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In early 2002, Steers revamped its menu, and introduced for the first time the King Steer Burger, the biggest on the market at the time. It cost R11.50 back then to buy the new King Steer Burger – with two 100g beef patties, two cheese slices, dills, onion, salad and three sauces.
Today, it costs R39.90 for the same burger. The price is up 250% in ten years, a compounded annual increase of 13.3%, or 250% in total.
The price of petrol in January 2002 was R3.61 per liter in Gauteng. Today, a liter of petrol costs nearly R12. Again, this amounts to an increase of 230% in ten years, or compounded annual increases of nearly 13%.
Stated differently, in 2002 you could buy a King Steer Burger and a liter of petrol in exchange for R15. Today, you could only just get a liter of petrol, and 7.5% of a King Steer Burger, maybe one bite. You couldn’t even afford to buy half a King Steer burger today with R15.
In real terms, the poorest South Africans are getting poorer as their salaries cannot keep up to this kind of price inflation. Think about the unemployed who don’t even earn a salary. They’re the biggest losers.
Now had South Africa been on a sound money standard, and we all used gold as a medium of exchange, the story is different.
In exchange for an ounce of gold you could get 290 King Steer Burgers in 2002. Today, you can buy 331 King Steer Burgers for the same ounce.
Likewise, you could buy 925 liters of petrol in 2002 for an ounce of gold. Today, you can buy 1100 liters on the dot.
It is the declining value of the Rand, because the Reserve Bank creates too much inflation, that the price of everything is going up. Unless the Reserve Bank stops the printing, prices are set to spiral out of control in coming decades.