Loud and clear — the tide turns again st the Australian elites

Thursday, 19 October 2023 — South Melbourne

[8 min read]

Dear Reader,

Last Saturday was a pivotal moment for Australia in many ways.

The referendum on ‘The Voice’ revealed a resounding ‘No’, as almost 61% voted against proposed changes that would effectively remove the separate sovereignty rights of Aborigines and Torres Strait Islanders and provide them with additional rights as Australian citizens in return.

Interestingly, none of the six states had a majority of voters supporting change. Only one territory, the Australian Capital Territory, delivered a majority of ‘Yes’ votes.

The table below showed the results as of Wednesday at midday:

What was most surprising was that a larger proportion of voters from the Northern Territory didn’t support this motion, despite the state having possibly the largest proportion of Aborigines and Torres Strait Islanders in our country.

Furthermore, it was the inner city and the most affluent electorates that voted for the change. Suburbia and rural voters weren’t on board.

Even before the referendum took place, a significant proportion of Aborigines and Torres Strait Islanders voiced their dissent. While it’s hard to estimate exactly the proportion that voted for or against, it was clear that the Albanese government’s claim of more than 80% supporting this move was likely overstated.

The results of this referendum may’ve helped to prevent Australia from the impact of unintended consequences of changing our Constitution.

As they say, the devil lies in the details, which were the glaring omissions from the Albanese government and those in the ‘Yes’ campaign. I covered this in last month’s article ‘Fix the Economy, Stupid!’.

Perhaps the most important outcome of the referendum was that the ordinary Australians raised their voice collectively to tell The Australian Establishment — comprising political leaders, corporations, academia and the mainstream media — that they were out of touch.

History may mark 14 October 2023 as the symbolic Battle of Midway that turned the tide in favour of the ordinary folks.

The subtle and silent robbery of the masses

For many years, people around the world have had their freedoms and wealth silently taken from them.

It happened slowly and subtly and especially here, in the so-called ‘lucky country’.

While governments around the world bailed out failing banks and property trusts during the subprime crisis — using taxpayer funds and newly created fiat currencies borrowed from central banks — Australia was largely sheltered by the commodities supercycle.

We were one of few countries to not live in a zero-interest rate environment — at least until 2020.

Some of you may recall how the Reserve Bank of Australia started raising rates in late-2009 till late-2011, when it changed course to slowly cut rates to near 0% in 2020.

Many Australians felt uneasy about the rising cost of living and the increasing debt burden as they clamoured on board the property bandwagon. As interest rates slowly dropped, property prices rose at an accelerating pace:

To make things worse, the salary of an average worker couldn’t keep pace with the rising property prices. Therefore, they took larger mortgages which take longer to pay off, with the banks benefiting the most from a longer stream of interest payments.

This led to a nightmarish combination of working more for less, getting deeper into debt, and paying for longer.

It was a perfect robbery committed 24/7, year after year. Sadly, many Australians were unaware it was happening.

Worse still, trying to get out of this trap was nearly impossible. The only way was to suck it in and chisel away at the ball and chain of debt.

Meanwhile, those at the top make fine promises, concoct trivial controversies and approve the occasional stimulus payments to quell the masses.

The hubris of the elites who ‘failed to read the room’

The elites had invested heavily on their campaign. The government spent some $450 million to run this referendum.

Think of what that amount of cash could’ve done to relieve the hardships of the ordinary Australian household!

But one thing that was worthwhile was to see the salty tears of these elites and their sheer hubris in the face of a crushing defeat.

They had the gall to tell the public that they voted wrong because of misinformation! Celebrities came out and expressed their outrage and browbeat the public because of the majority who didn’t agree with them.

The host of Ten’s The Project, Waleed Aly, might best sum up how insufferable the elites are and the contempt they hold of you and me if we voted ‘No’.

On Monday, he claimed that the messaging for the campaign was too complicated for the ordinary Australian, because there was a strong correlation between the level of education attained with how they voted.

Put bluntly, he wanted to insinuate that Australians were too simple-minded so they didn’t vote as the elites hoped.

Most of you would find this insulting to say the least! I for one have over two decades of working in the tertiary education industry and therefore am an intellectual equal with them.

As for corporations that spent millions of dollars promoting the ‘Yes’ vote, it’s clear how the boards and management now have egg on their face after getting it so wrong.

Given now is the time of the year where companies are holding annual general meetings, I sure hope we see many shareholders hold the boards accountable. They deserve scathing criticism for spending company funds promoting a minority view and destroying shareholder value at the same time.

A revenge served cold, but perhaps too late

Unlike the 2019 Federal Election where Scott Morrison delivered a surprise victory, this referendum was more decisive and delivered a clear punch in the guts against the entire elite establishment in Australia.

The key difference this time was that they went all-in and suffered such a setback.

The neglected majority has had the first taste of vindication against those who lord it over them.

Their voices are now heard loud and clear.

If the elites in Australia don’t want to go the way of what we’ve seen with wokeism in the US (go woke or go broke), they better start changing their strategy.

But alas, are we too late in taking back control of our country from the edge of the cliff?

After all, our country’s national debt is now over $9 trillion and rising fast.

That’s why, despite our nation’s riches in commodities, our dollar isn’t strengthening against the US dollar like it was in 2011–12. It’s fallen to levels seen during the market panic over the global virus outbreak in 2020.

One bright spot to this is gold, which is at all-time record high levels over here:

It’s doubled in eight years, meaning those who have bought gold over the years are able to preserve their purchasing power and wealth.

And just so you know, central banks and countries around the world have been scrambling to buy gold — especially in the past two years.

What is it that they know that they’re keeping hidden from you?

I wouldn’t trust them to have your best interest in mind.

Look at how they spent millions of dollars to tell you they know better. When their game backfired on them, they chucked a hissy fit and abused you.

Besides our resounding ‘No’, why not stick it to them by storing some of your wealth in real money and taking back more control of your life?

Precious metals and mining stocks are a great alternative to keeping your house in order. Check out my precious metals investment newsletter, The Australian Gold Report. I’ve got the Ultimate Gold Game Plan to help you get started!

God Bless,

Brian Chu,
Editor, The Daily Reckoning Australia

Dear Reader,

Through September, the US government had already borrowed $1.7 trillion, so far this year. It is on target to reach a total of $2 trillion before the year is out. This is the second biggest borrowing spree in history (after 2020).

We doubt this record for borrowing will hold for very long. Ms. Janet Yellen says the US can afford to back the Ukraine on the Eurasian Steppe and Israel in the Levant — at the same time. Business Insider:

‘The nation's top treasury official said the US does not have to pick and choose between aiding Israel and Ukraine in their ongoing military conflicts.

‘It's been just over a week since Israel officially declared war on the Palestinian militant group Hamas after the group attacked several towns in southern Israel. Since the war began, President Joe Biden and US lawmakers on both sides of the aisle offered support for Israel, while at the same time pushing for the country to preserve innocent Palestinian lives in Gaza.’

Guns and Butter

Lyndon Johnson famously declared that the US was fully capable of paying for ‘guns and butter’ — referring to the Great Society at home and the Vietnam war in Southeast Asia.

But the Biden team has gone further — with two ‘wars’ overseas…while the churner churns butter 24/7 at home.

Johnson’s guns and butter campaigns were both flops. The Heritage Foundation calculates that $22 trillion has been spent on Johnson’s War on Poverty. But the poverty rate was 14% in 1965. Today, it is about the same.

And the war in Vietnam ended as it began — disgracefully. The North Vietnamese won the war and took control over both North and South Vietnam.

But Johnson’s ‘Guns and Butter’ spending had consequences. It produced the inflation of the ‘70s along with the fatal change in the US money system of 1971. What will be the fruit of the ‘guns and more guns’ program of the Biden Bunch? We wait to find out.

But let’s take a guess. Inflation? Two failed ‘wars?’ More poverty?

Not Worth a Dime

This year, interest on the federal debt is at $883 billion — about even with the Pentagon budget. It is expected to pull ahead in the years to come as the debt pile gets larger and interest rates go up. Federal debt is already reaching up to $34 trillion. Each year, more and more of it must be refinanced — at higher and higher rates.

US Treasury debt is the safest credit in the world — because the feds can print all the money they want. But the money paid to lenders back in the Johnson years is not the same money they get back today. And the money they get back tomorrow is not going to be the same as the money they get back today, either. According to the BLS, the 1965 dollar is now worth about 10 cents.

Except for the decade of the 1970s, inflation rates were actually stable or coming down for most of that period. This time, the feds are running bigger deficits than ever — with a $50 trillion federal debt expected by 2030. And this time, interest rates are going up, not down. So each additional increment of debt is more expensive. Which means, the feds will have to borrow money to finance their wars…and borrow money to pay the interest on the money they borrowed to fund their wars.

Another thing that is different: globalisation is not driving down prices the way it used to. In 1978 China began a series of reforms that turned it into an economic powerhouse. ‘To get rich is glorious,’ said Deng Tsiaoping, as he unleashed some 500 million people to provide cheaper and cheaper products for Western consumers. That trend has played itself out. Workers in China are no longer content to work for peanuts. Imports into the US are no longer dirt cheap.

Higher Price Ahead

What else might make tomorrow’s inflation worse than yesterday’s? The industrial revolution is no longer providing big increases in productivity. And the ball and chain of regulations, restrictions and petty-fogging paperwork has gotten heavier and heavier. As a result of all of these things, US GDP is growing at only about half the rate it was during the Great Society era. Less output inevitably means higher prices.

Putting it all together:

While Wall Street is generally celebrating the big drop in inflation since last year, the actual inflation rate has gone up for the last three months. Did it bottom in June? Are we in for higher and higher prices…as far as the eye can see?

We don’t know. But that river never stands still.

Regards,

Bill Bonner,
For The Daily Reckoning Australia