South Africa To Repeat MISTAKE That Put Zimbabwe Into HYPERINFLATION?

I'm about to embark on a little bit of a controversial topic. The Past of South Africa's Apartheid and the current plan to confiscate white farmers properties. What has come out is that this can cause a mass of bank failures. How? The farmers are indebted and with a coming confiscation of land. There is very little probability for a payoff of the farmer's debt, and this can cause a banking collapse as major South African banks have farm debt. NBS, Standard Bank, Barclays South Africa and First Rand all have farm debt. Some have as much as 10% of total debt being farmland debt.

The risk here is that a 10% wipeout of bank "assets" could push one of the major and other Sout African banks could cause a collapse of the highly overleveraged and cash-strapped banks playing a game of trust with their depositors.

The reason why I am saying this is a risk is that this was implemented in Zimbabwe during the late 1990's. The government's land distribution is perhaps the most crucial and most bitterly contested political issue surrounding Zimbabwe. It has been criticised for the violence and intimidation which marred several confiscations, as well as the parallel collapse of domestic banks which held billions of dollars' worth of bonds on liquidated properties.

Even if the South African repatriation of "stolen" properties which will get them? One of the dominant tribes in eastern South Africa is the Zulu people. So perhaps the South African government will carve up the land and give tiny parcels to members of the Zulu tribe. But then again the Zulu tribe conquered that region centuries ago after a bloody war with the Ndwande tribe. So perhaps the government should give the land to the descendants of the Ndwande instead.
Except that the Ndwande had conquered the area from the Mthethwa Empire, who in turn had conquered it from the Pedi tribe.

What can be sure is that political elites might divide up some of the spoils. And history repeats itself from the Zimbabwean property confiscations. The potential of creating a hyperinflation printing currency to save potentially failing banks.

The South African banks have next to nothing in Cash to deposit ratios and are fragile as is and a bank run could easily topple any of the leading South African banks. Of course, the collapse of farm debt on banks balance sheets could fast collapse the banks and follow what happened in late 1990's in Zimbabwe the predecessor of the hyperinflation that collapsed the Zimbabwean Dollar. Is the South African Rand heading the same way?

While property confiscation is one big issue, no one is talking about the drought issue for South Africas second biggest city in the country running out of the water the most important asset to any human being. South Africa has a lot of significant problems ahead as South African government debt to GDP has close to doubled since 2008. The country is in a lot of issues and violence created by bad government policies fast forwarding the collapse of South Africa!

Peace, Love and Voluntaryism,

John