No land is an island

No one should be surprised by the fears of a global economic meltdown led by the stuttering US economy.

No one should be surprised by the fears of a global economic meltdown led by the stuttering US economy.

For more than a year our news and business pages have been replete with warnings that the US, by far the world's largest economy, was living way beyond its means.

Economic analysts have long warned that the bubble must burst. And burst it has.

The laws of economics are basically simple: someone will have to pay when expenditure exceeds income. But greed triumphed over logic.

Bankers invented increasingly obscure instruments to create the appearance that all was well on the economic front and investors, blinded by greed, willingly played along.

Here in South Africa we are relatively sheltered from the looming crisis, but as a player in the global economy we too will pay.

The resources with which we are so richly endowed will no longer command the high prices that funded much of our buoyant economy and the foreign funds we need for our development will dry up.

Oil, however, the source of much of our imported inflation, will likely drop further in price. And investors will turn to the safe haven of gold in these turbulent times, boosting its price.

Now we must trust the ANC's new regime to protect our currency to help insulate us from the turmoil.

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