We’re living in the depths of a housing crisis across much of the Western world. The last thing you’d want to see is our leaders wanting to raise taxes on housing, hoarding investment properties or falsify documents to get housing loans.
Yet we’re there.
In the US, President Trump announced on Tuesday morning that she would remove Federal Reserve Governor Lisa Cook. The reason? Mortgage fraud. The Director of Federal Housing Bill Pulte revealed she lied about her primary residence to access lower interest rates.
What was her stance on the Federal Funds Rate? Keep the rates higher.
You can criticise me for picking at nits.
Would I want to pay a higher interest rate on a loan (if I had one)? No!
Can I vote on a decision to maintain economic stability that may contradict with my preference? Definitely! That’s what independence is about, separating a business decision from personal ones.
Her misconduct is in her dishonesty to claim what doesn’t belong to her. She didn’t live in that house but claimed she did.
For someone with a public profile who makes decisions affecting so many people and the financial system, this was a bad look.
It doesn’t stop with Lisa Cook. Watch as more scandals drop.
The siren call of higher taxes
Moving on.
Back here, we’ve been hearing about the government reviewing more taxes. Not just on unrealised gains on selected superannuation balances. They are now reviewing proposals to increase the Goods and Services Tax and even on spare bedrooms in your house.
Hold your outrage though. The government hasn’t passed these yet. It’s floating these ideas.
But God forbid if these pass Parliament.
There seems to be a trend in Australia and the West to try and equalise society by increasing taxes. Theoretically those who own more assets should end up paying to fund society and cover the needs of those who have less.
However, you can expect that those passing the laws won’t want to be paying their fair share, especially when they stand to pay a hefty sum.
Australian politicians are notorious when it comes to holding property portfolios. There’s little difference whether it’s the ALP, Coalition, Greens or Independents. In early 2024, a study by Leith van Onselen revealed that more ALP MPs owned more than two properties, after adjusting for their party representation in Parliament.
Politicians and their property portfolio aside, we have an unhealthy appetite for fawning over those who buy expensive properties. Obsequious real-estate columnists, hyped up glitzy reality TV shows on home renovations, and wall-to-wall advertisements from banks peddling home loans.
Australians hear the message loud and clear: Your life isn’t complete unless you bought a home.
Hence people do it, even if the price is excessive and they don’t have the means to pay it off.
Perhaps what should annoy you is that many Australians were lured into investing in real estate almost 40 years ago by politicians passing laws to help us temporarily. These include negative gearing, exemption on gains for primary residences, and discount on capital gains tax on investments. Then came the falling interest rates that gradually pushed the price of residential property to stratospheric levels in most major cities.
These measures aren’t all wrong, per se. However, they eventually created a perverse incentive and benefited more those who made the decisions. Now that the horse has bolted out of the gates, the same measures hurt those who come in later.
The deepening divide between the
leaders and its people
What was once a dream that was within reach has transformed into a nightmare as many ride the treadmill that speeds up, threatening to throw many off.
Decades on, many Australians have mortgages up to their eyeballs. Fertility rates are down. The domestic economy is spluttering. Government deficits skyrocket.
Housing affordability fell especially after the subprime crisis of 2007-09 when interest rates fell for many years. What used to cost around 3-5 years of average income in the 1980s have blown out to double or even triple that, with Sydney and Melbourne being the least affordable.
Here’s a graph showing how Sydney house prices have become increasing out of reach today compared to three decades ago:
The younger generation is hardest hit simply because they were born after the biggest boom. They can join this game by signing up for a 30-40 year contract to get into the market.
Out of exasperation, they have sought to vote for someone who would redress the balance for them.
They didn’t even have to wait too long to find out what this government wants to do – redistribute wealth.
These people are sheltered with a cushy job and a rich asset portfolio. It’s easy for them to convince us that they will pass laws make the rich pay for the poor. Sounds noble, right?
What the young generation don’t realise is that it won’t distribute enough for them to get by. Not when the moneyed class have an arsenal of ways to deflect the responsibility that they are supposed to shoulder. They have multiple properties, accountants, trusts, offshore accounts, and connections in high places.
If more taxes would make a more equal society, then Australia should be one of the greatest place to live. Except we have seen anything but.
When politicians from both sides of the aisle become richer while in power, you don’t need me to tell you that it’s a two-tier system.
Staging a quiet resistance
There is an undercurrent of dissatisfaction in our country about where we’re heading.
I only hope that Australians will find a civil and peaceful way to express this. Even though it’s unlikely to motivate the ruling class to change, let’s hope there is some miracle.
This Sunday will see many Australians march in the major cities in the March for Australia rally. For all the anxiety over whether this could turn violent, I hope that it’ll be like all the other rallies we’ve seen thus far.
I believe there’s a smarter way to resist the encroaching government control that we can exercise individually everyday. It’s a prolonged process requiring discipline and doesn’t involve physical force or a sharp tongue.
Financial independence. This involves taking some of your wealth outside of the system and into something that preserves purchasing power.
Gold fits the bill. You can buy physical bars and coins and take your wealth outside the system. You only need to pay tax if you sell it back to a bullion store. The gains you earn are yours otherwise, and its value has beaten inflation and many assets in the past 50 years.
Let me show you gold’s performance vs bonds and stocks during 1970-2025:
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You may argue that gold may be more volatile than the other two because it had more years of negative returns.
But are you sure that stocks are safer than gold? Really?
Anyway, if this interests you and you want to start building your precious metals portfolio, I can help you start.
Check out my investment newsletter, The Australian Gold Report. Besides buying gold bars and coins, I also reveal to you how buying shares in gold mining companies could boost your returns, with added risk.
That’s it from me this week. Take care and hope this weekend will be peaceful and incident-free.
God Bless,
Brian Chu,
Gold Stock Pro and The Australian Gold Report
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