These days feel a bit like a pressure cooker. Government’s all intrusive presence is starting to work on my nerves and likely on the nerves of many others. I hear more and more talk about the libertarian life philosophy and Ayn Rand. Donald Trump is a demagogue phenomenon resulting from people’s discontent. We’re giving up our freedoms bit by bit. Your government full of unelected officials who run their little empires and who run circles around our so-called elected representatives. Those same 'elected representatives' make careers out of working from elected office. We’ve had school teachers who spend a few years in the election machinery and become PM; real estate moguls running for president and social workers running for president. In Alberta we have a school teacher running the energy department. Now they receive salaries comparable with managers in the private sector and defined pension benefits that others dream off. They are ‘advised’ or is the better term ‘manipulated' by un-elected officials specialized in their respective departments and accountable to … who???? Today, wages of many civil servants, especially when including their benefits, are what many private sector workers can only dream of. A high school teachers with 3 months’ holidays making 6 figure salaries and again that defined benefit pension which is by itself worth millions. (just do the math: what is the value of an $80,000 annual pension when interest rates are 1 to 2%. Yep, close to $4 million!) Who is working for who??
Then there was privacy. Oh, we need to give the government special privileges to monitor its citizens. After all you can get killed by a terrorist any moment now. And you have to register every piece you own directly or indirectly with the government. You make a large deposit to the bank, your government knows all about it through its ‘money laundering’ legislation. What do they do with your health records? With your tax information? Oh… and they monitor even your email?
Then you have the private sector leadership. Apple knows where you are when using their i-phones. It is not their fault; they have to report it to the government, yeah... right! So does Samsung. Microsoft has a camera in your living room! Talk about 1984! Your phones also scan your iris and your finger prints. All is for your convenience… but if you don’t accept all their intrusive monitoring then just don’t load the app. Yes, try doing banking off-line in an increasingly cash-less society? Then you get the endless rotation of corrupt corporate leaders: board members; CEOs; Chairman of the Board. They all have to get paid a lot of money and if they fail… they get an even richer hand shake. Oh… and they know where you live; how you buy, what you buy, what your credit rating is. Do I have to go on?
In the meantime, the economy is barely growing. Real wages are falling or stagnant. Part is due to technology. Even with a large cheap labor force, China cannot compete with robotics. The bankers are manipulating interest rates and commodity prices by controlling derivatives that cover any underlying asset such as all the gold in the world; all oil in storage or to be produced over the next 2 years; all copper; etcetera many times over. There is this story that when you take all Gold ETFs and Options, then there are 500 gold owners per existing ounce of Gold. Similar for Silver, etc. So who really sets those prices, the manipulating trading houses such as Goldman-Sachs or the ‘free-market’?
Occupy Wall Street, The ‘One Percent’, Donald Trump, Jean Marie Pepin, Brexit, etcetera are all expressions of people’s discontent with today’s affairs. No wonder everyone is frustrated and feels helpless in today’s world. No problem – feel helpless? Marvel has a superhero movie for that! Terrorism, Climate Change, the H1N1, SARS, and lately the Zika Virus are all ways to scare the crap out of people; to make them submissive and willing to give up even more freedoms. The Press has a field day with 30-sec clip politicians who scare the heck out of the people about these frightening issues. “We can make a Law for that”. “Let’s jail Mr. Zika! Eh… eh…”
We have people losing confidence in their political ‘leaders’; in their economic system – what is government debt? 200 or 300% of GDP. What the economy is still not growing? Let’s rob some more (private sector) retirees from their pensions and have negative interest rates! What, that doesn’t help? What about a 11-billion-dollar deficit? What about a Trillion-dollar deficit? What used to be doomsday forecasters of impending ‘End-of-the World’ scenarios is gradually becoming main stream. Not because we are more easily scared! Gosh, we get so much scariness in our daily diet, we must become immune! No, the ‘End-of-the World’ scenarios are becoming more likely. Try to cash in on your bank account lately? You probably need to make an appointment and fill out some bank and government Fin Track forms. Oh… you must also wait for about a week or three before we have your cash here at the branch.
In the meantime, government debt is going through the roof. Loans are taken out to buy back shares; sub-prime loans are what drives GM’s car loan sales. Haven’t we learned from 2008? Why does Vancouver’s real estate value shoot up (until your politicians made yet another 'reasonable' law)! Because, Chinese and other overseas investors are afraid for their own government and try to hide their assets often including kids in a more political ‘stable’ environment. In Alberta we have rectified all environmental issues in one blow – tax the crap out of your depressed economy and your citizens by implementing an hydrocarbon charge that makes your eyes hurt! Just wait until the average gullible Albertan feels this in his wallets!
So yes, if you have a feeling we’re living in a pressure cooker and something nasty will happen sooner or later. You may be right. The more I learn, the more I start to believe that we are moving towards a breaking point. The ‘breaking’ may be a sudden snap or it is something that evolves over several years. People will get sick of the scare mongering oppressive society where nobody dares to speak-out because of the ‘political correct’ backlash which sometimes amounts to nothing different than a public lynching. I suspect there will be one or more triggers – excessive abuse of privacy invasion; another big layoff; a bankruptcy where once again numerous small investors are holding the back while the ‘big guys’ with anxiety in their faces and a golden handshake on their back are moving on to the next group of gullible shareholders. An accounting scandal or a particular nasty automobile recall. Whatever, the trigger – something will give and then it will be once again you and me who hold the bag. Because, the guys who ran this racket scheme won’t end up in jail; they will drive away in a Rolls Royce and pose at the ‘new leadership of change’.
No wonder, the Donald has such a large following regardless of what he says – as long as it is not the ‘Establishment’ friendly Hillary! Yet, it doesn’t matter who wins. Maybe like last time, we’re ending in ‘political gridlock’. That is another word for ‘big-fat-pay-checks-and-no-solution’. And in the end, the system comes crashing down. Maybe not closed stores; maybe you will keep your assets and we avoid big civil riots. But your dollar may end up worthless, because nobody believes in the system. A big market crash where you lose a large portion of your retirement savings – What? Yet again? This is why many ‘legendary investors’ like George Soros start to flee into gold. Because it is the only asset, as proven by history, that may take over the role of money. When push comes to shove and short of plain barter, gold may prove to be instilling a lot more confidence as a currency than some corrupt government’s paper IOUs.I am not saying sell everything. I don’t know what will happen. But I have more confidence in real assets – a house, a repair shop, trees, oil, a garden, a service you can provide – than a piece of paper. And one of the most valued assets that can act as the ‘new money’ is gold. It is also more difficult to track gold by 'your friend the local politician’ who sells you out in Ottawa or Washington. I feel we’re living in a pressure cooker about to blow up. Will it or not? How should I know? But owning a portion of your wealth in gold may not be such a bad idea. But be careful where you store it and keep it away from your Nest Security camera (Google), Xbox or smart phone. Do you think that after this world blows up, you still are going to use a cell phone? :)