plonkee money

December 15, 2008

panic not – even a recession has opportunities

Filed under: banking and economics — Tags: , , , — plonkee @ 8:50 am

Capitalism thrives in anarchy.

Zimbabwe is not the worlds best run economy. Official inflation runs at the millions of percents per annum and unofficial estimates put it in the billions. A teachers monthly salary would struggle to buy five loaves and two fishes, which still requires a miracle to make large numbers if meals from. Not that it matters because there’s nothing to buy in the shops anyway. A lack of paper money means people are restricted to withdrawing a daily amount that’s about as useful as a penny in purchasing whatever goods there are.

Still, there are always ways to make money if you look hard enough. Many Zimbabweans are economic migrants in neighbouring South Africa, and they send all sorts of things back to relatives, including parcels of food, clothing and hard currency.

How does it get back? People with minibuses take it there for a not so small fee. They also charge pretty high commission on hard currency. But there’s a real market for it and most Zimbabweans in SA want to send stuff back regularly, which means that anyone who’s in the transporting business needs to be as trustworthy or customers will dry up. It might be expensive, but so is driving back and forth crossing borders,

At the end of the day, even in the worst economic conditions there can be ways to make a living. They usually require access to capital of some kind and not everyone can take advantage of them.

None of us are likely to face the situation that currently exists in Zimbabwe. There the government is in disarray because Robert Mugabe has created a dictatorship and sent the economy to hell in a hand basket, getting away with it by trading on his liberation struggle credentials.

In contrast Britain – whose economy is heavily weighted towards the financial sector – is probably going to have a bad recession, but there are still functioning schools and hospitals, everyone will need to buy food, most people still need petrol and other goods. Even banks still need customer service advisors and investment funds need to be managed.

We’re going to be ok as long as we can keep our wits about us. Maybe it’s going to be harder to make money, save and invest, but it’s still going to be the only path to a comfortable, rich enough future.

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