Consumers face a stormy rough tide

It deals with commercial fishermen who are caught off-guard and placed in mortal danger by an unusually intense storm.

For two hours one watches in suspense, gobbling down popcorn to keep the nerves in check, as fishermen played by George Clooney and Mark Wahlberg, battle the ocean, and just when one believes they will survive the near impossible, a monstrous wave right at the end has the last laugh.

It was a huge anti-climatic, after all, the protagonist should win right? But not this time, even though it seemed that even the battered fishing boat, when poised right on top of the titanic wave, will overcome the mother of all storms.

Is this maybe how we are beginning to feel in South Africa?

We are all also battling monstrous waves as a perfect storm wages around us.

These days, it seems our lives feel similar to navigating battering winds and torrential rain, before we are faced with another almighty wave to shake our confidence and self-belief in the enduring human spirit.

In Gauteng, consumers have been battling for some time to deal with the impact of the E-toll system, valiantly yelling at the purple gantries that it will not have the last laugh. In the meantime, petrol and electricity prices are like rolling waves flooding our bank accounts.

Then came the other ‘perfect storm’, which resulted in the water crisis in Gauteng – or at least, in the opinion of government, not a crisis, but a mere glitch that caused an interruption of supply.

The ‘storm’ was caused by power outages, cable theft and the high demand for water that comes with the summer season.

But wait, we cannot relax yet. The storm has not yet passed. Clooney and Wahlberg believed they had won, but that is when they met their worst enemy.

For us consumers, there is unfortunately a possible monstrous wave on its way to scare even worse than the All Black’s  Haka.

Independent economist Dawie Roodt and Brenthurst Wealth Management investment strategist Mike Schüssler, has predicted upcoming increases sure to put pressure on the already strained consumer.

This is a result of the weakened rand that may slide as low as R11.60 or weaker to the dollar in the near future.

This is after the rand touched a fresh eight-month low against the dollar on September 27, as the greenback extended it broad-based gains after stronger than expected US GDP data. At the time, the rand already fell to R11.2755 to the Dollar; its weakest since February 3.

While the US Dollar rock and rolls its way across the globe, one has to remember that SA is struggling in general, because it is dumped in a group called ’emerging markets’. These are countries that are still developing their economies.

For investors, these countries are high risk, but can also produce high return. This basically means that the tension between Ukraine and Russia, along with the war against ISIS, causes investors to become jittery and, therefore, pull their money from emerging markets.

SA also has a poor trade deficit, which relates to how much we import versus how much we export. The more we import, the more money leaves the country to pay suppliers.

So, taking into account that we are an emerging market, and then adding to to the money leaving because of imports, there is a lot less money in SA.

The Rand is also one of the most traded currencies on the planet, which means a lot of the currency is being traded. SA, thus, remains a gambling destination – the Rand is attractive, but at times of high risk it is also dumped.

This all adds to the perfect storm that can become a gale force wind for the consumers ability to spend. The weakening Rand is expected to have a severe impact on everything from the price of food to imported vehicles.

Schüssler also predicts a hefty fuel increase in the near future. This will mean that virtually all commodities, including essentials like food, increasing substantially.

Thankfully, the oil price has remained low, despite the ISIS crisis. This is because oil, like many other commodities, is priced in Dollars. When the Dollar is strong (as it is now) that makes the price of oil much more expensive in areas outside of the US.

Meanwhile, Roodt predicts that there would be an increase in VAT in the near future, and other forms of taxation like capital gains tax will be expanded.

Of course, this will mean dire consequences for consumers who are already around R1.44-trillion in debt.

Before the Rand weakened considerably, there was still some optimism following a EY/Bureau for Economic Research (BER) retail survey, which shows retailers expecting business conditions and sales growth to improve during the festive season.

Such optimism might now have taken a serious hit.

After all, rising food and fuel costs and slow economic-growth are making it difficult for many South Africans to pay back their loans on time, nevermind splash out during Christmas.

All that we can do in the meantime is to watch how this storm will wage around us and where the winds take us. Just maybe we will safely ride the last big waves to safety, just in time to set up the Christmas tree and carve up the turkey.