September 4, 2012
Every time I hear one of these western central bankers or politicians talk about how there’s no inflation, it just makes me want to vomit.
This is one of the most arrogant, disingenuous, intellectually dishonest statements one can make. And if these guys ever got off their butts and traveled somewhere, they’d see for themselves.
Case in point– here in Namibia, the country is between a rock and a hard place. Big time. Namibia’s economy is stalling. GDP growth is a mere 0.7% year over year, and unemployment has been estimated at anywhere between 28.4% to 51.2%. They just haven’t figured out which math to use yet.
Meanwhile, inflation in Namibia is becoming uncomfortably high. The official rate that the government acknowledges is at least 7%, but the street rate is well into double digits.
In the wealthy part of the world, they pretend that inflation doesn’t exist because Wal Mart cut the price of the iPhone 4S from $188 to $148. Of course, that doesn’t mean much in Namibia. These aren’t exactly the folks lining up at the Apple store.
Fact is, inflation does exist. I see it everywhere I travel. As Bernanke and Draghi print money without limit or regard for sanity, central bankers in the developing world are feverishly inflating their own currencies to keep up… and importing dollars and euros from abroad to help keep their exchange rates low.
The net result is cheap iPhones in America, but catastrophically higher prices for staple items like food and medicine in Namibia… and most of the developing world.
What a truly bizarre system. One guy in Washington has screwed entire nations of people, including, eventually, his own. One guy can do this. Just one. It seems so strange to have awarded such Herculean powers to a single individual… let alone one who is demonstrably out of touch with reality.
The world may indeed become a better place if Mr. Bernanke would get on a plane and go see, first hand, the deep strain caused by his policies around the world.
Fortunately for Namibia, the country is going to be just fine in the long-term. Despite the monetary misgivings of central bankers from faraway lands, this is still a country that’s twice the size of California with a sparse population of just 1.8 million. And it’s loaded with resources.
Long-time subscribers may recall the many letters I wrote from Mongolia, extolling that country’s economic growth potential. Whenever you have a huge country with massive resource deposits and a tiny population to divide it all up, this is a good sign.
Namibia is in a similar category… and this bodes well for the long-term. Deep down beyond its impoverished veneer, Namibia has great wealth potential.
The country already has one of the richest commercial fishing grounds in the world thanks to its cold, clean Atlantic waters. Moreover, Namibia has vast deposits of diamonds, gold, uranium, and several other valuable resources. Many of these have been exploited for years, others are just getting started.
Uranium is particularly interesting; Namibia itself is the world’s 4th largest producer of the funky metal, and output is growing every year. The Husab project alone is presently the third largest deposit in the world. As nuclear power becomes favorable once again, Namibia will benefit substantially.