Notwitstanding the bewildered media, ANC, DA and EFF, the constitution urges the printing of money (quantitative easing) in certain circumstances.  

Section 224 (1) defines this: “The primary objective of the SA Reserve Bank is to protect the value of the currency in the interest of balanced and sustainable economic growth in the republic.”

So when rating agencies are poised to pull the plug because of Eskom and other state-owned companies’ debt, the Bank can print R500bn as repayment. This means the equivalent of delivering 19 shipping containers stuffed with notes to Eskom creditors in exchange for their IOUs. And waiving market interest rates.

Critics must show this transaction will result in “a general increase in prices”, as inflation is defined.  In emergencies, such as the credit crunches of 2010, every central bank in the world was “helicoptering” money to banks from its printing presses.  That was wrong because they continued to pay bonuses, which did cause inflation.   

Some ground rules are therefore necessary to ensure that quantitative easing is not used to subsidise private citizens and companies.

Quantitative easing for infrastructure such as leasehold housing, roads, health facilities and schools benefits all. In places like Hong Kong and Singapore, which capture a high proportion of land rents, these rise as infrastructure improves. That is what the 2018 medium-term budget policy statement on land taxes was about.

Peter Meakin