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Chris Becker @chrislbecker
, 8 tweets, 2 min read Read on Twitter
Mantashe says farms bigger than >12,000ha is excess, and excess will be taken from white farmers and given to communal black farmers. A farmer friend tells me largest irrigated farms in SA only 4-6k hectares, but smallest cattle farms in Sutherland >12,000ha. Thread on economics.
Here's the article in which Mantashe is quoted; news24.com/SouthAfrica/Ne…
If government goes this route they'll be taking land in the northern cape / Karoo that literally cannot sustain life and will set up farmers who get free land for failure.
Once they realise this, they will adjust the size downward and also look at other metrics to establish which farms are fair game for govt theft. It's inevitable as clearly they believe they are the arbiter of property rights. They've got lists of land they've identified, ffs.
Funny quote is that Mantashe thinks you can separate the value of bank loans for "improvements" from loans for the "land". The land is collateral for the loans for improvements, so if you start taking from land, you're reducing value of collateral, which lowers value of loan.
In other words, if you take land, you take loan collateral, meaning you reduce the value of loan, which means you reduce value of asset against which a liability is created. THIS LIABILITY IS A BANK DEPOSIT, WHICH IS THE RAND ITSELF.
When assets decline below liabilities, you have a bank crisis as it means a bank is insolvent. At this point, central banks typically step in to bail the banks out by printing money (more liabilities) in an attempt to inflate asset values.
This, dear readers, is the anatomy of a currency collapse in a fiat, fractional reserve monetary system. By messing with property rights in the way that govt is proposing, they're putting this economy into a spiral of complex negative feedback loops that ends in epic failure.
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