Pub Talk from Juncker
Pfäffikon SZ, Switzerland – As 2015 approaches slowly but surely, many market researchers make risky statements on the market, interest rates, oil and the gold price. It is utterly pointless to spend your time on those things because no one is in possession of the infallible crystal ball. Sound positioning of your investments does make sense, but is a different discussion entirely. Since the financial crisis of 2008 politicians have been scratching their heads on how to avoid these painful situations. Financial shifts, however, are of all times. But still, the financial freedom of movement of the global citizen continues to be curtailed.
Grip
For years politicians have been trying to get more grip on you and your pension. The US, today, is probably the craziest of the bunch in this respect. Sometimes I speak with Swiss residents who have lived in the US for a certain period of their lives. The insane fiscal manhunt by one of the largest democracies in the world is remarkable. But if you believe the EU isn’t quite that bad off, you are mistaken.
Gag
Fiscally, in many ways you are being gagged. Ultimately it’s the government that decides what you do with your possessions. Remarkably there are many accountants that consult their hearts out without taking financial freedom into account. In the Netherlands, as a private person, you are for instance forced to to reinvest a possible overvalue of your house in the home to be purchased. By now you know that a house does not always increase in value. It is certainly an investment risk and when, after years of slogging, you finally book a profit, politicians decide what to do. Parking your savings on a saving account is pointless, especially here in Switzerland. I routinely see inventive solutions as a substitute pass by, but I am no fan of financial engineering. Moreover the aspect of low interest rates as risk is being grossly underestimated by homeowners, but that just as an aside.
Further curtailment
There is a high probability that the legal and fiscal curtailment of the presumed-to-be-free European citizen will pick up steam. The president of the ECB – Mario Draghi – is about to pump a lot of money into the European economy. Additionally, the newly appointed chairman of the European Commission – Jean-Claude Juncker – recently launched an utterly transparent leveraging plan in order to stimulate the economy. It came across to me as pub talk. It is apparent that Juncker has been schooled by the illustrious bankers of Lehman Brothers. Moreover it is noticeable that banks will spend billions to invest in IT in order to find out how you behave, by leveraging your social media accounts. Watch dogs are rubbing their hands in glee, your privacy has become a utopia.
False sense of freedom
When the EU gets in to a deeper financial mess, politicians will use the situation to further shackle the European citizen in different areas. I frequently hear politicians say that the Euro and the European Union exist for the freedom of the citizen. This is a misunderstanding. The EU continues to emerge as a small child that always wants her needs met at the expense of her citizens. Russia and Switzerland by now know what I am talking about.
It remains for me to wish you a good weekend.
Jan Dwarshuis is a senior asset manager at Thirteen Asset Management AG, where he is responsible for the Thirteen Diversified Fund. Dwarshuis writes his columns in a personal capacity and is not paid for them. Nor is he paying for his columns to be placed. Professionally, he holds positions in major European, American and Russian stock funds. The information in his columns is not intended as professional investment advice or a recommendation to make certain investments. At the time of writing, he has no position in the above shares and has no intention of doing so in the next 72 hours.
