“Global” is the New F-Word
Welcome to the new week!
This weekend, the Legacy Media inadvertently bombarded me with all sorts of evidence globalism is failing.
Whether it’s the supply chain, tax agreements, or coordinated money printing, lousy policy has created a disaster.
It’s “Groupthink” at the highest levels, where those who grossly overestimate their individual intelligence come together to become collectively dumber.
If there’s a screaming reason to prefer a small, administrative government over the Leviathan whose tentacles currently squeeze earthlings in a vice-like hug, this is it.
Before we have a look, let me tell you a story.
London, October 1999
Twenty-two years ago this month, I landed at London Heathrow. I was thrilled, and I couldn’t wait to get settled into my new digs in the United Kingdom. I had lived in The States all my life before.
That previous June 1999, I had been on my first business trip to London.
I loved it so much that I finagled myself a transfer. It is by far the ballsiest and best move I have ever made in my entire life. I’m still pleased about it.
The week I arrived, I made friends fast. I was invited on that first Saturday to attend the Australian rules exhibition at The Oval.
The Oval is a cricket ground in South London. And for those of you who don’t know, Australian Rules football is actually played on a cricket pitch.
(A “pitch” is what they call the field.) The Australians invented it to have a sport to play in the cricket off-season a long time ago.
I had been one of those kids who watched Australian rules football at 3 AM occasionally when it popped up on American cable television.
I was intrigued, so I went with my new friend, Adrian. We had a great time, and like most sporting events in England, I got drunk pretty quick.
The Rugby World Cup of 1999 was on at the time, so after the Aussie rules game, we went to a pub.
It intrigued me because Ireland was playing New Zealand, and I just couldn’t believe the two teams played each other. Dublin is 11,289 miles away from Auckland, as the crow flies.
That’s about a 24-hour flight. So seeing the Kiwis and the Irish play each other in the same sport was refreshing and unique and fantastic—quite the contrast from the Giants-Jets preseason games.
As I was getting beered up, I took one of my countless trips to the bathroom. I remember standing there next to a guy who clearly played rugby.
He was about a foot taller than I was, and maybe his shoulders were about a foot wider… and I’ve got broad shoulders.
I try not to be one of those guys who talks in the bathroom, but we just happened to catch eye contact in the mirror.
I still had a very thick New Jersey accent at the time.
He said something to me that was never said to me in New York, where I was a perpetual member of the Bridge and Tunnel Club.
I had mentioned to him, “Yeah, this is amazing. I just got here on Wednesday, and I’ve been to an Aussie rules exhibition, and I’m watching the World Cup on television with everybody. Pretty amazing.”
He memorably said, “Man, you’ve been here about a week, and you’re already one of us.”
I thought that was brilliant. Believe me, at that moment of my life, I thought globalism was the greatest thing that was ever invented.
Unfortunately, the reality is far different, and back then, in 1999, rules were getting loosened.
That’s because the Nasdaq crash hadn’t happened yet. Sure, there was still the Basel Committee on Banking Supervision trying to run the whole world, but they had pretty much no teeth.
It wasn’t until the Nasdaq crashed and then, eight years later, the Global Financial Crisis, when regulatory agencies and central banks went power-mad.
And let’s be fair, they went power-mad because governments bailed out the banks.
That’s why bitcoin was invented. That’s why everyone’s pissed off right now. That’s why inflation is running rampant.
All the money printing had to be done to bail out all the banks
And of course… well, let’s raise taxes for some good measure.
The knock-on effects of all this bad policy are being played out in the Legacy Media, not the alleged “tin-foil hat” websites.
Supply Chains and Beached Sailors
I was perusing online my Wall Street Journal this week, and it was amazing.
If a cargo ship becomes uneconomical or can’t get it offloaded in time, what the owner will do is just disown the vessel and leave the crew on it.
Many of these crews get stuck on these ships for years, waiting for their back payments. And they can’t get back to their families because there’s no way home.
It’s an absolute travesty, wholly immoral, and these shipowners should be prosecuted.
But unfortunately, the Middle-Eastern nations never signed the agreement that the rest of the world signed to protect these crews, so they usually say something like the Arabic equivalent of “no más.”
So not only do you have ships that cannot offload their material, you’ve got ships that are being completely abandoned altogether.
Heck, it’s so bad now Home Depot, Costco, and Walmart are resorting to private charters to stock shelves for Christmas shopping.
In times like these, China’s Belt and Road Initiative starts to look like a good idea.
Coupled with that idiotic global minimum tax being agreed to by 136 nations, you can see the tentacles I alluded to before.
Global Minimum Tax Approved
Let’s start with the fine print.
Ireland secured a deal to keep its 12.5% tax rate for companies with annual revenue less than the OECD threshold of €750 million and prevented France and Germany from using the OECD deal as an excuse to raise European taxes.
Most European tech companies don’t make this kind of revenue.
The big billion-dollar revenue companies are all in the states.
So most of the companies that are in Europe will not even be affected by this.
This entire sham was to enable the Democrats to raise taxes on Facebook, Twitter, Apple, and Amazon to extract more funds for them to pay for their stupid pet projects in Washington.
What no one realizes – and this is just a complete joke of it all – is that Federal Reserve’s money-printing enabled Silicon Valley to make all this money.
Now, follow this chain.
Fed prints money. Most of that money goes to Wall Street straight away, because it goes to the commercial banks first.
What do commercial banks do? They look for the projects with the highest ROI.
Where are the projects with the highest ROI? They’re in Silicon Valley.
Silicon Valley entrepreneurs don’t gamble much of their own money.
Marc Andreesen, Ben Horowitz, and Vinod Khosla are billionaires, so they must invest their own money in these projects, right?
Sure. They put a little down, but the rest of the money is from outside investors, asset owners who’ve disproportionately benefitted from the Fed’s largesse.
Who are those asset owners?
Pension funds, insurance companies, endowment funds, high and ultra-high net worth individuals, and other buy-side players such as asset managers and hedge funds.
Private equity and VC are making outsized profits because of the government, not despite the government.
And now, the government simply wants its piece.
Janet Yellen and her ilk thought it’d be much easier to raise taxes on Facebook if the rest of the world wouldn’t allow Facebook to hide its profits in other countries.
She might get them in the end.
But this will not be an enforced agreement worldwide. Maybe in letter, but not in spirit.
In fact, I think this is quietly going to go away. Not yet, but soon
Then, we’re going to realize that Peter Thiel was right and that 2007 was the peak of globalization.
What I think we’ll see after this is the balkanization of our world economy.
The world’s nations will start going their own way, looking after their voters, but only after the pain of the status quo remaining is greater than the pain of changing things.
Heck, we might even get some central bank competition. This cooperation stuff is way overrated.
Have a great week ahead.
All the best,