Right now, the way I see it, there are two major forces at play against one another. Centralisation and decentralisation. One way centralisation can increase is through central bank digital currencies (CBDC).
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.
There is only one conclusion to make here. The elite owners of the media, the established layers of government bureaucracy and big, big business, are all allies working to rig the system in their favour.
Trump added $4.5 trillion to the national debt in four years in office — even without a last-minute $2 trillion giveaway. That doesn’t sound like paying off the national debt. It sounds like the road…
Today, we examine the record of Mr Donald Trump’s presidency. Does the Big Man deserve re-election? And what will happen if he is defeated?
For now, the market is ignoring the fact that the constant injections of ‘free money’ comes with the cost of making the economic fundamentals worse. It is sowing the seeds of the market’s long-term demise!
Don’t wait too long to take action. The attack on your freedoms is gaining speed. None of this is surprising if you read what central bankers have been writing the last few years…
This is the RBA’s attempt to set expectations and promote confidence. The RBA appears to be under the same impression that the Bank of Japan, the ECB and the US Fed are…that they can create…
Beware the central bank digital currency promising efficiency, innovation and convenience. It’s likely to be just another tool of control.
This is a government-caused crisis. You can argue either way on whether this was absolutely necessary. But the fact is the government mandated the shutdown of the economy.