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Wow, I came across this video earlier of author John Perkins who wrote ‘Confessions of a Economic Hitman‘ and I think I’m definitely going to be buying this book.

It is amazing to see how corrupt our world is, be it here in South Africa or in the United States. The temptation that people fall for is unreal. Take a look at the first part below:

[youtube=http://www.youtube.com/watch?v=yTbdnNgqfs8&hl=en&fs=1&border=1]

I read this morning that the price of petrol is going to drop by 35cents a litre, whoopi!

Reason for the decline is the drastic decline in the price per barrel of oil currently around $60 which is the lowest its been since Feb 2007, but we aren’t getting the full decrease in the price due to the drop in the value of the Rand.

But, looking back at previous prices in March 2007 the price of petrol at the coast was R6.43/lt (data from this page) The Rand/US Dollar exchange rate was only at R7.38 to the dollar and the price of crude oil was $65 per barrel.

So why does our price only decrease to just under R9.00 a litre, you could talk about inflation and the cost of delivery etc but in just 18months inflation has caused the price to increase by R3 a litre?

The current rand / US Dollar exchange rate is at R11 to the dollar which in some way does explain the small decline but how things have changed in just a couple of months considering the crude oil price went from $65 to $150 and then back down to $60 – somewhere someone is making a ton of money buying and selling the oil…

Thank goodness, the US Gov today rejected a plan laid out to rescue the financial system in the US and supposedly link through to helping out the rest of the world. You can always rely on the Americans to first cause the problem and then have the ‘plan’ to fix everything – just throw money at it, always works.

Now, I’m not going to go into details of the credit crunch and who to blame and what America should do – I do think that the banks need to close down if they can’t keep going, in turn the US Gov should instead look after the people who have money/loans with that bank and protect them.

The BIG reason I don’t have much sympathy for these big banks is because of this

(Just Google or Live search this – ‘record annual bonus payout for Goldman Sachs’) and immediately you’ll find evidence going back just 2 years ago to record profits and amazing bonuses paid out to staff members.
link to article regarding Goldman Sachs and the article for City Bank in the UK.

Now these state that for Goldman there was an average of, and I quote,

The bank is paying $16.5 billion in compensation this year, an average of roughly $623,418 per employee

$623,418 per employee… Now I know some people who worked for Goldman Sachs at that time and they definitely did not get such a huge bonus so the guys at the top must have been bringing in the big bucks!

Another quote from the UK Papers:

The high rewards on offer in the exclusive world of Britain’s boardrooms and City dealing rooms were exposed yesterday by figures showing a jump of 16% in bonus payments this year to a record £19bn.

That is equivalent to the country’s entire annual transport budget. The Office for National Statistics (ONS) released its annual estimate of the scale of bonuses showing they rose by £2.5bn this year, following a £1.5bn rise last year, meaning they have leapt by a quarter in two years.

Now again this is ridiculous when the bonuses paid out are equivalent to the entire countries annual transport budget!

I was in the UK at the time and questioned how could the profits be soo good, why everyone wasn’t getting into that business. Now I question – did the banks know what could eventually happen and just think ‘stuff it, if its going to happen we might as well do it with a bang!’

Another article here
on Goldman Sachs ‘predicting the recession’ in Jan 2008. And here another article on Goldman’s 70% decrease in profits Sep 2008.

I hope the people that are affected by this crunch are helped out by their Gov and that the banks learn a BIG lesson and something gets done to drastically curb their ‘MASSIVE’ annual bonuses!