Worldview Investing - Ruminations on the World Economy

                         " The Gleaners " by Jean Francois Millet, 1857      During the Middle Ages, European peasants worked land owned either by a wealthy nobleman or the church. The terms of their indentures required them to devote about 165 days of labor a year to their overlord. In the painting above, peasants gather grain that has fallen to the ground during the harvest process. The fruits of the harvest went to the land owner. The workers could keep what they managed to "glean" and grow a the small plot allocated to them. Russian serfs were required to devote some 150 days of labor to their overlord. Thus, the labor of these workers was "taxed" at a rate of roughly 44% (160/365). They were also periodically dragooned into their lord's army to fight wars they played no role in starting and from which they received no benefit. While this scheme allowed the nobility and church hierarchy to le...

  Herbert Hoover, Source: The White House                                                          The UK has a new prime minister and the US will soon have a new president. Will they be met with a historic financial crisis like Hoover soon after his election? Both will lead nations that are in dire financial shape. Neither leader will meaningfully address the twin problems of massive government debt and huge budget deficits. Both will face relentless pressure from the legions of government benefit recipients to expand spending yet further. Their problem is that taxes can only be raised so far before workers storm Washington and London with pitchforks and torches. Therefore, their likely "solution" will be to further debase their currencies. Of course, doing so will devastate wage earners, savers and pensioners liv...

                                                 Source: Shutterstock   History is rich with failed empires: the Roman Empire, the Inca Empire, the Mongol Empire, the Macedonian Empire, the Ottoman Empire, the Spanish Empire, the Russian Empire, the British Empire. Though each stood  atop their world for a period, they all fell prey to the same cause. They became overextended and could no longer support the cost of their empire even after extracting tribute from their defeated enemies and colonies. Their end often came suddenly. The Decline of the American Empire      Today, the US struggles to maintain the empire status that it achieved following World War II. The US takes great pride in claiming that it is "The Indispensable Nation" that has not just the right to interject itself in other nations' business but the dut...