Forecasting is easy, in Australia. You only need to look at what’s already happening overseas. And predict it will eventually come to our shores.
From COVID to inflation to the collapse of renewables to the rise of fringe political parties, it’s worked like a charm.
Of course, Australians like to think we’re immune from overseas influences. That we’re better.
We can stop a pandemic at the border. The same loose monetary policy won’t cause the same high inflation rate here. Our banks don’t lend to sub-prime borrowers. Our immigrants are more polite than Europe’s. And our voters are more willing to stay in an abusive relationship with their local MP.
So, there’s no need to worry about what’s going on overseas. Those idiots don’t know what they’re doing, that’s all.
No matter how often we’re proven wrong, we sustain our belief in being special.
The real Australia Bubble isn’t in housing
Australia is clearly in a bubble. Not just a housing or economic one. I mean that we think we’re insulated from the world’s chaos. A bubble of suspended disbelief.
On the one hand, there is some truth to this. By most metrics, we really are better off.
But even that just exposes how deluded we can be. We point to how unaffordable housing is. Or how tough the jobs market can be. We complain about inflation. And how there’s too much immigration.
But if you make the debate a matter of comparison to other countries, it’s obvious. Australia really is miles better than any other country by just about every metric.
The real question is whether our success and stability has made us more complacent as well. Whether, beneath the veneer of economic, political and financial calm, a storm is brewing precisely because we’re not used to having a real one.
Are we actually vulnerable to a shock, purely because none ever seem to happen to us?
Looking for trouble
Ten years ago, I moved back to Europe. The largest global financial crisis since the Great Depression hadn’t even caused a recession in Australia. So I wanted to get out of the bubble and experience some proper chaos for myself.
I certainly got served plenty of that!
I watched Syrians get chased across fields by the Austrian police. My mum kept two Syrian couples in her house for a while.
I worked with Nigel Farage on The Fleet Street Letter – a publication which predicted World War II down to the month.
I staged a sleep-in protest at a bank’s Canary Wharf branch just to get an account.
I got charged by mounted German riot police after stumbling into a Jewish/Palestinian protest and counterprotest.
I travelled to more than 30 countries in 3 months as part of The Free Market Road Show. Just when I thought our troupe had returned to the stability of Western Europe, I caught a whiff of tear gas in Paris.
I got rescued from a Turkish hospital by two local ‘heavies’ after the doctors refused to let me leave.
I watched a famous Australian businessman get dragged off by Ukrainian border guards despite being about 70 years old.
I hosted an interview inside the European Parliament after getting smuggled in by a famous London trader known to me only as ‘Moose’.
And then the pandemic began…
I think we can safely say that my bubble got popped.
But I want to warn you that Australia may not be able to sustain its stability much longer. Because foreign trouble is once again headed our way…
The Populist Internationale is
coming for your Super
The latest issue of Jim Rickards’ Strategic Intelligence is about the rising poll performance of Europe’s MAGA style politicians. Populists are now in the lead in 6 of the 10 largest economies in the world. Some are already in government.
Jim Rickards and I claim that there is a big difference between a few populist politicians running a few countries and a group of them at the head of the world’s key developed market economies. Think of it as some sort of critical mass.
The international community could soon be led by MAGA-styled politicians. Leaders of institutions like the IMF, central banks and EU could soon be appointed by populists.
It’s already happened in domestic institutions within countries like the US and Italy.
Even in Australia, they seem to be gaining rather a lot of traction lately. After yesterday’s news, you could even say their ranks are swelling…
What does all this mean for investors?
Well, the one thing the populists have in common is the desire to steer investment dollars into the projects they favour. They don’t just want more economic growth. They want to steer it in a particular direction.
Trump is engineering a commodity and energy boom by opening up Federal government land to resources companies, for example.
Italy’s Prime Minister is pushing her country’s pension funds to invest in local infrastructure projects.
In Japan, the government is demanding more domestic investment too.
So, it’s only a matter of time before the Australian government comes for your Super. They’ll tell you where it must be invested.
If you want your own money to be at your own mercy, you might want to start thinking about the Super system as a trap.
Change is afoot. Investors cannot be caught out pretending the world hasn’t changed.
The bubble that insulated Australia is once again at risk of popping. It’s time to take action like never before.
Regards,
Nick Hubble,
Strategic Intelligence Australia
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