Bush, Obama, Trump, and Biden are like the last leaders of the Roman Empire…Anthemius, Glycerius, Olybrius, and Nepos…no accounts and imbeciles…playing their roles without really understanding what was going on.
Brexit, the US-China trade war and conflict in the Middle East.
It seems we are quickly moving into an era where markets are dominated by politics.
What is the real impact of politics on the economy and global markets?
On any given day you may see the ASX up or down on a variety of politically-driven events.
At The Rum Rebellion we take a long-term view. Ultimately, markets are driven by earnings and interest rates. At a fundamental level, this is all that matters.
Brexit and the US-China trade war can impact earnings and interest rates, so to a degree, these are relevant to market moves.
The real impact of politics on the economy and global markets though, is that it creates a smokescreen for investors.
The back and forth detracts from a clear-eyed view of what’s really wrong with a country — especially here in Australia.
What’s wrong with Australian politics?
Of course, Australian politics has recently impacted markets. The ASX got a short-term boost from the Liberal victory in the federal election.
However, successive governments (on both sides of the aisle) have created a system that results in an excessive amount of capital flowing into the property sector.
Investors have been rewarded by speculating on land, rather than investing in longer-term productive enterprises. Commodity-based income underwrites this national pastime, which is why the commodity/housing nexus is so important to ongoing growth.
It has left us with a foreign debt of $1 trillion, and the continued selling off of assets to fund our property obsession. As a result, we have a chronic current account deficit. In the year to 30 June 2018, the deficit was around $50 billion.
The trend reversed recently on the back of a commodities boom, in particular iron ore.
Hooked on houses and mining again…
What’s Australia’s political relationship with China?
Everyone knows we have a close economic relationship with China. They now own some of our ports, gas pipelines and electrical grids.
They pour money into real estate and mining as well.
But our over reliance on this investment comes at a price — we don’t have anywhere to go if the relationship breaks down.
As a result, we are sceptical of China as a force for good in Australian politics and our commentary reflects that.
Climate change policy and what The Rum Rebellion stands for…
Instead of facing these issues, Australian politics is tearing the country apart. One of the chief culprits is climate change. Climate change and what to do about it has been a key destabiliser of national politics since it increasingly became a political issue from around 2007.
The Rum Rebellion is a libertarian voice. While we think all governments are corrupt and self-serving, out of principle we particularly abhor the ‘government knows best’ views emanating from the left of centre.
We don’t pull punches and we don’t accept money from advertisers, so we can tell it like it is.
On this page you can find all our political analysis. We cover topics in US politics, Australian politics and pretty much any political factor that could move markets.
You may disagree with us, or even be offended. We aren’t fussed though, we take freedom of speech seriously.
You’ll recall from yesterday’s Diary that there are only two important things a president has to do: He has to protect the American people…and their property. Like two banks of a river, they can never be entirely separated.
The more power a person or institution has in society, the less trustworthy they tend to be. I don’t say this because it’s fun to be cynical, I say this because my life experience has…
Birds gotta fly. Fish gotta swim. And a degenerate empire has to find its way down from the peak, one stumble at a time. Each president has to take the fall assigned to him.
As foretold, more stimulus is on the way. Biden says the feds have a ‘moral obligation’ to provide money they don’t have to people who don’t need it.
Lockdowns may cost more lives than they save. This is important when weighing the total effect of a public health policy across all of the population.
Like the Jeff Bezos-owned Washington Post moniker, ‘Democracy dies in the darkness’, it’s just a slogan. The US is controlled by a political oligarchy that has only grown more powerful via its alliance with the…
Somewhere in this once-great nation, a real revolutionary — young, angry, determined, and smart — practices before the mirror…searching for the right pose…looking for the right words…
Stock markets go down as well as up…all paper money eventually goes back to its intrinsic value (zero)…and all empires decline, sooner or later.