Economic freedom starts with a culture that values it
October 17, 2022
[EDITOR’S NOTE: The following is an excerpt of our special report, The 7 New Safe Havens, available to Nomad Capitalist email subscribers. Get on the list now to get your copy of the free report.]
Dateline: Vilnius, Lithuania
I’ve said over and over that the new safe havens are all about culture.
The culture of a country says a lot to me about how useful it is as a place to invest, protect assets, or live. Economic freedom starts with culture.
Take one look at China. Like it or not, it is a culture built on hard work, industriousness, and saving. When Chinese tourists vacation in Europe, they often hit multiple cities in a single day. In part, they do this in order to maximize the number of different photos they take to show their friends how rich they are. But they also do it to be efficient, and maximize their time.
I read an article about a Chinese tour group in Europe that actually mocks the local culture. The tour guide starts the day by playing the character of his stereotypical local in Spain or Italy. “Oh, we’ve woken up… let’s smell the coffee beans”, he says mockingly, waving his hand in the air slowly to show the thoughtful pace of Europeans.
Then he breaks character. “No, we need to move fast!” The tour guide explains that European culture — and its economies — are dying because of the slow pace many Europeans have embraced. He pokes fun at their 36-hour work weeks, something none of the newly rich Chinese in his group can even fathom. They’re used to working 50, 60, 70 hour weeks to get ahead.
And when they do get ahead, they save. And save. And save some more. While I don’t always agree with their chosen vessels for such saving (California real estate, etc.), there is no doubt they think about the future, and how to leave the next generation better than they were.
While China is not perfect, I believe that the Chinese culture is one to watch. When I visit a new place, I will often joke that I’m looking for the Chinese people so I can follow their local investment strategies.
Don’t confuse a country’s culture with its government.
How does U.S. culture affect its economic freedom?
Now, contrast a forward-thinking culture like China with the culture of the United States. I’ve long said the US is the “Paris Hilton of countries”. Somebody, a long time ago, did something so great economically that the benefits are STILL trickling down to people who, generations later, have no clue why they’re rich.
They just know they’re rich. (Just not as rich as they THINK they are; Singapore is now the world’s richest country.) Combine that affluence with a jingoistic arrogance and you have the United States of today. The reality is, the Chinese government isn’t so bad when you compare it honestly to the US government. After all, who likes to start more wars, jail more people, and steal more private wealth than “America”?
It turns out… no one. Yet most Americans are blissfully unaware that any of it is happening because they’ve been force-fed the propaganda that their country is “The Land of the Free”.
To them, “America” is perfect. The economic holocaust hitting the rest of the western world “could never happen here.” It’s almost as if many Americans believe their country has some kind of magic pixie dust floating in the air that prevents their country — and only their country — from any kind of hardship.
I’m guessing you’re different than the average person in your country. You can see the writing on the wall, and you realize that no place is exempt from the effects of bad policy.
I don’t care how wealthy a country once was; when it prints out dollar bills like ink-jets are going out of style, there will be consequences.
That’s how Argentina went from being one of the five wealthiest countries in the world, to a bankrupt totalitarian state in less than one century.
When a country racks up nearly $20 trillion in debt fighting imperialistic wars and creating fake stimulus programs that don’t create jobs, there will be a price to pay.
Honestly, many of the people around you don’t NEED to care about this stuff. They already pay very little tax, if they pay taxes at all. They may be the recipient of some form of government cheese. Their business may have lucrative contracts with the government.
These people are benefitting from the party going on just a while longer… as long as it’s not at their expense. In reality, they’re more than happy to make it YOUR problem.
What does a lack of economic freedom mean for you?
Several years ago, I was living in Ireland when the country passed a levy on all income earners. Everyone had to pay 2% of their salary towards this special levy to help stabilize the country. While I’m no fan of taxes, I have to admit that at least it was applied evenly.
And while the Irish didn’t like having to pay the extra tax at a time when they could afford it the least, there wasn’t a ton of “make the rich pay” that you get in other parts of the world. Everyone took their medicine together.
If you have assets in the United States, you should know you won’t be that lucky. Your neighbors don’t need to care about the coming economic collapse because they won’t be the ones paying the price.
Yes, they will ultimately pay the price when their job is shipped overseas to a more favorable jurisdiction (or when minimum wage goes to $15 an hour and McDonald’s replaces them with a computer).
But you will be the one who will see the full effect of the death of the West. Your retirement funds will be converted into worthless government paper, if not seized. Your taxes will go through the roof. You will have capital controls imposed on you, prohibiting you from moving large amounts of money, or from taking money out of the country.
They may even confiscate your gold or other assets. At the very least, they’ll legislate you into poverty.
You likely live in a culture that doesn’t respect wealth. Today, those with wealth are demonized. You may think that you are exempt because you don’t have “a lot of wealth”.
But history shows us that “a lot” is subjective. If you earn $10,000 a year in Cambodia, most people there would consider you “rich”. “Rich” is subjective. It starts out targeting the Rockefellers, but eventually trickles down to anyone with one dollar to their name.
After all, most people in the United States have a negative net worth. To them, simply not owing anyone could be considered “rich”. If you own a business, have investments, own stocks or mutual funds, or take nice vacations, you’ll become Public Enemy Number One.
The government will see you as a prime target from which they can extract wealth. You can’t cure fiscal recklessness simply by taking in more money. So, once the government has extracted all the money they can from the “1%”, they’ll need more. And they’ll eventually get to you.
I believe that associating with people who understand what is going on in the world is of paramount importance. Living your life amongst people who don’t understand what is coming — or who believe they stand to benefit — will only discourage you from doing what you need to do.
Someone with a mortgage that’s underwater, $500 in a checking account, and three overdrafts doesn’t need an offshore trust. They have nothing to lose and, chances are, they’d be more than happy to take your money in the form of unemployment benefits, food stamps, child care credits, and whatever else when the time comes.
Find a group of people who share your values and understand what is coming; then, work together to build a strategy that maximizes your freedom, your business and investment opportunities and your life enjoyment.
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