Geopolitical Compass #2
Geopolitical Compass #2
Australia increasing retirement taxes and 'doping' gold sales. US taxes rising. Iran & Saudi Arabia reconciling. Canada attacking foreign investment & free speech. Antarctic ice growing.
Notable events in geopolitics and capital markets this week. Expand your perspective, gain context, and discover actionable insights.
Australia
Changing the Rules
Slowly but surely the Australian government is tightening its clutches on the nations retirement funds. Viewed as 'only applying to the rich,' there is poor understanding from the wider populace that this is how increased wealth confiscation always starts. A small increase in a rate here, a removal of an exemption there. Over time inflation will work its magic to move people closer to thresholds, those thresholds will be dropped, tax rates increased and age to access moved further away.
While funds in retirement accounts legislated by governments may be notionally yours, in reality they're a honey pot ripe for each new government to pilfer at their leisure. Anyone contributing additional funds to their retirement should only do so in assets and structures they have greater control over.
Perth Mint Sold Diluted Gold to China
The Western Australian Government owned Perth Mint has been caught selling $9 billion of ‘doped' gold bullion to China.
The mint began doping its gold as a cost-saving measure in 2018, expecting to save up to $620,000 a year — a tiny fraction of its annual sales.
Verification of purity is virtually impossible for normal investors in gold outside of trusting the source (sources like the Perth Mint). Conversely billions of dollars in value can be transacted in Bitcoin and be verified as real in 20-60 minutes on an immutable ledger, no trust in the other party required.
Canada
Foreign Investment
Once considered one of the safest mining jurisdictions in the world, the Canadian government is trying hard to ruin this reputation by continuing to tighten foreign investment rules.
"We are determined to work with Canadian businesses to attract foreign direct investments from partners that share our interests and values," said a spokesperson for Industry Minister Francois Philippe Champagne.
However, the government's crackdown could rebound and hurt Canada as the mining industry underpins a large part of the country's economy, investors and analysts say.
Anyone is welcome to invest..... except China. Once Canada loses capital allocators trust, it will be a hard task to regain it. Trudeau's retirement from office because he knows he stands no chance of re-election has achieved all he set out to can't come soon enough.
Ministry of Truth
George Orwell’s Ministry of Truth is coming to Canada. This is the epitome of purposeful destruction of a nation and betrayal of its citizens. The only question is how much havoc he can wreak before he’s finally ousted.
Climate
An inconvenient truth for the climate doomsayers - Antarctic ice is increasing.
A new NASA study on the Antarctic Ice Sheet says that an increase in Antarctic snow accumulation that began 10,000 years ago is currently adding enough ice to the continent to outweigh the increased losses from its thinning glaciers.
The research challenges the conclusions of other studies, including the Intergovernmental Panel on Climate Change’s (IPCC) 2013 report, which says that Antarctica is overall losing land ice.
According to the new analysis of satellite data, the Antarctic Ice Sheet showed a net gain of 112 billion tons of ice a year from 1992 to present. That net gain slowed to 82 billion tons of ice per year between 2003 and 2008.
Georgia
‘Democracy’ Groups Mobilise
Georgia introduced a bill to parliament that did not go down well in corridors of power outside the country:
Protesters have been seen waving the flag of the European Union – which Georgia applied to join last year – and those of the United States and Ukraine, as well as the Georgian flag.
The controversial legislation would have required organizations receiving 20% or more of their annual income from abroad to register as “foreign agents” or face heavy fines – a proposal that rights experts warn will pose a chilling effect to civil society in the country and damage its democracy.
Protestors were activated to ensure the bill was withdrawn. They didn’t even need a cookies delivery from Victoria Nuland. Ten thousand protestors in the street carrying EU, US and Ukrainian flags to prevent not the banning of, but simply registering of a group that receives more than 20% of its funding from external powers (aka all of them).
Bilderberg funded ‘democracy movements’ are becoming more transparent by the day.
Interestingly the US, Canada, UK, EU, Australia etc all have their own Foreign Agents laws including the need to register without any specific funding minimum….. yet they seem very opposed to Georgia introducing one of its own for some reason.
Global
Media reporting a drop in inflation rates in recent months ignores the ‘lower rates’ are on top of an already higher base from the previous two years increases. These stats also completely ignore shrinkflation taking hold worldwide. Don’t be fooled.
Middle East
Saudi Arabia and Iran have agreed to resume relations and re-open embassies, a deal brokered by China. The Global South led by China is increasing diplomacy and co-operation as the US-led West deteriorates, inciting and prolonging tensions.
While the EU struggles to locate and desperately confiscate any Russian wealth it can get its hands on, United Arab Emirates are already becoming the new Switzerland, with Dubai in particular a magnet for foreign capital. Capital always goes where it’s treated best.
Large ramifications for future wealth generation and protection.
NATO
Unprepared for the War It’s Pushing For
An excellent piece outlining the realities of a war between NATO and Russia. Politicians in the West agitating for escalation of tensions seem to think if NATO forces were to become official belligerents in Ukraine (as opposed to the active servicemen mercenaries from the West currently in the country), Russia would still have the good manners to contain the conflict inside Ukrainian borders once she is openly attacked, also waiting for the enemy combatants to become fully trained and transported to the front line along with their equipment and logistics.
In reality, all NATO countries would immediately open themselves to reprisals including painting a target on every ministry, military and defence facility throughout Europe, the UK and the US.
All this matters, for two reasons. Firstly, no government today has made serious provision for continuing to run the country during a conventional war, with the risk of air and missile attack. In the earlier days of the Cold War, there were plans for governments to go underground during the conventional phase of any war in special shelters, a number of which still exist. But towards the end, nuclear weapons had become so accurate and powerful that it was thought very unlikely that any of these facilities would survive a subsequent nuclear attack, and so they tended to fall into disuse. So effectively, not only are NATO nations unable to defend against such a conventional missile attack, they have no means of protecting what is called the “continuity of government” from such attacks either. So a missile on the Elyséé Palace, one on the Defence Ministry and one on the Land Forces HQ at Lille, and that would be about it for France, for example.
The realities of what all-out war would look like to those who should know better including NATO’s Stoltenberg of German Foreign Minister Annalena Baerbock is apparent:
In many European cities, government and military facilities are clustered close together in the centre of the capital. This means that much of the city-centre itself would be at risk. It’s not at all clear, in most countries, where government could decamp to in a crisis so that it could continue operations. Even if it were possible to evacuate the senior figures of government to a nominally safer place, it would be necessary to close at least the centre of some cities down completely to the public (since some government services would have to remain and thus be targets) and there would be no way of preventing the spontaneous evacuation of tens or hundreds of thousands of ordinary residents as well. In effect, with modern levels of car ownership, motorways would soon be jammed with people fleeing sites that were expected, or rumoured, to be on the Russian target list.
To be clear, with the advent of hypersonic missiles - the United States would be no better off than Europe. The problem lies with the US establishments reckless disbelief of this new reality and clinging on to the narrative that Russia is still just a gas station. Even the long-fabled New Zealand bolthole of the elite is no longer safe in the event of all out war.
To those fearing war, this essay should provide unexpected comfort. It is not feasible for the West to wage war on Russia outside of nuclear weapons, so commentators in the West repeatedly bring up the subject, not Russia, which does not need to go nuclear, even in the event of a broader conflict.
Russia
Degredation of Western ‘Geopolitical Analysis’
An excellent piece from Alastair Crooke on what has become of Western ‘geopolitics’ - simply another propaganda weapon used to drum up support and keep its populace in line. The realisation of reality can be delayed, but never permanently. Russia is executing as planned and achieving its goals in Ukraine is reality. Clashing directly with the narrative being spun by and for Western policy makers that Russia is about to implode almost every day.
The real danger comes when those with ulterior motives (Bilderberg and its stooges like Nuland and Ursula) are faced with open defeat and what desperate actions they take to save face.
This is why Rambling Investor finds it so critical to follow geopolitical reality when analysing capital markets and potential investments. The truth is always there in plain sight for those with critical thinking and ability to ignore propaganda.
United Kingdom
British propaganda really could use some better script writers. Can someone explain in the comments below why BBC is not labelled 'state sponsored media' as Russian, Chinese and Iranian outlets are?
United States
Summary of Biden’s Tax Increases
Capital gains tax increasing from 20% to 39.6%
Top tax rate raised from 37% to 39.6%
Corporate tax rate raised from 21% to 28%
Self employment tax raised from 3.8% to 5.0%
Increase IRS funding by 15%
25% minimum tax rate on households with $100 million+ net worth
Removal of tax-loss harvesting for crypto investors
Elimination of carried-interest tax break
Stock buyback tax to rise from 1% to 4%
Coming to a Western country near you. Prepare yourself accordingly.
Research Insights
Recent interesting reports, commentary and investment insight.
Goehring & Rozencwajg Q4 Letter
Crude oil fundamentals are very tight and risk getting considerably tighter. Investors continue to starve energy companies of much-needed capital, the lifeblood of a solid supply base. Although the trend of lower spending has been in place for several years, our models tell us we are nearing a critical inflection point: the growth in shale oil production -- the only source of non-OPEC+ production growth over the past two decades --- may be coming to an end.
With high likelihood Suriname will become a new oil frontier adjoining the massive field developments offshore Guyana, perhaps a good time to familiarise yourself with the country.
The country’s relatively stable political environment will be key to attracting further inbound FDI in the medium term, especially as Suriname seeks to commence offshore oil and gas production and exports and become a leading producer nation. This follows the recent discoveries of large commercially producible oil and gas resources offshore by several IOCs including France’s TotalEnergies and the US’ Apache Corporation.
ASPI’s Critical Technology Tracker: The Global Race for Future Power
Western democracies are losing the global technological competition, including the race for scientific and research breakthroughs, and the ability to retain global talent—crucial ingredients that underpin the development and control of the world’s most important technologies, including those that don’t yet exist.
China is further ahead in more areas than has been realised. It’s the leading country in 37 of the 44 technologies evaluated, often producing more than five times as much high-impact research as its closest competitor. This means that only seven of the 44 analysed technologies are currently led by a democratic country, and that country in all instances is the US
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