"The [Buddy-can-you-spare-a dime} Depression"

“The [Buddy-can-you-spare-a dime} Depression”

Sam Mwaka-karama

The Lehman Brothers and JPMorgan Chase and others – were said to have been at the eye of the spiraling down the MF Global’s - Financial Crisis of 2008/2012… also known as the’ Global Credit Crunch’ is a phenomenon that still challenges the world’s leading ‘Schools of Economics’ to this day.

The staggering ‘Wuthering Heights’ reached its pinnacle point of eventual total collapse in September 2011. When the World’s original massive mustard had come down.

The causes of the greatest global financial crises were analytically defined by leading economic analysts as being massive unscrupulous money transfers:

 “It took huge taxpayer-financed bail-outs to shore up the industry. Even so, the ensuing credit crunch turned what was already a nasty downturn into the worst recession in 80 years. Massive monetary and fiscal stimulus prevented a buddy-can-you-spare-a-dime depression, but the recovery remains feeble compared with previous post-war upturns.”  Wrote The Economist

The cause factors that broadly included European banks trading in US Bonds and, roofless credit hand-outs that were also ill regulated bank activities - at a time when there was a curious housing boom that created the bubbles – is anyway not part of this blog entry discussion.

Africa: lessons not learnt…

Roughly six years since the crisis that nearly collapsed the Global Financial Systems – Africa still largely show signs of not learning. It is not that anybody might be against practices that challenge foreign investors in say like, in my country Uganda – no! Far from it!

It just simply is not right to allow certain financial practices to take place in a small poor country like Uganda – such practices that have affected Global finance and, created crisis of the proportions above.

It is true that the collapse of World Trade – especially foreign trade factors whose finances were regulated by ‘Documentary credit’ – now replaced by telegraphic and other digital cash transfers systems, might seem insecure in countries of Africa. Africa still needs the documentary credit trading systems.

Collapse of World Trade – created several other trade zones; new mustards – the biggest being BRIC and other countries who seek to maintain perhaps what they envisage as the more secure modalities of trade – since even seen from a lay perspective; unregulated trade and logistics actually eats into the profitability of trade. Holding most economies in in-direct stagnation.

Shipping Costs and Insurances…

It is a blatant lie – to claim that Global Maritime Shipping rates worldwide are realistic. Trade volumes have over the last thirty years increased more than tenfold: example if Uganda imported 100 vehicles per month 30 years ago – today it is much-much more than 300 hundred cars a month.

Ships on the high seas were less in number than they are now. The models of ships have more than doubled in capacity than they were 30 years ago – however, a car shipped say from Nagoya to Mombasa or Dar es Salaam that time was freighted at US$ 800= while the same cargo today is freighted at US$ 1,500 or 3,000 for higher capacities or containerized US$ 4,000 and above…. Here very obviously, the shipping rates are unfair!!! The economics do not tally hence; some of us stick our necks to tell the powers that be that – World Maritime Logistics and [Insurance] by and large eat into the profitability of the trade. It has posed tremendous challenges onto the viability of the African Export trade – hence the enormous trade imbalance and despite tremendous increase in Agricultural output, the actual benefit to the local citizen is nonexistent. It is the value adding industries that benefit… though shipping rates dig into the profits.

I have said it – if you thought I was waging whatever against the beloved foreigners living in my country – you are mistaken! - ‘East or West Home is Best’. A good foreigner in a country can be seen – a bad foreigner in a country can also be seen. A bad law can be seen and a good law can also be seen. It is Ignorance that always prescribes JAIL for critics... The problems still remain Global!!!

                The writer is an Independent Thinker, Author and Blogger