Let’s ask a simple question: Would the world be better off…or worse off…if governments completely ignored COVID-19?
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.
The most known of knowns in financial markets is the China Evergrande Group debt crisis. Will it or won’t it be allowed to fail? Will this be the modern-day Lehman Brothers moment?Markets are pondering these…
The government have announced a deal on nuclear submarines in concert with the US and the UK. It’s a good move and the start of what I hope is a nuclear industry here in Australia.
Retail sales, a key gauge of China’s consumption, rose just 2.5% in August from a year earlier, down sharply from July’s 8.5% year-over-year growth, according to data released Wednesday by China’s National Bureau of Statistics.
And the story, while reported as truth by the major media, might just as well be a total fantasy. It makes more sense as a fantasy. But then, so does most of the news.
But what if the price of bitcoin plunges overnight and the $100 of bitcoin the business accepted yesterday is only worth $50 today?
The result? Here too, freedom paid off. Different sects competed for hearts, minds, and souls…and generally flourished without resort to violence.
I have friends and family who are still in Australia. I care deeply about what’s happening. It’s sad and unnerving to watch. But it’s a complicated issue.
Each time, the new team could scarcely have been more different from the one preceding it. ‘A new departure,’ said the press each time. But what was new?