𝗦𝗼𝘂𝘁𝗵 𝗔𝗳𝗿𝗶𝗰𝗮 𝗷𝘂𝘀𝘁 𝘀𝗲𝗰𝘂𝗿𝗲𝗱 𝗮 $𝟭𝟱𝟬 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 (𝗥𝟮.𝟱 𝗯𝗶𝗹𝗹𝗶𝗼𝗻) 𝗹𝗼𝗮𝗻 𝗳𝗿𝗼𝗺 𝘁𝗵𝗲 𝗢𝗣𝗘𝗖 𝗙𝘂𝗻𝗱
Here are 3 truths that no one shares:
(𝟭) 𝗡𝗼 𝗺𝗼𝗻𝗲𝘆 𝗮𝗰𝘁𝘂𝗮𝗹𝗹𝘆 𝗺𝗼𝘃𝗲𝘀 𝗮𝗰𝗿𝗼𝘀𝘀 𝗯𝗼𝗿𝗱𝗲𝗿𝘀.
The OPEC Fund isn’t literally shipping cash or transferring a pre-existing pool of wealth. The entire transaction is purely electronic bookkeeping.
(𝟮) 𝗥𝗮𝗻𝗱𝘀 𝗮𝗿𝗲 𝘀𝗶𝗺𝗽𝗹𝘆 𝗰𝗿𝗲𝗮𝘁𝗲𝗱 𝗳𝗿𝗼𝗺 𝗻𝗼𝘁𝗵𝗶𝗻𝗴.
When the loan is processed, the South African banking system doesn't move existing funds.
Following Richard Werner's credit creation model, it types a new digital entry into the Treasury's account, creating brand-new Rands ex nihilo (out of nothing) at that exact moment.
(𝟯) 𝗧𝗵𝗲 𝗦𝗼𝘃𝗲𝗿𝗲𝗶𝗴𝗻 𝗗𝗲𝗯𝘁 𝗧𝗿𝗮𝗽
If South Africa can just create Rands domestically via credit creation, why borrow in foreign currency then?
𝗦𝗨𝗠𝗠𝗔𝗥𝗬
The catch is that South Africa must repay this loan, plus interest, in actual US Dollars (USD). 𝙎𝙤 𝙞𝙛 𝙩𝙝𝙚 𝙘𝙪𝙧𝙧𝙚𝙣𝙘𝙮 𝙢𝙤𝙫𝙚𝙨 𝙖𝙜𝙖𝙞𝙣𝙨𝙩 𝙮𝙤𝙪 ( 𝙬𝙚𝙖𝙠𝙚𝙣𝙨) , 𝙩𝙝𝙚 5% 𝙐𝙎𝘿 𝙞𝙣𝙩𝙚𝙧𝙚𝙨𝙩 𝙧𝙖𝙩𝙚 𝙬𝙤𝙪𝙡𝙙 𝙖𝙘𝙩𝙪𝙖𝙡𝙡𝙮 𝙗𝙚𝙘𝙤𝙢𝙚 9%, 11% 𝙤𝙧 𝙚𝙫𝙚𝙣 13% 𝙞𝙣 𝙡𝙤𝙘𝙖𝙡 𝙩𝙚𝙧𝙢𝙨.
This is a sovereign debt trap because South Africa doesn’t just import foreign money, rather it expands its domestic money supply via a digital ledger.
All this while signing up for a hard-currency debt obligation that future taxpayers must fulfill.
𝗙𝗼𝗿𝗲𝗶𝗴𝗻 𝗟𝗼𝗮𝗻𝘀 𝗮𝗿𝗲 𝗮 𝗦𝗰𝗮𝗺
You don’t need foreign loans to finance development locally when you are a sovereign who can create the money needed yourself.
It is simply a method to trap you via debt.
Take notes 🔻