Saturday 25 December 2021

Money from nothing: how banks can loan money they don't have any access to

Fractional reserve banking, and leverage based paper loans where the cash doesn't have to exist.


The money you've taken on loan - from the bank - doesn't actually exist. The bank - when it loans out money to you - simply does some accounting entries recording: the amount which was paid over to you, perhaps in your account, and the amounts which it would need to have in case it ever needed to actually pay that money.

A sort of deposit is entered, of sorts, within their books, but banks don't actually need deposits in order to loan. They, in fact, very rarely actually need any actual money.

Let's put it this way. Let's say that you have an account at a bank and someone you want to pay has an account at the bank. The bank doesn't actually have to have any money on them in order to transfer money from your account into theirs, or vice versa. And banks, to transfer money from one another, they they don't like to have to physically transfer cash around and it would be quite cumbersome to transfer it every single day, back and forth, whatever is owed, between the banks ... And so, banks generally will either have an account with other local banks in the area, or with their local reserve bank, or some third-party bank.

And so, when money is transferred from one bank to another, all that really happens is an accounting equation where the account of the other bank is credited or debited and both banks do this sort of thing, saying that this or that bank therefore owes this-that-bank this much, and as transfers go back and forth between the banks, the amounts are probably not going to get too large between them unless there's some great inequality between the different banks.

And banks very seldom will actually want to call upon the money which is loaned, for the simple reason that keeping money is expensive. Storing it. Making it safe. This is why certain banks can get away with negative interest rates, where other banks will keep the money in them, and they know that the money is actually safe, and so they'd rather pay the negative interest rate, for the money to be safe, than have to store the money themselves, and keep it safe.

Now, this whole process simply shows you that a bank is able to do most of the business it does without actual money ever needing to be seen. The money which a bank will keep in an ATM, or the like, would be much like stock, and inventory, that a store keeps. Just as a store might restock milk or cheese within their store, or erasers, or whatever it would be - the bank stores money in its ATMs, for people to be able to use, and that money is there for if it ever needs to be drawn, and a bank will also have processes where it can transfer money - real money, or cheques, to other banks, or other institutions.

Now, this is where we get beyond the fact that a bank is not merely an intermediary. Now, an example which might help in understanding this goes back to the idea of the goldsmith, or even to temples which were keeping money - the sort of money changers at a temple. Now, in the ancient world you might want to keep your gold in the vault of the goldsmith, and so you put the gold in and he'd give you a sort of certificate saying this is the amount of gold which you have, and you can take that certificate to go and withdraw the gold at any stage you want.

The chances are you don't really want to withdraw that gold, and you might also have that certificate for a lesser amount, and use that certificate as though it were the gold - handing it over to someone else as a sort of bearer bond where they can then go and take the gold.

But they might not actually want to take the gold. Gold's heavy. It's cumbersome. People might steal it. So, they, in turn, might use that money as a sort of bearer bond. And, what you're starting to see is the equivalent of bank issued currency. This sort of currency, which would have existed in the earliest times of banks, where the paper currency which is issued is issued by the bank itself, and backed up by the gold in its vaults.

But banks, or goldsmiths, or whatever else it would be, got quite clever. They realized that they could actually loan money out of the money which they have in their stores, and people would pay interest for that.

Now, the earliest type of bank interest was in fact late fees for money being loaned, because banks had to get around the equivalent of usury laws, and so you'd be paying the fees. If you didn't, if you paid the money back immediately, without ever paying the fees, then you probably wouldn't be loaned money again.

So, you have this sort of banking system, but should they actually loan out the actual gold in the vaults, or should they instead simply write this, sort of, same sort of cheques of sorts, the sort of certificate saying: this amount of money is due you from the vaults - when they loan the money ... And, that person, in turn, could pay that money over to someone else, and so forth.

The banks realized they only had to keep a certain amount of money in their actual vaults at any given time. They could in fact loan a lot more money than was in the vaults. They could get away with not actually having the money there. And, you automatically assume, if you actually have money in your bank account: that's not money that's yours. The money becomes the bank's. But then .. you ... the bank has a liability to pay back that money, on demand, usually, but sometimes at different rates, and times. And you assume that's because the bank is going to be loaning that money out to other people, so you already have that sort of awareness.

Now, bank runs were a big problem before reserve banks - and that's the idea that all the customers of a bank might come through and demand their money, and the bank simply doesn't have enough money to pay them back.

And the solution to this might be that the bank, on that day, loans money from another bank, who loans at a relatively low rate to them, and they're able to pay the money out. And eventually you have a specialist bank called a reserve bank, which specializes in loaning money to banks when they need it, in a pinch. Which is why, if you have an especially large amount you need to withdraw, the bank actually needs a certain amount of time to do it. Because, chances are, they're ordering that money from a reserve bank, or another bank, or else their vaults somewhere else in the world.

Now, the SWIFT banking system is quite interesting. That's the international banking system. All it does is - it has certain codes: a code for the bank , a code for the country of the bank, a code for the city of the bank, the sort of bank identifier code ... identification code ... and then you have the IBAN, the international bank account number, or the equivalent of that, for the customer ... And you have the address of the bank, and so forth, which gets entered into the system. And what really happens is that the system finds a bank which has an account for both of the banks involved, and the one account gets credited, the other debited. The money doesn't actually transfer.

And, if you try to take physical money out of a country, often, you're limited to something like 10 000 dollars or 10 000 euros that you're allowed to take in - or it might be seized by customs on your arrival. So, money - physical money - is quite restricted. And in certain countries they even have moved to ban withdrawals for more than 10 000 dollars, or euros, or whatever it would be, being withdrawn physically from the bank.

And so most of the time that money is not actually needed by the bank - physically - and when it is needed, they can simply loan it from a reserve bank. And so, when a bank writes a loan to you, they're literally writing it down in their books. They don't actually have to have the money. And, if at any time they do need to have the money to satisfy some or other demand, they can loan the money at a relatively low rate from other banks, or from a reserve bank, and if you have deposits with them, they loan the money from you at an even lower rate, which gives them a beneficial sort of deal - that they don't have to pay as much.

And this is also why a country will determine the rate of inflation by determining the rate at which the reserve bank will loan to other banks. Because, the higher the rate of interest that is demanded by the reserve bank, the higher the rate which will be demanded by the banks of their customers, and so that fewer people will loan money.

Now, there's an example - you can have - of Jack and John. Jack and John each have one dollar, but they each need a hundred dollars' worth of services from the other one. So, Jack pays John and John pays Jack, and so forth, until they've actually spent a hundred dollars with that one dollar. That's sort of the frequency of money, and that sort of makes each of those one dollars actually worth a hundred dollars in the impact of what they do.

But let's say that you are paid a hundred dollars for a day's work. Would you do another hour's work on top of that for another dollar, or would you demand a larger amount? The more money you have, the more you demand. And, let's say that you're able to loan money from a bank - money which doesn't actually exist - in order to buy a house. Now, if you have that - more money - you're able to spend more on buying that house, and so the price of the house will go up, because people will be competing. So, inflation goes up.

In the case of Jack and John, if they were to actually have to pay 10% tax for each transaction, the amount they'd be able to spend would probably not be a hundred dollars, for the simple reason that: the second transaction, they'd only have 90 cents, and then 81 cents, and so forth, as they'd have to give the rest to the tax. So, taxation slows down the growth of an economy, and the use of money, and it also slows down inflation. While, things such as loaning by banks will increase growth in the economy, because there's more opportunity to use money and therefore more of what could be used.

For instance, Jack and John - if they just have one dollar and they're not doing any work - they're not producing anything. But, more of what can be produced, can be put to work, so banks are good in that sense. At the same time, the amounts that are used to put things to work can be in excess of what would be required for the money to keep its same value, and so the value of the money changes as a result of that.

And - fractional reserve banking - people have this idea that it's: oh, you keep 10 euros of what's in your accounts, gets kept by the bank, and the other 90 gets loaned out. But really what's happening is, their loans aren't dependent on your deposits. Their loans are dependent on all sorts of algorithms of how much they can loan out, and your deposits, and the reserve bank play a role in that. And, so, the money that the bank's loaning out isn't money that the bank actually owns. It's out of thin air, so to speak, and that's a very beneficial thing for an economy, though it's borrowing from the future, because that money doesn't actually exist. And, if you look at all of the money in existence and then you look at the actual GDP of countries you might find that the amount which exists and the amount which is owed and the amount which is actually spent are quite different and this is money which often doesn't actually exist but which can be put at a greater frequency to work.

And, this is also why - in the old days - things - partially why - in the old days - things like usury were seen as something bad, as something which could even be criminal, because if a bank is loaning money that doesn't actually exist, they reduce the worth of any money actually in circulation.

The euros in your pockets become worth less because a bank is able to loan say 100 million euros, which don't actually exist, and if you try to actually borrow money from a ... federal ... bank ... a federal reserve bank, or the like, you wouldn't actually be able to do it. Only banks can have accounts with that. And, for a bank to actually exist and to enter into the sort of system of writing up loans of money which doesn't exist, it actually generally has to have a certain amount of assets to its name, and often countries will restrict the amount that a bank can loan based on - it has to have this amount in its accounts, whether borrowed from a reserve bank, or from depositors - or a country will have restrictions on the amount a bank can loan based on its actual assets that the bank has, so its actual degree of leverage gets reined in a little bit.

And, the benefits obviously are huge. I mean, if you can take out a loan to buy a car, you have a car. You don't have to wait the amount of time to buy the car. The converse is that property prices and the prices of things like cars have gone up by massive amounts as a result of inflation and fractional reserve banking.

Ayn Rand famously said that inflation is theft by remote control ... uh sorry it's theft ... uh ... it's remote theft or something along those lines. The exact phrase I can't remember ... but essentially, by printing money ... In the Soviet Union, the government was taking away the value of the money that people had, and so it was seen as a sort of theft, and this is where the sort of extreme anger which people on the left might feel towards banking might come from, because they are loaning money which doesn't exist ...

But there's a great benefit at the same time - of banking in our economy - which is that it makes the economy more efficient. It means that people who would qualify for a loan can get that loan even though that money doesn't exist, and that frees up the economy, and it brings more prosperity, even though the price of that prosperity is - well, a rather strange one ...

Sunday 12 December 2021

Trouble in China: All is not well in the Middle Kingdom

From Evergrande, to the ill maintained and now unprofitable high speed train network, to rising authoritarianism, not all is well in the Middle Kingdom, and that could hurt the global supply chain and your own pocket.


China has a massive impact on your life. If you look at your cellular phone ahead of you, or your computer ahead of you, the chances it or part of it was manufactured in China are quite large. In fact, your keyboard, as well, your mouse, the chair you're sitting on could well even have been manufactured in China.

China is an integral part of the world economy, and when you hear about certain shipments being stuck on ships offshore and that being a reason why you can't get certain things to give to family for Christmas, you might also be unaware that a lot of that has to do with supply chains and to do with the fact that a lot of products are made in places like China. 

Now, that was quite controversial in the early 2000s when China had only just been admitted into the World Trade (trade) Organization. And the argument was that China would become better by trading with other nations, and it has pulled a lot of its people out of poverty through all of this trade, but the accusations of: slave labor, of poor human rights, of companies, which operate in China, not respecting the environment to the extent that the water becomes poisoned, the air becomes poisoned, and all sorts of problems emerge for communities who live there. So that their vegetables might make them sick, so that their water might make them sick, so that often the Chinese people have to drink water not from the taps but from a big plastic sort of containers which are used much like an office water cooler ... Which themselves might often simply be got from a local well which has been poisoned. 

And yet, businesses when they saw all this bad publicity continued to produce in China because one of the reasons why they were producing in China was to get rid of the effects of over-regulation. Especially if their competitors were producing, without less regulation, they needed to be more competitive and so they continued on.

But certain things have been happening in China which will have a great effect on the global economy as a result. You already might know about the supply crisis which is partially due to a lot of ships being scrapped during the pandemic, and to a rapid reopening where you don't actually have the supply lines in place, or the amount of bulk which is supposed to go through any longer. But you also have, in a place like China, you have whole cities put on rolling blackouts as less than enough coal is produced. You have strange things happening with the railways, and you have strange things happening with homes. China is a controlled economy, and a controlled information economy. What's happening in China, you often don't hear about anywhere else in the world. You only really hear about it if you know where to look and often even that is hushed up. 

And certain people have lived in China, certain westerners such as the people who run the ADV China channel which were adventure motorcyclists, who toured all of China - northern and southern China. And who also looked at the ghost cities built by certain now infamous construction companies. They looked and they saw these apartments which were built and when they touched them - they came apart, already, as though they're 40 years old when they were only a few years old. And they looked at them and they saw that there were things much like Styrofoam which were keeping it up. And that the concrete was massively substandard. In fact these buildings weren't designed to be lived in. 

When they looked for a place to buy, some of these westerners, they were told: don't buy investment properties. You won't be able to live in them. They're not safe. Buy properties which aren't investment ones. But even those often fall apart ... over ... after a few years, because there's not adequate maintenance of them, because during the cultural revolution in China the four olds were targeted. The old knowledge, the culture, the things which created a so-called 5000 year old Chinese history. Though China within those years was a lot of different little nations within where China is. But, nonetheless, that history was largely erased, and the famine also had a huge effect on China. 

But what China has done with infrastructure is quite concerning and it extends beyond property, beyond these massive ghost cities being built for investment purposes when China has a falling population and an aging population. So that these properties will never be required, and yet they're not built so to be lived in, nonetheless. 

And Evergrande is something which has hit the news, recently, but that has been discussed a lot by people who know China well before then ... Something else which is not hitting the news so much is the infrastructure problem ... is the lack of maintenance. In particular, China's famous high-speed train network, that was originally created as this great mastership stroke to show how great China is. 

A lot of what China does is about face, is about creating this impact of ... China is this great nation, this nation which is moving forward, this nation which is greater than the West or any other nation ... China lifting itself out of poverty ... to a degree that when China declared that poverty was combatted they shut down soup kitchens, despite the fact that the average Chinese person would be very poor by Western standards.

But back to the trains. China built its train network, and they built it as this masterpiece, and yet there was so much corruption around it, that they decided that they needed to offload it into a sort of semi-private type of company to run it. 

And to continue extending it, they did much like what South Africa did when it inherited the power stations from the previous government, which had produced way in excess of the needs of power stations. What they did is they started extending the grid to as far as they possibly could, to people who often couldn't afford to pay, and they made it unlawful for Eskom, the power company in South Africa, to disconnect people if they weren't paying or to disconnect at least the municipalities not paying ... To an extent that that cross subsidization which occurred hits a sort of problem, where electricity prices simply couldn't be raised enough to combat all the debt the company got into, and of course South Africa has rolling blackouts quite regularly and a electricity grid which is in great danger of being shut down altogether in the future. 

But in China they did the same thing. They took the trains and they started extending the lines beyond these big first tier cities, to smaller and smaller places. These very, very, fast, super-fast trains, which aren't good at carrying things such as cargo, but are good at carrying people very fast. And so people, instead of taking a bus or a taxi or a motorcycle to go from city to city, could take a train and of course local governments began banning motorcycles, which were the main form of transportation and severely restricting them and confiscating them, because they wanted to have different means of transport for people. 

And so you have these specific trains which are built and which extended further and further into unprofitable routes in order to push this whole idea of the rising China and the problem is that that cross subsidization, especially with the pandemic, began to become less and less effective until it became not effective at all, so that the railway lines are in massive financial trouble and they need a government bailout. 

Something else which is in massive financial trouble is the local government in China, which has largely relied on property, and control of it, and the ability to rent it out, or to use loans based on, it in order to provide local social services, which the main government was not able to. And these property prices were linked to the ability of these massive construction companies to produce all of their ghost towns, and to continue producing, and producing and producing. 

Now, the other side of the ghost towns, is that they're beneficial because you're allowed to get married in China once you have in fact bought property in a certain area, and if you have property in a certain area you're allowed social services there for you and your children. 

There's often talk about how China has a sort of Apartheid system, a system where the rural Chinese don't really have rights, and have to come into other parts of China almost unlawfully, almost illegally, until such time as they buy property there. And that's been massively abused by companies, of course.

But the buying of properties, properties which someone couldn't afford to pay off in their lifetime, became quite common in China. And, also, the problems with Chinese speculation in the stock market pushed more and more people into property, and pushed these prices really, really high up. And yet the buildings being built weren't worth anything, quite often, to live in, because they were simply building facades to be sold on, and on, and on. And even the ones which were built to be lived in were not properly maintained, quite often, which resulted in buildings losing their life quite rapidly.

Evergrande, the biggest, the most indebted, company, dealing with construction in China, would sell properties. And they would sort of have giveaways where they give you away a chicken if you want a property. 

The property was bought before it was constructed. Despite the fact that China has more than enough housing for everyone to live in, these new properties would be built, and it was almost like a pyramid scheme. You know, what was being sold wasn't actually worth much. It was simply a façade of a building, and if it was more than a façade, if it was an actual building, it wasn't necessarily going to last that long. And even if it did last that long, it wasn't really worth the very, very high prices of property in China. 

And when the government began to clamp down on this Evergrande got into massive, massive financial problems, and it's not just Evergrande. 

A lot of the biggest ... financial ... biggest property development, biggest construction companies, in China, are in the same position as Evergrande, or near it, and Fitch has stated that China ... that Evergrande missed a payment and are in default. Now, they've been paying late, but within the one month's grace period to their foreign investors, and foreign creditors, but this time they didn't. 

Now, it's thought that maybe they didn't because they've been ordered not to, by the Chinese government, that the Chinese government wants them to pay their local creditors rather than the foreign ones, first. And that's quite possible, but the problem is that increasingly we're told by the market that China is going to have to bail out Evergrande, which they have suggested they're not going to do. Though, if they do bail out Evergrande, there's a lot of other companies which also need bailing out, and, also, they have their national infrastructure to think of. The national infrastructure in China is quite in danger. The trains need to be bailed out as well. They possibly need to be nationalized, and at the same time as nationalized, they might need to begin ... begin maintaining the trains properly. 

And yet the whole approach of creating a façade almost like ... You have the old story of a toy manufacturer being told to manufacture medicines, or medical devices, and it was thought to be a great deal, except that the sigma involved for faults with toys is much higher than that for medical devices. And so you have things which look very great on the outside, with the toy manufacturer, but, not that great inside of it. Things which can break more easily. 

And what China's focused on is the outside, is the face, and, especially, under Xi Jinping, and his rule, which has centralized power, and which has increasingly gotten rid of dissenters, and people who might speak ill of anything in China or any people to do with the government. So much so, that you had a case with a tennis player where she appears to have been disappeared for accusing a former, essentially, Deputy Prime Minister, in China, of forcing her to do things she didn't want to do. 

But that focus on face, that focus on appearance rather than on what's below, it has created a massive problem within China. And that massive problem can extend to the rest of the world, because of how much of the world is so deeply invested in China and how much of what is produced is produced within China. 

And also because if China really does face the sort of social downfall and economic collapse which might come from the sort of pyramid scheme that has been so much of its growth in the last 20 years - that might be a very good reason for China to start looking at the outside world - and looking for something to distract the local Chinese population from what's happening. 

And so what's happening with Evergrande, what's happening with the Chinese railways, what's happening with so much of what's going on in China, is not something which should be dismissed as unimportant. It's incredibly important and it should be incredibly concerning if you're able to see what's actually going on with it. 

Thursday 9 December 2021

Pandemic Spread, Death and the Parachute Effect

A sense of security, perhaps accompanying security theatre, can result in such risk taking that despite preventative precautions, danger still stands, but without an awareness of it.


The amount of risk people take is, oddly enough, proportionate to their perception of their safety. 

People who think that they're safer will often take more risks, often without even noticing it. A very good portion of abortions in America are performed on people who were taking contraception, and seemingly taking it properly, at the time at which they got pregnant. And if you distribute condoms at schools or in a city or elsewhere to an extent that it becomes easy to get a condom - quite often STD rates go up, instead of down, oddly enough and seemingly linked to a psychological phenomena known as the parachute effect.

And the parachute's effect extends beyond the realms of public health. You might also see it in places such as American football versus rugby. In American football a player will be wearing extensive padding and people who play rugby often mock the American footballers for how much padding they wear - how much protective gear they wear - and yet American footballers often get very terrible brain injuries despite wearing the padding and you hear about that a lot less often with the sports such as rugby not to say that one or the other is safer, of course.

The fact of the matter is that human beings don't actually understand risk properly. There was ... there is a famous YouTuber known as Lindybeige whose real name is Nikolas Lloyd, who has spoken about the way in which when he's fought using very little protective gear - with his friends when they simply sparred - quite often they would hold back in a certain way and were more cautious, so as not to actually injure one another; Whereas, where they used extensive protective gear, people would use their full force against it.

One of the things which has been quite odd is that vaccines have come about for Covid-19 - which is a good thing - at the same time as vaccines have extensively been introduced - you have higher rates of infection in some parts of the world and even higher deaths in a place like America, for instance; And the question is why. 

Well, the vaccines provide something like - with the Pfizer something like - 95 percent protection against the original Covid variant, and still a very high protection against Delta, for instance, and yet if people, having taken a vaccine, then say: 

Well, I'm not necessarily going to mask any longer. I'm not going to social distance as much. I'm going to go out and meet all of my friends because I'm safe. And they perceive it as 100% safe. You're going to get a lot more cases. 

Now, the vaccines make you much less likely to need to go to hospital, much less likely to die, and they reduce case numbers quite extensively - but not by 100% - by specific percentages that they're supposed to. And to add to that, the latest research finds that quite often with vaccines such as these types of ones - which were developed - you need some sort of booster shot after, say, three months, or so, and the effect overall, again, is the parachute effect. It's saying that this specific thing is going to protect you, and therefore people take it at word, and they engage in a lot more risky behavior as a result.

The sort of risk involved can be, sometimes, quite extensive, compared with what people would otherwise engage in. And in fact one of the things which might explain the lower Covid numbers in some countries which haven't locked down more extensively, is that people, when things are left to themselves, often are more cautious, rather than when things left to them by the government telling them what to do. For instance, when speed limits were introduced, the average speed on roads increased rather than decreasing, for the simple reason that people then had a sense that they knew what the risks were, and therefore engaged in more risky behavior.

The issue with vaccines, when it comes to spread of Covid, is that - while people are under the impression that it completely protected and prevented spread - thanks to things like vaccine passports - the fact of the matter is, that it only reduces spread, and it does so by reducing the amount of time at which people are at a certain level of infectiousness. It doesn't reduce spread completely, but it does reduce it a bit. But if someone, because they have a vaccine passport and a vaccine, go about their ordinary lives taking no precautions against coronavirus, versus someone who is not vaccinated, but takes a lot of precautions, you might find that the parachute effect comes into play again. And this effect is quite important for public health and for otherwise. 

A friend of mine at a firm in the United Kingdom, whenever they go into office, every two days, they get tested with a rapid antigen test, and that's not a hundred percent either, but it's a pretty good tell whether someone has Corona virus or not - and, obviously, whether you have the vaccine or not you can still spread it, which is why you should still take precautions. But if you take a test which says that you probably don't have Corona virus - you're much less likely to actually spread it - and those sorts of mechanisms can well be quite effective at preventing spread in a way in which more was gained from it, even though those tests, again, are not 100%. 

But the parachute effect and the fact that human beings are what it is dealt with in public health are both incredibly important and countries which ignore them and ignore the facts involving them do so at their utmost peril.

Wednesday 8 December 2021

ANC fails to get rid of property rights, still plans to pass legislation to seize land

South Africa: ANC fails to get rid of property rights, still plans to pass legislation to seize land

South African Justice Minister Ronald Lamola has said that the country will pass legislation to expropriate land without compensation, after spending several years attempting to amend the Constitution of the Republic of South Africa, 1996, in order to be able to pass legislation to expropriate land without compensation. The hitch in their plan is, the attempt to amend the constitution failed. They are still going ahead.


The Justice Minister of the Republic of South Africa has made a rather unexpected statement, after the ANC government in charge failed to succeed in creating a Constitutional amendment to South Africa's Bill of Rights to allow the government to expropriate without compensation: land, and with that land specifically being seen as land occupied or owned by: white South Africans generally, given that it has been presented as a sort of stolen land argument. 

This isn't land which was seized during apartheid - which the government in fact compensated people for using the land claims court - but rather land in general. Often, land which people bought as innocent third parties, and have mortgaged based on the state system of land registration and ownership, which has long been part of South Africa's system. 

The reason the Constitutional amendment did not pass is that the Marxist Economic Freedom Fighters party of Mr. Julius Malema voted against the amendments - not because they opposed land expropriation but - because as a Marxist party they thought that it didn't go far enough. They wanted more land to be expropriated. They wanted the state to be the custodian of land in general. They wanted essentially to get rid of property rights while the African National Congress took a much less extreme position of simply wanting to have the right to take away property without compensating for whatever its fair market value would be. 

The Democratic Alliance, despite some campaigns by some in media to get them to vote for the amendment in order to prevent the EFF's measure from going through, in fact did not vote with the ANC's way of doing things.

And the ANC decided not to go with what the EFF wanted, perhaps not to give them a victory when the ANC is finally below 50% at the polls for local government elections. 

So, what was the statement after the shocking defeat in parliament - where they had to actually put forward a bill that they knew they'd not succeed in getting through because the EFF had abandoned it? Well, Justice Minister (in South Africa) Ronald Lamola, has made a statement that South Africa thought that that was just one means of doing it and that they're simply going to pass legislation to allow expropriation without compensation - which is quite odd, because the Constitutional process was to amend the Constitution in order to enable them to make legislation to do so. 

What they'll do and whether courts which are obviously human institutions and not robots ... If courts allow what expropriations they do going into the future is uncertain. And it's uncertain what legislation they have plans to put through or whether they plan to put anything through at present, but the response to such a defeat seemed to be saying that the entire battle they were fighting was not necessary in the first place ... so why did they fight it for several years then?

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