Take the blue-pill take the red, it doesn’t really matter to me. Keep your head down and work hard, I’m sure you’ll be happy.
We’ve been living in a sweet dream for about 40 years in ‘the West’, a dream where the markets seem to always go up and the bad news is always “over there” and not at home. But it’s high time we start questioning the script. Are we building phantom wealth on the back of ever-lower interest rates? Is the media giving us the full scope of international affairs, or just what fits the left-right narrative we get everywhere else?
As the world moves towards a multipolar stage, what should everyday investors really be focusing on? I’m more than happy to be ignored or even labelled a ‘fringe-minority’, but at some stage very soon, the time for taking action may be coming to a close. This isn’t a critique on society, or any group within it; it’s a call to action for anyone concerned about their financial future.
The Mirage of Phantom Wealth
Let’s talk about the last 40 years. Interest rates have made lower highs and lower lows in each cycle, and savvy investors have taken advantage of this, without necessarily crediting the true cause (loose monetary policy). You buy assets, and you float – it’s really that simple. The tide, seemingly, raises all boats. But if we’re entering a ‘higher for longer’ interest rate environment, as the signals suggest, that boat may start to sink, and the time to take action is when the masses still can’t see it.
The Blind Spots in Media Bias
When we flip on the news, whether it’s about the Middle East or international economics, how often do we question what we see? There’s a whole other world of geopolitical play happening behind the scenes—like the roles of Iran, Russia, Turkey, and China in the Middle East. And don’t get me started on the BRICS nations and their growing influence. It’s not just about having an alternative viewpoint; it’s about realising that the world we’re shown is only a small slice of a much larger, more complicated pie. There’s no ‘right’ or ‘wrong’ view and thankfully, there’s many ways you can explain some of the events unfolding right now. As it relates to you and I though, the everyday investor, the main reason why we invest the way we do, is that we believe [mostly] what we’re told. What if there lurked an undisclosed bias which is setting us up for a fall? How would we ever see it coming, when we’re more focused on the color of the boot, than the strength of the boot about to hit our necks?
Brace for a Multipolar World
It’s not the future; it’s practically now. We’re rapidly moving into a world where multiple major powers call the shots, not just the U.S. or the Western bloc. What’s more concerning is the rise of a heterogenous financial system that could be command and controlled from the top down. Think multiple interest rates that serve different economic and political agendas. How? Central Bank issued Digital Currencies, or programmable money. You don’t have to believe this is inevitable if you don’t want to, but you should consider it.
The Everyday Investor’s Crucible
So, what’s the play here for the average Joe and Jane? If the new rule of thumb is higher interest rates for longer, it might be time to look at more than just diversified asset classes. Think about tangible assets, alternative currencies, and markets outside the traditional sphere. Remember, relying solely on old strategies in a new world is akin to bringing a knife to a gunfight. Consume media from both sides of the political discussion, and news sites from the West and the East. Think mainstream, ‘socially acceptable’ thoughts, and the alternative fringe conspiracies – question why anyone would try and stop you from thinking for yourself. Watch the latest episode of the Everyday Investor with Michael Every, Global Strategist with Rabobank.
The world’s not just changing; it’s transforming. This shouldn’t be new information to you – but how you choose to respond and what action you take (ideally with advice) may be new. From the illusory gains in an era of lowering interest rates to the media that skews more than it informs, to a global shift towards multipolarity, the rules of the financial game are being rewritten. For everyday investors, it’s time to wake up, rub those eyes, and see the world for what it is—a place where old strategies may not only be obsolete but might also be a ticking financial time bomb.