Financial Rebellions: Investors Are Pushing Back

We are living through a very unique period in financial history. 

On one side, we’re in the midst of an amazing technological revolution. Software and new technologies are streamlining the way the world runs. Advances in renewable energy are picking up steam. Medicine is leaping forward in new and incredible ways.

There are, however, troubling financial storm clouds on the horizon. The entire world economy — with a few minor exceptions — is piling up debt like there’s no tomorrow. Total global debt in 2020 reached $281 trillion. That’s equivalent to an eye-gouging 356% of worldwide GDP. That’s up 35% from 2019. And don’t get me started on unfunded liabilities (Medicare, Social Security, etc), which is a whole other can of worms.

In Europe and the U.S., interest rates are lower than they’ve ever been. And they’re likely to stay that way as long as central banks can manage it. Savers are getting crushed while speculators are richly rewarded.

As a result of these and other factors, America is losing faith in its largest institutions. A recent Axios-Ipsos poll asked people how much they trust the Federal Reserve to look out for their best interests.

A full 60% of respondents said they don’t really trust their central bank (the Fed) to look out for them. Unfortunately, I can’t find any historical polls on this question to judge the long-term trend. But I suspect it has been trending down since at least 1971 when we moved fully off the gold standard and inflation raged.

Trust in the U.S. government is even worse. A Pew Research poll that shows the percentage of people who trust America’s government “all or most of the time” has dropped precipitously over time.

When that survey began in 1958, 73% of people trusted the government. The most recent reading from March 2019 shows that only 17% feel the same way now.

Financial Rebels Popping Up

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