We’re trying to straighten out some of the confusion about ‘inflation’. It refers to a specific phenomenon — falsifying prices by raising (inflating) the money supply which leads to strange, scammy, and out-of-this-world outcomes…
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.
Over the last 14 years, the real rate of GDP growth — adjusted for inflation — was under 1.3%. So even a 3% increase in the supply of money would be twice as much as…
Climate change is coming…but not the one you think. The political climate is where the heat is going to be felt the most.And it’s this political response we must watch closely…
China’s phenomenal growth over the three decades — 1980s, 1990s, 2000s — was the result of a dependence on exports, particularly to advanced economies.
The soaring levels of government debt and central bank money printing — not to mention private sector leverage — virtually guarantee it. We’re closer to the end than the beginning.
The whole of the US society is being zombified…turning into a slouching wreck…with a hollow-headed, self-serving elite at the top — enriched and corrupted by three decades of stimmy money and fake interest rates…
Take this with a grain of salt, but my view is that this inflow of capital into China is a one-off. The pandemic certainly produced some unintended consequences.
The Biden bunch wishes to transform the government, making it bigger and better than ever. To make a long story short, what they are really doing is zombifying the whole country.
Monday is Memorial Day in the US. It’s a public holiday commemorating the death of all those who served the US in uniform. In that sense, in spirt, it’s a lot like ANZAC Day.