When Dog have money, him buy cheese!!
As we all know this Government went to the IMF and borrowed US$800 Million, then they went to the Bond market and borrowed an additional US$800 Million, this coupled with the US$850 plus million the last Government borrowed. This PNP Government then decided to add some US$200 Million to prop up the NIR, which I willing to accept since it supposedly represents putting aside money for a rainy day, yeah right (lol). Jamaica’s national debt now stands at just over $2 Trillion Jamaican dollars.
But I am NOT willing to accept the fact that the Government and BOJ decided to pump money into the foreign exchange market so that Jamaicans can use it to buy Brazilian weave and Butch Stewart's son can import expensive luxury automobiles, along with the loads of rubbish we import that undermines local production. Instead of using the borrowed money to stimulate the exporting sectors, stimulate the agricultural and manufacturing sector the Government decided to prop up the exchange rate, something I am 100% against. There is a saying that goes “when Dog have money him buy cheese” and what is happening here is a perfect example, the Jamaican government lacks the discipline to stick to the plot, propping up the exchange rate is a feel good, populous move that I am totally against… THIS GOVERNMENT IS A DAMN IDIOT FOR PUMPING BORROWED MONEY INTO THE FOREIGN EXCHANGE MARKET...
Most people have the notion that when exchange rate is low our fictional “Jamaican Industrial Complex” will kick in and grow the production sector sending our GDP sky high but I have years of history on my side and it states otherwise. IMF gave Jamaica a loan in 2010 and we imported US$5,226,763.00 and exported US$1,337,372.00, in 2011 during the election year we went to town with the money and imported US$6,614,757.00 and exported just US$1,624,298.00 and back in 2008 we had a jolly old time importing US$8,162,874.00 and exporting US$2,496,156.00. The Jamaican history will show that when the exchange rate is low dog buy cheese! Because Jamaicans do not produce more, they produce less and import even beef patty when we have 2 or 3 patty shops on every street…
It is official, the Opposition spokesman on finance Hon. Audley Shaw is a proper idiot... His only Policy is to Borrow and Prop up the foreign exchange rate and I swear Mr. Shaw must be in the business of Import, Wholesale or retailing of consumer goods or he is personally profiting from it in some way... But what can we expect from a man who declared in 2008 that the Global Recession will not affect Jamaica and in fact will help Jamaica and predicted that the Jamaican economy will grow 2% to 3% over the next fiscal year as a result of a worldwide Global Recession, only for the Jamaican economy to buckle under the recession that was not going to affect us and shrink with GDP contraction of -0.915% in 2008, -3.046% in 2009, -1.217% in 2010, only to achieve marginal and mediocre growth of +1.3 in 2011. Then he had the balls to turn around and blame the recession he said was not going to affect us.... Man-A-Yard is the village idiot! What he did was like the American babe Ruth who pointed to the spot before hitting a home run but in Mr. Shaw’s case he strikeout or as we say in cricket “Ducks”…
Throwing borrowed money into the exchange rate market to prop up the dollar and thinking it is going to stimulate growth, is like trying to kill a fly in your house with a ballistic missile or a tank and in Jamaica’s case it is like throwing pearls before swine. This will not have the effect you think it will, this will not stimulate growth but unleash Jamaica’s Consumer Goods Import Complex, not the industrial complex. Every Jamaican Government have tried to stabilize exchange rate by borrowing money at high exchange rates, pump it into the exchange market and prop up the exchange rates. We have been doing that for a long time now and yet we are no better off today than we were yesterday. A better option would be to work one on one with the local manufacturing, agricultural and exporting sectors, trying to reduce the shock of the exchange rate changes as the dollar finds its own level, this is what borrowed money should be used for, to promote development not facilitate imports of garbage. Summer is upon us so get ready for mass import of Hennessey and SKYY Vodka for the festive season because that is how we roll. Borrowing money to prop up the exchange rate is not sustainable, the amount of foreign exchange required to keep Jamaican in the lavish lifestyle they have become accustomed to is very large and they are not earning a fraction of that. It was reported that the Government pumped a borrowed amount of US$60 Million into the market which resulted in a 3 cents temporary revaluation of the Jamaican dollar and I am almost certain that Jamaica does not earn US$60 Million in a day but we can sure spend 10 times that given the chance. It was also reported that pumping US$60 Million into the market would prevent disorder but as far as I am concern pumping borrowed money into the market is the very definition of disorder and the definition of market order would be to allow the Jamaican dollar like dirty, gutter water to find its own level…
I am happy to report that the dollar as resumed its devaluation course after the setback of the past couple days when the excess US$60 million that we did not earn and was pumped into the market, evaporated like Bay Rum on my forehead when I had dengue fever as a child (or Kananga Water) and now we are back to sucking fumes. So what will the Government do next, will it pump another US$60 million in into the market or use the money to invest wisely? We borrowed US$800,000,000.00 from the bond market and at a rate of pumping in US$60 million in per week, I estimate that we can blow the entire US$800,000,000.00 in about 13 weeks or less… So I suspect a lot of Brazilians will be walking around bald and a lot of Jamaicans will be walking around in long flowing hair…
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