowly things were improving but a policy change could wreck everything. I knew what he meant; I have been banking some, but definitely not all, my cash takings. I mentioned that so far I’d had no problems withdrawing whatever I needed, but yes, I was a bit apprehensive.

In the past the Reserve Bank has put limits on the amount of cash we were allowed to withdraw and on at least 2 occaisions have raided the FCAs (foreign currency accounts) of companies with failed promises to reimburse the victims. While we all have FCAs these days (well, US dollar accounts anyway) there is no guarantee that they will not raid them again – so just one minor bit of silliness from the government and the trust that keeps the banks in business would be gone – permanently!