[4 min read]

Dan Denning

Dear Reader,

Good news everyone! The American news media has told us who the next president of the US is. You might think this is presumptuous, given that the vote counting is still going on in some states. And that legal challenges to alleged vote fraud will have to make their way through the US court system.

But a news media that beat the drum for four years on Russian election hacking claims is convinced, after about four days, that there’s ‘nothing to see here’ in the US and that it’s time to move along. Miraculously, as crowds gathered in New York City, Los Angeles, and Washington DC to celebrate the announcement, the coronavirus apparently decided it would allow thousands of people to celebrate an end to Donald Trump Era without any risk of community transmission.

Love trumps contagious diseases! Or perhaps the contagion had become a political football months ago. And now that the ‘desired’ result is in, the contagion will magically go away. Hmm.

Bottom line: from a legal/procedural point of view it’s still not over. But in the contest for control of the political narrative, it IS over. When you create the ‘news’ that it’s over, events begin to take on an unnatural momentum of their own. It’s not dissimilar to how bull markets work, actually. It takes a change in narrative to change the momentum (like a court throwing out tens of thousands of ballots, for example).

But speaking of momentum, does a Joe Biden victory mean it’s time to go all in on tech stocks again? The US markets seem to think so. The logic? That divided government in the US — with the Republicans in control of the US Senate and Democrats in control of the White House and the House of Representatives — means a lower chance of more government stimulus (fiscal spending) and more pressure on the US Federal Reserve to keep interest rates low (party on, speculators!).

Who knows? Democracy dies in deficits, not darkness. And the deficits have happened in broad daylight. The deficit grew by almost under $5 trillion in Donald Trump’s four years in office. It’s now $27 trillion. If you throw in over $150 trillion in unfunded government spending (Social Security, Medicaid, public pensions), it’s clear the US printing press will have to run hot until something breaks (either the dollar as a reserve currency or US government bonds as a ‘risk-free’ asset.

By the way, Donald Trump was hardly a ‘fiscal conservative’. No one in Washington is anymore. Joe Biden isn’t. The Republicans in the US Senate aren’t. And the communist Alexandria Ocasio-Cortez and her ‘squad’ in the US House of Representative most definitely aren’t. No one has been for a long time.

This matters to investors because the US is just one of many countries that’s gorged on debt since the 2008 debt crisis. You can’t grow your way out of these levels of debt. Ultra-low interest rates — including those set by the Reserve Bank of Australia — are the result. Highly leveraged economies like Australia and the US — where household, government, and corporate debt are all looming problems — can’t afford higher rates.

This puts investors in an awkward and risky position. Income investments that are safe and pay a respectable, dependable dividend (or a real interest rate above 3%) are hard to find. You can buy hybrid securities and exotic exchange traded notes and funds that manufacture a yield synthetically. But rule of thumb: if it sounds too good to be true, it probably is.

Or, you can throw your lot in with the rest of the trend-following crowd and get back on the tech/momentum bandwagon. That bandwagon may pick up some speed in the 70 days or so between now and when Joe Biden is sworn is as the 46^th president of the United States. Biden may not have a compliant Senate. But he has the power to issue executive orders that favour certain industries (Green, solar, renewable) over others (oil, gas, fossil fuels).

That’s the thing about the US system of government. The vast administrative bureaucracy of what Australians would call the public or civil service is mostly under the power of the Chief Executive in the American system. The president is the chief executive and can change or direct regulatory policy in dozens of different agencies, run by either political appointees or lifelong civil service employees who are most definitely not answerable to the voting public.

And you thought your vote mattered? This ‘Administrative State’ (or deep state) is where power now resides in Western democracies. Its policies are informed by ‘experts’ and academics, most of whose financial interests lie with bigger government. Populism is out. Centralism is in. If you haven’t got the message yet, turn the TV or radio on and you can’t miss it.

Centralism doesn’t mean doing ‘the right thing’ or things for ‘the common good’. It means more power to the state and less freedom and liberty for individuals and families. Biden’s election effectively presses ‘fast forward’ on our slow march to a permission-based economy and society. Technology provided by Silicon Valley will enable mass surveillance and enforcement of this permission-based techno-authoritarian living arrangement.

This is definitely not the liberating and empowering technological revolution we were promised in the late 1990s. In the near future, you must get permission from government authorities about where you can work, when you can work, how much you can be paid (or paid NOT to work).

You’ll be given instructions on how far you can travel from your home (or IF you can travel without proving you’ve been vaccinated). And if you don’t provide a ‘reasonable’ excuse for why you’re further from home than you should be (the very word used in the UK’s new lockdown regime), you’ll be fined and subject to arrest.

Are you beginning to suspect the pandemic has become a Trojan horse to usher in all the authoritarian fantasies of psychopaths in government, Silicon Vallely, Hollywood and the media? Hmmm. It’s almost like the ‘great reset’ was designed by people who couldn’t persuade the public that climate change was a cause to reorder society.

Instead, we got a global pandemic. That pandemic has accelerated the worst centralising trends that were already in place: one world money, one world government, and a worldwide surveillance culture that watches, scores, and if need be, punishes your every move. Surely it can’t be that bad, can it?

Stay tuned! I’ll be talking with Vern Gowdie about the implicates of ‘The Great Reset’ later today. For many people, the US election marks a turning point away from an ugly and hateful period in politics. But for all of us, regardless of your political disposition, it merely accelerates some alarming trends that affect your financial and political liberty. If you haven’t taken steps to secure both already, you’d better hurry.

Until next week,

Dan Denning,
Editor, The Rum Rebellion

PS: The price action in gold, silver, and bitcoin is a sign that at least some people know what is coming. Government deficits will reach new heights. New forms of ‘money’ (central bank digital currencies) will be introduced and might replace cash as legal tender. Early adopters of cryptocurrencies, and long-time adopters of ‘real money’ (gold and silver) want out of the financial prison system being built for your savings and wealth. If you want to make a move, you’d better do it before capital controls close the borders for your money.