I heard a joke the other day of someone going to the garage to pump up their car’s tyres and saying how it used to cost 20c to do so, but now it costs R1.00…
I guess that’s inflation for you! (cue Dad-Joke laughter!)

As cheesy as the joke may be, the reality facing the world is not to be brushed aside. Inflation – particularly food inflation – is a real and ominous threat to the livelihoods and well-being of billions across the globe. And while bringing it to within a more ‘manageable’ range has rightly been the focus of Central Banks the world over, the geopolitical threats stemming from social unrest, poverty, and hunger, are not to be flippantly dismissed.

This year alone, some 55% of the world’s population will be going to vote in their countries’ respective elections. And as the gap between the ‘haves’ and the ‘have nots’ widens ever further, the rising costs of living simply add oxygen to an already smouldering fire…

Here in Mzansi our own elections are now less than 2 weeks away, and there is not a news report, article, or social media post on the most-recent poll showing somewhat of a binary outcome – either the ruling ANC are going to take a hammering, or they are going to scrape a 50% majority. There appears to be no middle ground.

I am not going to try and predict the outcome, suffice to say the landscape has certainly shifted from previous elections. And the launch of many of the ‘splinter parties’ like MK, ACT, ATM, and others, only adds to the barrage of more extremist rhetoric – these parties all started as small factional groups within the ANC, only to have the bigger movement push back and see them mutate into opposition parties. And as they have done so, the common thread binding them all is their radical stance and revolutionary-sounding rhetoric… no wonder the media give them so much airtime!

In truth though, aside from former President Zuma’s MK Party in KZN, it is difficult to see many of them making a meaningful dent or impact on the body politic…

Despite all the uncertainty in the build-up to May 29th, our local market has been strong, our bond yields have been strengthening, and the Rand has been performing rather admirably against the world’s currencies.

Why?

The answer lies in the inter-connectedness of the global economy. Kind of like the fable of “The Blind Men of Indostan” who encountered an elephant for the first time when someone brought it to their rural village. Each walked up to the elephant to feel it and create a picture of what an elephant must look like. The one who felt its trunk considered the elephant to be much like a snake; the one who felt its leg thought it to be similar to a tree; while the one who felt its side imagined an elephant to be like a wall; and so on…
The fable concludes with the line, “And so these men of Indostan disputed loud and long, each in his own opinion exceeding stiff and strong. Though each was partly in the right, and ALL were in the wrong.”

Because so many of us in the world are hard-wired to focus too narrowly, we tend to miss the bigger picture. And that bigger picture is there to remind us of the following:

• while the risk of a global recession is possible, thus far it appears to have been avoided, or at least pushed out;
• the uncertainty we are experiencing here in SA, while unique in many aspects, is quite similar to what most of the world is experiencing too;
• although both equities and bonds have struggled through the past two years as interest rates have been climbing, the underlying value in both is not to be ignored;
• interest rates are more than likely at their peak, and the chance of the next move being them coming down is steadily growing;
• and the day after May 29th, or whatever date other countries go to the polls, billions of people still have to get up, go to work, drive their cars, make a living, and buy their groceries… and the gears of the world continue to turn!

So, while we see the events unfolding around us and try and make sense of it all, it is important to cast our gaze beyond the seemingly obvious choppy waters around us and remember the old saying that “In the end it will be ok. And if it’s not ok, then maybe it’s not the end!”