Rate hike sparks anger

From IOL.co.za:

The latest interest rate hike of 50 basis points evoked surprise, anger and disappointment on Thursday."

This policy will have a disastrous impact on the people of South Africa," warned the Congress of SA Trade Unions (Cosatu).

Cosatu said it was "angry that the governor of the Reserve Bank and his monetary policy committee (MPC) ignored our plea not to increase base lending rates".

Nedbank said the central bank surprised the market by once again pushing up the repo rate at which it lends money to commercial banks. This was an "unfortunate overcorrection" of rate cuts made in August 2004 and April 2005 amid evidence of the economy overheating, the bank said.

The Pam Golding Property group described the MPCs move as disappointing - "particularly given the fact that all the basic macro-economic fundamentals are strong".
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NVDL: In the post below I was saying that logic can be dangerous. Especially when logic is relative to a restrictive context. Here's excellent evidence of that. Anger at an interest rate hike when spending, debt, inflation etc are virtually out of control.

The evidence is overwhelmingly in favour of our community learning to 'tighten its belt (collectively). That's an expression for efficiency, streamlining, saving, holding back, living within one's means, being more humble and less extravagant and self indulgent.

Get used the emotional response though. Anger is how people will respond when the lights go out, and petrol stations start to burp. This is going to happen with increasing frequency. On the electricity side, we know that because Eskom is warning us. On the fuel side, well, Peak Oil people have been saying it for years. By the way, that alarmist doomsday stuff is becoming mainstream now (in the same way that $70 oil is mainstream).

What we'll see is society adapting in some way to these costs, but obviously a fraction falls away as it doesn't have the resources. These people basically become economic losers. They will become a rising tide (think of strikes, unions, eventually communities) demanding cheaper everything, jobs, plenty of other things to relieve their misery. And of course, government will be able to do less and less. This is unfortunately not a story with a happy ending. Peak oil predicates a downward supply curve, so the only way to resolve this is to scale down what we are doing, start farming, dismantle suburbia, cycle to work, that sort of stuff that seems warm and fuzzy but ultimately unrealistic. believe me, it's real. It's here.

The more we resist these signs, the more angry we'll become as we see that we cannot perpetuate the myth of unlimited energy. There are limits to everything, including our own capacity to deluse ourselves.

For background visit all 3 important sites TODAY:
1. The Oil Drum
2. Global Public Media
3. No Impact Man