I have seen reports that the United States is going into a recession, the markets are volatile and interest rates and inflation in South Africa are going up. Please explain what is happening?
Going into 2008, South Africans are facing what could prove to be the most difficult investment conditions in many years. They are facing highly uncertain local and global political and economic conditions as well as significant financial market volatility. Political changes in the US and Russia as well as turbulence in Iraq, Iran, Pakistan, Chad and Kenya are a few examples. Just as worrisome is the extent of the US growth slowdown, the global slowdown, the threats of stagflation and inflation, recent equity market sell-offs and continued fears in credit markets from the sub-prime crisis. In South Africa the situation is equally uncertain. Consumers are faced with higher inflation, rising interest rates, high debt levels and high oil and food prices. At the same time, financial markets are volatile and there is a risk that political developments will add to this during the year. Investment returns are also deteriorating. Now that the long bull run in equities has slowed (the JSE retur
