To understand your future, study Zimbabwe

Written by Ciaran Ryan. Posted in Journalism

A new book out by two economists of the Austrian persuasion is a wake-up call for those who believe Zimbabwe’s well-documented plunge into the abyss cannot possibly happen to the rest of us.

When money destroys nations book coverWhen Money Destroys Nations by Philip Haslam and Russell Lamberti is perhaps one of the most alarming books on the current state of the world to have come out in recent years. To set the scene, the authors describe in chilling detail how Zimbabwe went from 20% inflation in 1997 to 89,700,000,000,000,000,000,000% in 2008. I might have left out a few zeros there, but you get the point. The cause was entirely political – and, hence, avoidable. “The Zimbabwean government lived beyond its means for years, spending more than it could really afford on government programmes, including war and social security.”

It attempted to solve this problem with rampant money printing. “Money printing gathered momentum and fuelled an inflation frenzy, which poured down economic ruin upon millions of ordinary people. It ultimately led to the Zimbabwe dollar being abandoned as a currency beginning at the end of 2008.”

But Zimbabwe’s experience is not unique. In fact, money printing has become a global phenomenon that always, always leads to inflation and impoverishment. Anyone who believes that “it couldn’t happen here” had better read this book. In Zimbabwe, the money printing started slow and then, over the course of the next 11 years, spiralled out of control. The scale of the carnage wrought by this idiocy is well documented: one-third of Zimbabweans were forced into exile, repatriating funds each month to family members left behind; the government responded to food inflation by setting price controls which were promptly ignored; a black market in alternative currencies flourished as people sought to feed themselves anyway they could (hint: a bottle of whiskey holds its value surprisingly well in a hyper-inflationary environment); barter returned as a means of exchange; stores closed down; mass hunger ensued, resulting in social unrest which was promptly extinguished by the military.

On a visit to Zimbabwe at the height of the inflationary blitzkrieg, it was obvious that certain segments of the population were flourishing. The ruling party elites managed to corner the black markets in currency, fuel, flour, sugar and any number of commodities. Taxis would seldom carried more than a gallon of fuel at a time. When they ran dry, some enterprising young men would emerge spontaneously with a gas refill, dispensed from an old Coke bottle. There were daily queues for bread. Shops were barren, carrying a few bars of soap and maize flour, and for this you had to carry boot-loads of Zimbabwean dollars.

“Exact inflation became meaningless. Hyper-inflation is more a sense of being than specific rates. In Zimbabwe, no-one thought in percentage inflation. You just got a feel for it,” says Zimbabwean economist Jonathan Waters.

The real point of the book is that the same fate awaits other countries merrily printing their way out of trouble. Nor is there any easy escape for the governments of the US, Britain, Europe and Japan – whose printing machines have been fired into hyper-drive since the financial collapse of 2008. US government debt has grown by a teeth-clattering $6,5 trillion since 2008. That’s a 70% expansion of the money supply in five years, all of it legitimised by the so-called “Quantitative Easing” programmes initiated by the US administration during this time. Other major economies are likewise racing to expand their money supplies in an effort to keep the financial system afloat. “These countries are steadily adopting the dangerous policies that ultimately proved disastrous in Zimbabwe,” say the authors.

As if this were not bad enough, governments everywhere are making it increasingly difficult for ordinary citizens to conduct business and acquire and use private property without heavy oversight, regulation and taxation. And as governments struggle with their own enormous debts, the temptation to increase taxes is ever-present. In March 2013, bank customers in Cyprus with deposits larger than €100,000 had their money confiscated to bail out the Cypriot banks. The EU has already tabled a directive that would allow it to follow the Cyprus model to rescue European banks should they fail, while the US, Britain and Canada have adopted similar proposals. These countries also have their eye on private pension funds which they intend to plunder as public pension funds start to run dry. This is exactly what happened in Zimbabwe.

While a Zimbabwe-style land grab is unlikely in the developed world, a covert land grab is already underway. This is happening as a part of the Quantitative Easing programmes, where central banks print money to purchase mortgage-backed securities. As home owners are foreclosed, these properties end up in the hands of the central banks – a form of land nationalisation.

A global financial collapse is in the air. How long will it take? There’s no easy answer to that question. It took Zimbabwe 11 years to collapse after the start of its aggressive money printing programme. In pre-World War 2 Germany, it took nine years.

If this seems terribly bleak – and it is – there are boundless opportunities that arise in a Zimbabwe-style hyper-inflationary environment. This book ends with a survival plan for those who want to avoid the coming crash. For those Zimbabweans who crossed the Limpopo to South Africa, their lives improved immediately. The lessons of Zimbabwe ring true for people all over the world: cash in your pension funds and invest in something that is worthwhile; do not keep too much cash in the banks, and invest in hard assets that will appreciate as inflation accelerates; have a second passport; grow food and barter.

“Money printing and the collapse of confidence in your nation’s currency may be the greatest risk – and the greatest opportunity – you could face in your life. You can learn from those who have gone before. Make sure you are prepared,” warn the authors.

The book is written by two Johannesburg-based writers, Philip Haslam and Russell Lamberti, who is co-founder of the Ludwig von Mises Institute of South Africa. Both are clearly from the “Austrian school of economics” of which von Mises was the founder. In brief, Austrian economists argue in favour of unbridled free markets, and that involves removing central banks for the economic life of any country. Given the events unfolding before our eyes – in Zimbabwe and closer to home – the argument for removing central banks has never been more urgent.

The only thing we learn from history is that we learn nothing from history – Friedrich Hegel

I was liquidated over fictitious R7 million loan, says Durban businessman

Written by Ciaran Ryan. Posted in Journalism

In what must rank as one of the most bizarre legal cases in recent times, Durban-based businessman Ian Brakspear had his family business liquidated in 2009 for a R7 million bank loan he says he never asked for or received, writes Ciaran Ryan.

And, he claims the signature on the liquidation order that stripped him of everything he owns has been forged. It’s not just Brakspear saying that. The police and a top-flight forensic investigator agree with him.

Either he is a delusional – as the opposing attorney claims – or he has stumbled on something rotten in the justice system.

Brakspear, as you can imagine, is pretty angry at the unfortunate turn his life has taken of late. The R7 million which was supposedly loaned by Nedcor-owned Fairbairn Private Bank in Jersey to the Westley Trust, of which he was a beneficiary, is a complete fiction, he says.

“The loan never happened. It was all based on fraud. From start to finish. I’ve been cleaned out.”

Up until this point he was a reasonably wealthy man – a successful futures trader, and beneficiary of a UK brewing business established by his father.

He was doing alright. He once owned a beautiful 87ha wine estate in Franschoek, with the Ruperts as neighbours on the one side and Tokyo Sexwale on the other.

What could go wrong?

Well, as it turns out, just about everything. Today, Brakspear – having lost just about everything in the liquidation – is now under threat of losing his house and whatever else he still owns. He went from millionaire to pauper in the blink of a banker’s eye and was forced to send his mother to the UK where she now lives in a friend’s garage.

Declaratory order

We’ll get to how the liquidation came about in a minute. But let’s fast forward a bit. Brakspear is now seeking a declaratory order from the Durban High Court to determine whether a liquidation order based on a forged court registrar’s signature is legal and binding or null and void. If null and void, then he will apply to have the whole liquidation set aside. If legal and binding, he will then apply to have the liquidation set aside on the grounds that it was based on a fraud.

Should he succeed in his declaratory order, the ensuing damages claims against Nedcor and its subsidiaries should be large enough to melt a few faces at Nedbank’s head office at 135 Rivonia Road in Sandton. Even if he doesn’t succeed in the Durban High Court, he plans on taking the case all the way to the Constitutional Court. Nedcor’s attorneys say he doesn’t stand a snowball’s hope in hell, and are now preparing to sequestrate him.

How did Brakspear end up in this position?

This all goes back to 2008 when West Dunes Properties 5 (Pty) Ltd, the company set up to acquire the wine farm in Franschoek, was placed in liquidation. But let’s wind back the clock to happier times, around 2003, when money was seemingly plentiful and the property boom was in its infancy. The Franschoek farm – called Klein Normandie – came on the market, and Brakspear teamed up with some partners to acquire and develop the property. They approached Nedbank Private Bank to see if they could raise a mortgage bond, and the subject turned to offshore structures and how everyone was doing it. Brakspear already had an offshore trust, the Brakspear Trust, registered in the Isle of Man. These were the days when South Africans were being suckered into shady offshore structures they knew little about. Smooth talking bankers were parachuted in to Johannesburg and Stellenbosch to round up the suckers and ship their money abroad where they could be fleeced for outrageous fees.

Brakspear was persuaded to move funds from the Brakspear Trust in Isle of Man to Fairbairn Private Bank in Jersey. Noseweek covered the story in 2010, showing how convoluted was the structure set up by the bankers: “The bank would set up a new trust, the Westley Trust, which would invest the money in a specially created company on the British Virgin Islands, which would provide a bank guarantee to a South African holding company, which would borrow the money locally (using the guarantee) to buy the shares in another company, West Dunes Properties, set up to buy the farm.”

Brakspear had no idea what was going on, but he slept soundly believing he had the best bankers money could buy on his side.

When the bankers decided to fire the old trustees and replace them with trustees of their own, Brakspear didn’t bat an eyelid. He thought they knew what they were doing. After all, they were his bankers.

In anyone’s book, this is a disaster waiting to happen. Having bankers as your trustees while arranging bank loans and guarantees on your behalf….

“Yes,” concedes Brakspear. “I woke up too late.”

Disaster arrives

The disaster wasn’t long in coming. The trust secured a guarantee of £500,000 (then worth about R7 million) which made it possible for RMB to advance a mortgage loan for the wine estate. Brakspear later found out that his partners had paid R4 million more for the farm than they let on, and pocketed the difference. He eventually booted the partners, only to find that the farm itself was a black hole that swallowed money faster than it coughed it out again.

It wasn’t long before West Dunes fell behind on its bond payments, and RMB called up the R7 million guarantee.

It was all downhill from there. Brakspear attempted to sell the farm and rid himself of the headache. He found a buyer for R37,75 million – a good R18 million more than he paid for it. That would have been an elegant exit from an otherwise fraught business engagement, but then MD of Fairbairn Trust, Justin Thomas, let on to the buyer that this was a distressed sale.

Enter the vultures. The R37,75 million offer suddenly disappeared and RMB attached the farm and put it up for auction at R18 million. The same buyer who previously offered R37,75 million managed potentially to save himself R18 million simply by withdrawing his offer and picking up the farm at auction.

Brakspear’s UK counsel, Adv Philip Sinel, sums up his argument in a letter to the opposing counsel: “The first major falsehood put forward by the Fairbairn group was designed to produce some excuse for bankrupting West Dunes and thus preventing suit against the Fairbairn Group for damages consequent upon its breaches of trust.” (This relates to Justin Thomas’ cock-up wherein he let the buyer know the farm sale was distressed, thereby reducing the potential sale price from R37,75 million to R18 million).

And, Sinel again: “…the Fairbairn Group and its advisors have now invented an indebtedness by Westley to JAMBOT (the Brakespear family trust).”

What Sinel is saying is that the Fairbairn Group were terrified Brakspear would come after them for the R18 million loss in property value caused by Justin Thomas’ indiscretion. According to Brakspear, they then decided the best defence is attack: liquidate him and suck the oxygen out of his lungs.

Liquidation

ENS brought the application for liquidation in December 2008, brandishing an affidavit from one Nico Theo Botha, who purported to be chairman of BOE (a Nedbank acquisition) which, according to the Hawks, he most certainly was not. Botha claimed that Westley Trust had advanced the R7 million in June 2008 to West Dunes at the “latter’s special insistence and request” and that the loan was was due and payable in December 2008 and was now in default.

Brakspear was the sole director of West Dunes. He would surely have known whether or not he had asked for and received an amount of R7 million. This is where it gets murky.

“I was the only person who had the authority to bind West Dunes to any contractual obligation,” says Brakspear. “I had no knowledge of this loan, and West Dunes made no request for this loan, made no board resolution to authorise any borrowings or enter into a loan contract and absolutely did not sign any loan contract. These are the documents I have been asking to see for five years, plus proof of payment and bank statement depicting payment of this loan. To date I have received nothing. Zilch.”

There is no dispute that RMB called up a guarantee of R7 million on 5 July 2007 and the money flowed out of the Brakspear Trust via Fairbairn Private Bank to RMB to reduce the bank’s mortgage bond exposure on the wine estate. Brakspear had no problem with this – he wanted to get rid of the wine farm and reduce his exposure to the bank. But this money belonged to the Brakspear family trust. In other words, says Brakspear, it was family money. It was not a loan. The records show it was reflected as a distribution from the trust to Brakspear. When West Dunes was liquidated in 2008, this distribution suddenly became a loan that was owed to the bank. The liquidators of course have an entirely different view of this, and argued that there was indeed a loan that had been made, and that Brakspear is trying to fudge the issue with futile legal arguments.

That’s not your money, it’s ours

If this sounds all too weird and complex, hang in there. What Brakspear is saying is equivalent to a bank paying you out your own hard-earned money, and then coming back to you 18 months later and saying the money you took is not yours, it was a loan and now you better pay it back.

So where is the loan agreement? I visited the offices of ENS and spoke to attorneys Leonard Katz and Justine Hoppe, who represented Nedcor in this matter, and put the question to them.

I was shown a loan facility agreement made out by Fairbairn Private Bank in Jersey (later acquired by Nedcor) and Fairbairn Trust re: Westley Trust, reflecting the fact that a facility for R4 million had been made available. This was dated May 2004, and was in any event repaid by the Brakspear Trust on 30 July 2008. I was also shown a “guarantee and indemnity” in consideration for certain bank facilities made available to the Westley Trust by Fairbairn Private Bank. It was undated and unsigned by the Fairbairn Private Bank representative.

But still no loan agreement for R7 million.

“You do realise that loan agreements do not have to be in writing,” said Katz.

Huh? You mean a bank will lend R7 million based on a handshake?

Katz: “Is there a nice neat loan agreement that says here are the parties that on such a day the loan was (advanced)? No there’s not. We made a best assessment as lawyers where the contractual relationships lay. There’s no doubt in my mind that Westley Trust is a creditor.”

Brakspear is buying none of it. He has accused the Nedcor group of perverting the course of justice to secure a fraudulent winding up order.

Evidence

These are serious accusations against a bank with deep pockets, so Brakspear had better have some convincing evidence to back up his claims of fraud and skulduggery.

As it turns out, he does. Let’s start with the Hawks, the elite police investigations unit.

The first question we need answered is whether Judge Balton actually granted the provisional liquidation order in the Durban High Court on 23 December 2008. Here’s what the Hawks found:

Exhibit A: High Court stenographer and IT manager, Strinivasan Naidoo, claims in an affidavit presented to the Hawks that there is no record of the Brakspear liquidation case ever taking place in the Durban High Court on 23 December 2008. This was the date that the provisional liquidation order was supposedly granted. This order was made final in February 2009, and there is a transcript available of this hearing. But what actually happened in court on the day of the provisional liquidation hearing is hotly disputed. Naidoo says Judge Balton presided on other matters on that day, but not the Brakspear case.

(Katz says in his replying affidavit that the matter was heard in chambers by Judge Balton on 23 December, and the provisional liquidation order was granted that day. ENS typed up the order, as is common in such cases, and took it to the court registrar for signing, though he has no recollection of who signed.)

Exhibit B: Court Registrar Chetty who supposedly signed the provisional liquidation court order for the Brakspear case on 23 December 2008 confirms in an affidavit to the Hawks that the signature on the court order is not hers and has been forged.

Exhibit C: Forensic document examiner, Yossi Vissoker, says the signature on the court order is not by the hand of Ms Chetty and, after comparing it to her actual signature, adds: “the dissimilarities are shocking.” After examining several other court orders supposedly signed by Ms Chetty, he goes on: “The need to forge Ms Chetty’s signature wasn’t a once off occasion, but an ongoing occurrence in the court. The purpose of which is unknown to me.”

This in itself should set the entire Durban court system alight. Of course, it may be that other people in the office are signing on behalf of the registrar, but forging Ms Chetty’s signature?

It begs the question: how many liquidation orders with forged signatures have been issued by rogue elements operating out of the Durban court?

But wait, there’s more.

Exhibit D: An affidavit by Lt Mbhele, the Hawks’ investigating officer, states: “When the liquidation was eventually heard at the high court, it is clear that most of the documents have been created. The signatures on important documents are fraudulent and I base this on the statements of the responsible officials.”

The court officials interviewed by the Hawks found the documents riddled with flaws, while there is no record of the hearing ever having taken place.

There is no dispute that the lawyers actually turned up at court on the day of the provisional liquidation. Leonard Katz and Justine Hoppe of ENS were the appointed attorneys for Nedcor, with counsel Brendan Manca SC and Juliette Nicolson assigned the task of arguing the bank’s case in court. Brakspear’s attorney Fiona Scott and his appointed counsel Sydney Alberts also showed up.

What happened next is something of a mystery. Brakspear says he opposed the winding up order from the outset, and instructed his lawyers accordingly. If this is the case, his lawyers defied his instructions and sold him down the river. In an affidavit drafted last year, Brakspear’s then attorney Fiona Scott says she phoned her client from the court on 23 December 2008 to keep him apprised of developments and that “despite us opposing the merits, it would be to the advantage of West Dunes Properties to consent to the Order being taken….” This would mean the farm would no longer go on auction for R18 million, but could be sold to the Rupert-controlled company Applemint Properties 9 for a much fatter R25,2 million. Brakspear, after being briefed along these lines, consented to the order being granted, according to Scott.

No so fast, says Brakspear. “I always opposed the liquidation. I would never consent to a provisional liquidation that was based on fraud.”

But it was too late. Judge Balton granted the provisional liquidation order…or so it seemed.

Exhibit E: Does Judge Balton remember the case perchance? Apparently not. In a letter to Brakspear deputy Judge President Jappie says he spoke to Judge Balton and the registrar for Judge Gorven (who gave the final liquidation order) and neither recall hearing the matter.

I asked Katz about the accusation of the forged signatures on the court order, as alleged in the Hawks investigation: “It’s complete crap, man. Have you read the affidavit? It’s totally fucking illiterate.”

Katz further says it is not his responsibility to attend to court administrative issues. “If there’s something funny going on in the registrar’s office how can it be my fault?”

And: “There’s only one thing more delusional than Brakspear and that’s…Lt Mbhele’s letter, it is beyond belief.”

I put it to him that his paper trail in this case was not clean. “My paper trail is completely clean,” he fired back.

The Hawks investigators twice held meetings with Nedbank and Nico Theo Botha, the employee who deposed on behalf of the bank. Botha was represented by his lawyers at these meetings, according to the Hawks.

“I have found out that there is no copy of the request by West Dunes for a R7 million loan from Westley Trust in June 2008,” according to a statement from Lt Mbhele of the Hawks.

“There is no copy of proof of R7 million payment by Westley Trust Jersey to RMB in or about June 2008.

“There is no copy of receipt of R7 million by RMB in or about 2008.”

Further, the Hawks found no evidence that the Westley Trust had R7 million in the first place to lend to West Dunes, and – damningly – “there is no evidence that Nico Theo Botha was the chairman of BOE, no evidence that Nico Theo Botha had personal knowledge and could swear positively to the facts contained in the affidavit (presented in the liquidation hearings).”

What will an attentive judge make of all these facts? Brakspear attempted to have his case heard late last year, but the judge said his papers were missing. Another strange twist to this tale. Brakspear says they were not missing. “They were sitting all correctly filed in the senior court registrar’s office. Someone had created a file – what the registrar called a ‘dummy file’ and placed that dummy file in front of the judge. They tell me it is an old trick to delay the matter from being decided on. The Court Registrar, a Mrs Bothma, has got both the dummy file and the original file under lock and key and the offices of the Minster of Justice and Chief Justice have been notifed of this irregularity. ”

In any event he has since taken on a new attorney to help him get the case heard in an open court. He also plans to take on Fairbairn Private Bank (acquired by Nedcor) in the UK courts. This, after all, is where his trouble all started.

We await with interest the court’s deliberations on this rather fascinating case. Either Brakspear is delusional as the opposing attorney says, or has the bank attempted – as Brakspear alleges – to pervert the course of justice?

Watch this space….

View at source.

 

My brush with black magic

Written by Ciaran Ryan. Posted in Journalism

“Do you believe in black magic?” asked Tinus, a well-educated Ghanaian who has travelled abroad and now worked as an accountant for one of the larger companies in Accra.

“What do you mean?” I was a little stumped by this non-sequitor.

“In Ghana, we have bad people who cast evil spells so they can take away all your money, or steal your wife or your job.”

Tinus professed to be a devout Christian and I had visited his church with him in Accra, where he is revered as an elder. We had been working together on a gold concession that had produced handsomely for several months, until the gold suddenly dried up. I accepted this as an inevitable fact of geology, but Tinus was trying to convince me that I had been cursed.

“A preacher friend of mine contacted me this week and told me he had a vision. He knew we were mining gold, and that the gold had suddenly stopped coming. He is a man I have trusted for a long time. He told me that ju-ju men are taking the soil on which you walk and using it to make black magic, so the gold disappears and then you give up and walk away from the site. Then they will come and continue mining, so they can collect the gold you leave behind.”

The conversation was getting stranger by the minute. “Who do you think is doing this?” I asked.

“Frank, your foreman.”

“Frank! Impossible. He saved us many times from doing stupid things. Look,” I said. “I judge people by their actions and their results. Frank is the best thing that has happened to us. I cannot accept what you are saying.”

This had turned into a bizarre and somewhat alarming discussion, the intended effect of which was to poison me against Frank. I was aware of the petty jealousies that can sometimes arise between colleagues and co-workers, but this was a stretch too far.

“What I want to do,” said Tinus, “is bring a pastor with experience in these matters to reverse the spell that has been cast on the site.”

“Do what you want,” I replied.

The feticheur’s curse

Years earlier in Congo, while prospecting for diamonds there, I fell seriously ill with malaria and typhoid, losing 10 kgs in two weeks. My Congolese colleagues were convinced that I had been cursed. They regaled me with horrifying stories of feticheurs as they called them (witchdoctors) raining death and misery on their targets.

As my colleague Dominique told it, one man had approached a feticheur to solve his money problems. He was told to dig a hole in a certain pre-determined spot, wherein he would find an abundance of diamonds. Apparently all this worked out as planned. But the hapless individual, now rich beyond his wildest dreams, was told he should never again sleep on a bed. He had to sleep on the floor. Years later, while in the capital Kinshasa, he got drunk and was carried by friends to his hotel room. He woke up in the morning and, realising he was in a bed, had a heart attack and died on the spot.

Fantastic stories such as this keep alive the lore and mystique of black magic across Africa. In Ghana, the artisanal gold miners (known as galamsey) often turn to ju-ju to tilt the tides of fortune in their favour, but you seldom meet a successful galamsey. Success, in my experience, is more likely to favour those who prospect. The interest in black magic is still very much alive, though not nearly as robust as it was 50 years ago.

There are, however, some cultural peculiarities which are hard to explain. Luba women in Congo’s Katanga province are renowned as particularly faithful. If they are unfaithful to their husbands, Luba culture dictates that they may not return under the same roof as the husband, or else terrible tragedy will be visited on her, the children or the husband. In Mbuji Mayi, in Katanga province, there is a quarter housing unfaithful women who have deserted their families for fear of bringing disaster to their former homes. They often survive by prostitution, as if to confirm their diminished social status. I spoke to many Luba people about this, and there was no doubt in their minds that this cultural edict was so powerful that tragedy was certain if a Luba woman was unfaithful.

My conversation with Tinus sat uncomfortably with me for a few days until I could bear it no longer. Frank, in addition to being our foreman, was my friend. I discussed the matter with my Russian partner. We had noticed a change in Tinus’ demeanour of late, a kind of demonic greed that incubates and breeds in people of unsound mind.

What was Tinus’ plan? Did he want to cleave Frank away from us and then steal our mining equipment? My mind swirled with dark imaginings.

We decided to come clean with Frank.

Frank was outraged. “If God put the gold there, how can a ju-ju man take it away? If there is no gold there, it is because God did not put it there in the first place.” This was the sanest reading of the situation I had heard in weeks.

To accuse someone of witchcraft in Ghana, or anywhere in Africa, is no laughing matter. Frank reported the accusations to the chief of the village, who immediately summoned Tinus to account for his behaviour.

The village court

Tinus arrived the next day with wife and pastors in tow. To refuse a summons from the chief is likewise a serious matter.

The charges were read out against Tinus, his head bowed in shame.

One of our workers, it turned out, had spread the rumour that Frank had been involved in black magic for many years, that he had built his house over the corpse of a dead man, that someone else had died in one of his mining pits, and that he had invoked ju-ju spells on our mining site.

The chief turned to the worker from whence the rumour sprang: “When you first came here, your words were sweet. Now they are so bitter. Why is that?”

The worker, let’s call him Kweku, sat in stunned silence at the charges levelled against him.

The chief continued: “I myself am an elder of the Pentecostal church here. It was I that blessed Frank’s house when he started to build. Where did you get this information about black magic?”

Kweku denied emphatically that he was the source of the information.

The chief fired back: “I have a witness standing outside that I can call that will say you started the rumour.”

Kweku, Tinus and his wife Abigail suddenly fell to their knees to beg Frank for forgiveness.

Begging for forgiveness in Ghana is an admission of guilt.

Frank asked the supplicants to rise from their knees and in ceremonial flourish, granted them forgiveness.

A little later it was reported to us by a security guard at the site that Tinus had despatched two pastors to conduct their rituals to undo the supposed curse.

“Now the gold will appear,” proclaimed the pastor.

Emboldened by the pastor’s divine assurance, Tinus immediately shipped a dredge to the site to claim the gold he was promised would appear.

Our relationship with Tinus had soured beyond repair, so we watched events from a distance.

The daily tally of gold recovery was reported to us by our security personnel: one gram, two grams, four grams. Barely enough to pay the diesel to operate the dredge or pay the workers.

“They have failed totally,” laughed Frank, as we sat one evening to discuss the episode. “I told them that if God did not put the gold there in the first place, then they will find nothing. And so it is.”

And so it is.

Riot alert: look out Argentina, South Africa, Turkey and India

Written by Ciaran Ryan. Posted in Journalism

If history teaches us anything, it is that inflation usually ends in violence.

The Johannesburg-based economic research house ETM Analytics, which has a strong Austrian bias, puts out a monthly “riot alert” based on the speed with which countries are debasing their currencies. It has been scarily accurate in predicting where trouble is most likely to erupt.

The research shows that those countries printing money the fastest are also those experiencing the most social unrest. ETM measures inflation in terms of the Continuous Commodities Index (CCI)*, which reflects inflationary trends almost immediately on the basis that monetary expansion debases the currency and increases the prices of commodity imports such as fuel and food.

Look who’s on the danger list: the world’s worst monetary abusers

 

 

 

Continues at source….

 

 

 

Proof that inflation leads to violence

Written by Ciaran Ryan. Posted in Journalism

inflationNEW research appears to show a direct link between inflation and South Africa’s social violence. In the months before the Marikana massacre, in which more than 30 miners died, there was a spike in nondiscretionary inflation — the inflation the poor experience — from 3% to more than 10%. The same is true of the xenophobic attacks in 2008. Just before these attacks, nondiscretionary inflation surged to 20%. The recent violence in Sasolburg was also preceded by an acceleration in inflation.

Chris Becker, an economist with ETM Analytics, which produced the research, says SA could be headed for a world of trouble based on recent trends in the inflation rate experienced by the poor.

The consumer price index (CPI) averaged 5,6% last year, while average nondiscretionary inflation was 6,1%, spiking to 10,3% in October. The difference between the two inflation rates may appear marginal, but it is the volatility of nondiscretionary inflation that seems to be causing the trouble.

Nondiscretionary inflation hits the poor hardest. It is more volatile than the CPI, which is smoothed by the inclusion of items such as mortgage and technology costs. Taking these discretionary or luxury costs out of the calculation, ETM came up with what it calls nondiscretionary inflation.

 

Continues at source:

 

Apartheid’s social engineers are still among us

Written by Ciaran Ryan. Posted in Journalism

Apartheid Museum 4 by Alejandro Gabriel Alonso

Social engineering gone mad
Photo: Alejandro Gabriel Alonso
Flickr.com

More than 20 years have passed since Nelson Mandela was released from prison, yet many – if not most – South Africans still labour under the falsehood that apartheid was a kind of Frankenstein creation spawned by Puritanical Afrikanerdom.

It was anything but. Scholarship on the origins and ideological praxis of apartheid has tended to focus on the political rise of the National Party in the years leading up to 1948 as a kind of spontaneous flowering of racial hatred directed at black South Africans. Unless we search for the truth behind this terrible chapter in South Africa’s history, schools will continue to spout half-baked slogans as a substitute for actual history. That would be a pity.

One need only read pre-apartheid South African history to know that racial harmony was fairly common in many parts of the country where government influence was weak.  Lawrence van der Post in Lost Sands of the Kalahari writes that he never witnessed apartheid in practice until he visited Natal as a young man in the early 1900s. Throughout much of the 1800s, commerce, trade and even inter-marriage between black and white was fairly common in areas such as the Eastern Cape.

Yet it remains true that most groups do practice some form of discrimination, however benign, in favour of their own. Muslims and Jews prefer to marry within the faith, though even here the tendency is towards assimilation.

Apartheid, however, was something entirely different. It was an effort to define a person’s identity in terms of racial science – hence, the ridiculous “pencil test” in the hair to determine whether a South African was black or white.

The story of apartheid is one of racial science. Most South Africans have heard of Hendrik Verwoerd, who is generally credited as the architect of apartheid. He left for Germany in 1926 to study at the universities of Hamburg, Berlin and Leipzig, around the time that Nazi ideology had congealed around the failed artist, Adolf Hitler. Verwoerd was swept up by the radicalism of the Nazis though – and there is some dispute about this – he distanced himself from the Nazi obsession with racial genetics. He saw no real biological differences between the races, believing environmental factors were behind the “development of a higher civilisation by the Caucasian race,” as historian Herman Giliomee points out in his recently published book The Last Afrikaner Leaders.

Though born in the Netherlands, Verwoerd was an Afrikaner nationalist, obsessed with solving the problem of the “poor white,” which was a legacy of the Great Depression and the ingress of cheaper, black labour to the mines. He resolved to leave his mark upon this world with his grand scheme of racial separation as a kind of grotesque monument to the Old Testament. Giliomee believes Verwoerd was singled out for demonisation by the ANC, but was quite favourably received elsewhere.  “A week before his death Time magazine described him as ‘one of the ablest white leaders’ Africa has ever seen. The Financial Mail published a special edition, entitled ‘The Fabulous  Years’ on the period 1961 to 1967, when South Africa grew by 30 per cent in real terms,” writes Giliomee. “There are many misconceptions about Verwoerd. It was not his stance on apartheid that won him staunch support among Afrikaners but his unexpected success in winning a republic. In private he was remarkably flexible about apartheid.”

Giliomee does not dwell much on the cult of racial science, perhaps assuming that its role in shaping Afrikaner politics in the last century is over-stated or now irrelevant.

Szasz and the myth of mental illness

Written by Ciaran Ryan. Posted in Journalism

In 1961, the late, great Thomas Szasz wrote a book called The Myth of Mental Illness.

He followed this classic with several more, notably The Manufacture of Madness and The Therapeutic State. He was a brave man, viciously attacked by his psychiatric colleagues in the 1960s and 1970s, but he persisted with his exploration of truth and liberty. Szasz was born to Jewish parents in Budapest in 1920 and moved to the US in 1938. He studied medicine and psychiatry, and served two years in the US Navy in the 1950s.

What is astonishing about Szasz, like the Polish-born author Joseph Conrad, was his mastery of the English language. Szasz spoke not a word of English when he first arrived in the US (Conrad only learned English in his twenties when he moved to the UK). It was the author Bertrand Russell who alerted Szasz to “the beauty and power of incisive and unpretentious English prose.”

Szasz, who passed away last year, was a frightening adversary in debates, and few colleagues dared take him on. He was funny, caustic and ridiculed the absurdities of modern psychiatry: “If you talk to God, you are praying. If God talks to you, you have schizophrenia.”

He averred that psychiatry was unique among all professions in its capacity to commit people who have done no wrong to insane asylums by way of involuntary commitment (imprisonment). As such, it should more properly be labelled a branch of law than medicine. He was not against psychiatry per se, only what he called coercive psychiatry.

Szasz punctured the bloated pomposity of modern psychiatry by exposing its lack of scientific rigour. He coined the term “therapeutic state” to describe the control the state has assumed over one’s body, including the prohibition on self-murder. Suicide, he declared, is the most basic human right, as is the right to ingest psychotropic drugs or battery acid. Not that he advocated these positions – he was all about personal responsibility for one’s own decisions, good, bad or dangerous.

Szasz did a wonderful job of documenting the absurd history of this pseudo-science. Benjamin Rush, the founding father of American psychiatry, declared negritude (having a black skin) a disease, a form of leprosy. Fast forward 200 years and homosexuality became the disease du jour of the psychiatric movement. Fast forward a couple of decades, and kids fidgeting in class were labelled ADHD, drugged and zombified.

“Psychiatry…attached medical-sounding labels (“diagnoses”) to certain unwanted behaviours, exemplified by masturbation and homosexuality. Then, conflating diagnoses with diseases, they claimed to have discovered new brain diseases (Szasz 1991). In fact, they did no such thing. Instead, they medicalised human problems traditionally perceived in religious terms, transforming sins and crimes—such as self-murder, self-abuse, and self-medication—into sicknesses,” wrote Szasz.

This is where his forensic approach to language was brought to bear with such powerful effect. Like Voltaire, he demanded that the terms being used be properly defined.

There is no such thing as mental illness, declared Szasz, since it fails the standard scientific test for disease, as established by the German physician, Rudolf Virchow (1821-1902), the originator of cell theory: a disease is a bodily lesion, objectively identifiable by anatomical, physiological, or other physicochemical observation or measurement. In other words, for an illness or disease to be present, it must be observable at an anatomical level, such as under a microscope.

Cancer, pneumonia and tuberculosis all meet this test. Schizophrenia, bipolar disorder and Attention Deficit Disorders do not. These are simply forms of “misbehaviour” that psychiatrists have labelled and medicalised.

In fact, no mental “illness” satisfies the standard definition of disease. As pointed out by psychiatrist Peter Breggin, author of Toxic Psychiatry, there is no such thing as a chemical imbalance in the brain unless one starts taking anti-depressants or anti-psychotic medication. None of the hundreds of other disorders from the Diagnostic and Statistical Manual (DSM), which is the psychiatrists’ billing bible, meet the standard definition of illness.

Psychiatry hated Szasz for pointing this out.

In the space of a few hundred years the world has moved from theocracy to democracy to pharmacracy, he wrote. In times past, when people felt depressed, they talked to a friend, priest or doctor. Now they get prescribed anti-depressants. As Breggin points out, the most dangerous time is when you are first put on these medications, and then when you try to get off them. The withdrawal symptoms are horrendous. In Toxic Psychiatry, Breggin explains what happens: “Combining antidepressants [e.g., Prozac, Luvox] and psychostimulants [e.g., Ritalin] increases the risk of cardiovascular catastrophe, seizures, sedation, euphoria, and psychosis. Withdrawal from the combination can cause a severe reaction that includes confusion, emotional instability, agitation, and aggression.” Add to that suicidal thoughts and potentially violent behaviour.

All this is relevant in light of the recent mass shootings in the US. Virtually all shooters of the last decade have been on “therapeutic” levels of psychiatric drugs, something the mainstream press has belatedly recognised.

Tragic though these killings are, Szasz would at least be satisfied that psychiatry is at last getting the kind of spotlight it deserves.

Jon Rappoport over at lewrockwell.com spells this out brilliantly.

Kwame’s incredible tale of survival at sea

Written by Ciaran Ryan. Posted in Journalism

illegalimmigrants by clandestinaparis

The boat people
Photo: clandestinaparis
Flickr.com

I remember the day I found out that Muammar Gaddafi, Libya’s former leader, had been killed.

I was in the Bosua Beach Hotel in southern Ghana when CNN ran one of their “breaking news” inserts: endless repetitions of sparse facts and interviews with babbling heads offering wild and unfounded opinions about what would happen next.

I met many black Africans who had worked in Libya. The money was good, they said, but their treatment was abysmal. They were never anything but second class citizens. Police would stop them because they were black, extort bribes, and often deport them. The Africans put up with this because the money was better than anything they could earn back home, or because their ultimate destination was Europe.

The frayed cords of racial harmony held in check by Gaddafi’s men snapped once NATO unleashed the dogs of war. When the bombs started raining down over Tripoli and gangs roamed the streets in search of targets, the Africans turned for home and ran. They boarded buses for Mali, Burkina Faso, Niger, Ivory Coast, Nigeria and Ghana. Some clambered aboard boats bound for Italy.

Their dreams of a better life incinerated around them in a matter of days.

One returnee had an interesting story to tell. His name is Kwame, and he is 27 years old. He is one of 23 survivors from a boating catastrophe that killed more than 260 people attempting to cross from Libya to Italy in 2008.

That he survived a horrible boating disaster at sea is remarkable enough. But tragedy struck twice in the space of three years when the Nato bombs started falling in 2011, and he was forced to flee Libya for his home in Ghana.

Kwame has a look of self-assurance that sometimes inhabits those who have faced the worst of all possible endings, and somehow lived. God had a purpose for him, he assured me. That is why he was spared.

He had an easy smile and a gentle manner. Some weeks earlier I had hired him to do some construction work, and I was impressed with his work ethic and endurance. The other workers called him “Libya bugger” and I asked why so.

Zuma Exposed: Book Review

Written by Ciaran Ryan. Posted in Journalism

South African President Jacob Zuma addressing the African National Congress leadership meeting in Durban on September 20, 2010. Zuma reaffirmed leadership of the ruling party amid an ongoing debate over the future of the national democratic revolution. by Pan-African News Wire File Photos

Kept man: Jacob Zuma
Photo: Pan African News Wire
Flickr.com

Jacob Zuma is a man of gargantuan appetites. According to Gareth van Onselen, a senior analyst with the Democratic Alliance (DA), Zuma has cost the South African taxpayer R754 million over five years, broken down as follows:

R12,3 million       Salary over five years

R6,5 million         Medical aid

R2,75 million       Pension fund

R77,6 million       Spousal support

R3,67 million       Private vehicle

R234 million        VIP flights

R10 million          Additional flights

R72 million          Helicopter flights

R8,2 million         Ferry flights

R26,5 million       Accommodation – official residences

R238 million        Private residence

R60 million          VIP protection

R2,1 million         Hotels

All of this is detailed in Adriaan Basson’s newly released Zuma Exposed. It makes for disturbing reading.

Turn the page and we find that Zuma has six wives, four girlfriends and 21 children.

Turn the next page and we find his sons, daughters and wives involved in upwards of 70 companies, trusts or foundations. There is hardly a corner of the South African economy that his patrimony has not embraced.

Any utterance from the Zuma camp about the urgency of redressing inequalities in SA should be weighed against the above indictment.

When confronted with serious allegations of racketeering or fraud, the stock response is to plead a “political conspiracy.” This is precisely what de-frocked ANC Youth leader Julius Malema did when faced with charges of financial impropriety. He simply took a leaf from the Zuma playbook.

There isn’t a whole lot new in this book for those who have been following Basson over the years as a journalist at Mail & Guardian and City Press, but it is handy to have a chronicle of Zuma’s almost unbelievable journey to the top of SA politics. One is left with the clear impression that he is a ward of the state, and a costly one at that. The book details the back-room dealings that derailed Zuma’s prosecution in the arms scandal, his stacking of key ministries with loyal cadres, his apparent willingness to burn the village to save it, and his out-of-control libido. It’s a long fall from Mandela to here.

Former president Nelson Mandela identified Zuma as a financial problem child, and paid R2 million to help him clear his debts in 2000, as detailed by Mail & Guardian.

Here’s how Basson describes Zuma’s strange and meteoric rise from kept man to president of SA, having toppled former president Thabo Mbeki as leader of the ANC at the Polokwane conference in 2007: “He became president because enough ANC branch members believed he was the victim of a conspiracy concocted by Mbeki, the first generation of BEE (Black Economic Empowerment) millionaires and the Scorpions (the now disbanded law enforcement unit). Mbeki’s so-called 1996 Class Project was also rejected by the left, who saw him as a cold-blooded capitalist with scant regard for the plight of workers and communists. Although Zuma had no track record in the union movement, he became a Trojan horse for desperate interest groups with bleak futures. And so they pushed a compromised man to the front because he had nothing to lose and was the only ANC leader brave enough to put Mbeki, who was seeking a third term as ANC leader, in his place.”

Basson also touches on another interesting aspect of Zuma’s staying power. He ran ANC intelligence from the mid-1980s, so he has the dirt on all the top people. This was an argument that came up when Zuma was facing corruption charges related to the R70 billion (the figure keeps getting bigger) arms deal. “Zuma’s suited strategists and grass roots supporters agreed: if this man starts to talk, he could take the party down,” writes Basson. “Such speculation was fuelled by Zuma himself, who told his supporters outside court that ‘one day’ he would reveal the identities of his persecutors.”

A court has already found that Zuma was part of a corrupt relationship with his former financial adviser, Schabir Shaik, from whom he received more than R4 million in cash and benefits. In return, Shaik offered access to Zuma.  “Another court was to decide whether Zuma had accepted the money and benefits with a guilty mind. When the charges against him were dropped on the most dubious of legal grounds, Zuma had reason to be fearful.”

He took care of business by keeping the security portfolios in the clan, so to speak. Jeff Radebe became Minister of Justice, Nathi Mthethwa took over as Minister of Police, and Siyabonga Cwele was made Minister of State Security. All three were from his home province of KwaZulu Natal. Zuma protected them, even when Cwele’s wife was convicted of drug smuggling and Mthethwa “was exposed as a beneficiary of a dodgy crime intelligence slush fund.”

This book, says Basson, is not a biography. “I am an investigative journalist, interested only in the truth. Naturally, when a person is elected president of my country, I follow his every move and his money and interrogate every decision he makes in order to navigate through the bullshit and spin that South African journalists are increasingly being fed.”

In truth, Zuma has done precious little of benefit to South Africa. He has been woefully preoccupied with internecine battles in the grand cathedral of the ANC. This is the man who got off on rape charges, arguing in court that the sex was consensual, and protected himself against possible Aids infection by taking a shower afterwards. This is also the man who promised to champion a moral regeneration crusade in SA.

For those who argue that Zuma is indeed the victim of a political conspiracy, Basson provides evidence in the form of affidavits and charge sheets that at the very least cry out for rebuttal by the president.

Will he get his day in court? That remains to be seen.

That he is affable and a man of the people is beyond question. But how did a man so tainted by bad judgment and gross moral lapses end up president? It is a question that continues to baffle, even among the ANC faithful.

 

Predictions for South Africa

Written by Ciaran Ryan. Posted in Journalism

Jacob Zuma by DonkeyHotey

Jacob Zuma: Can he last past 2014?
Picture: by DonkeyHotey from Flickr.com

The ANC has backed Jacob Zuma for a second term as president of South Africa. This news comes a few days after the release of Adriaan Basson’s book Zuma Exposed, which details the interesting circle of comrades surrounding the president. It also comes a week after Mail & Guardian ran an expose on Zuma’s questionable financial entanglements.

South Africa begins to feel like Israel, or France, or dare we say Zimbabwe, where those in high positions cling to office to escape their inevitable day in court. Zuma foiled attempts to get him to answer corruption charges related to the R60 billion arms scandal, which now appears as nothing more than a luscious pension fund for the ANC. As Basson points out, Zuma was by no means the biggest beneficiary from the scandal, but he remains dangerously tainted by it.

Around him he has selected ministers and officials, many of whom are equally tainted. We have a new deputy president in the form of Cyril “zero to billionaire in 10 years” Ramaphosa who sits on more than 200 boards, covering just about every sector of the economy. How can he possibly raise his voice in any matter of national importance without there being a conflict of interest?

Zuma attempted to redeem himself against the raft of allegations surfacing against him when he dwelt on the subject of tender corruption this week, estimated to cost the country R6 billion a year. But no-one takes this seriously until he answers questions about his own role in the arms scandal and related issues, such as the R200 million upgrade to his home at Nklandla.

“Who in their right minds could have approved the expenditure of more than R200 million? And to do it in that area, where you have this nice place standing up and just around there the squalor and poverty,” Archbishop Desmond Tutu told The Star this week.