Editor’s note: The editors and staff at The Australian Tribune are taking a break for the holidays. We’ll be back at our posts on 2 January 2019. While we’re away, we hope you’ll enjoy some recently published issues of The Rum Rebellion.
The Rum Rebellion is a new free daily e-letter brought to you by Port Phillip Publishing’s Head of Research Greg Canavan. The service provides a uniquely Australian voice commenting on the nexus between money, stocks, politics and economics. Greg has a libertarian view of the world and believes in free speech, individual freedom and personal responsibility. Every day in The Rum Rebellion, he seeks to tell you about how the world really is, not how the world’s vested interests wish it to be.
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The following article was originally published on 26 November 2018.
Welcome to The Rum Rebellion!
This is the new name of the Harry Dent Daily e-letter. It better reflects our fresh focus on Australian money, economics, stock market and political issues. Given the Australian economy is heavily dependent on trade, we’ll also keep a close eye on global economic and political developments.
And, of course, you’ll still get updates from Harry Dent when he writes.
With so much happening in the world right now, and global stocks on the cusp of a bear market, it’s a perfect time for The Rum Rebellion to launch.
Why that name? If you’re familiar with early Australian history, you’ll know that’s where the phrase comes from. We’ll explain what it all means in a moment.
First, let’s take a look at two issues impacting Aussie stocks today.
Oil prices are in crash mode. In Friday’s US trading session, Brent crude fell another 6.7%, while US oil prices plummeted 7.7%.
There are two ways to view this. One is via the glass half full approach. Sharply lower oil prices provide a much needed consumer tax cut through lower fuel prices.
The glass half empty approach says plunging oil prices signify a sharply slowing global economy.
While the global economy is slowing, we doubt that it hit a wall as the oil price plunge suggests. Oil is a very political and manipulated market. The Saudi’s drove the price higher as it planned to float 5% of its national oil company, Saudi Aramco. Higher prices inflate the expected value of the deal.
Our guess is that the Saudis are now increasing supply to get prices down, following pressure from US President Donald Trump. The killing (or alleged killing) of Jamal Khashoggi put the heat on the US/Saudi alliance. This could be ‘payment’ for Trump sticking with the Saudis.
By the way, if you want to get a different take on the Khashoggi affair, check this out from an investigative journalist on the ground in Turkey. Most of the stuff you read in the establishment media is a narrative fed by governments and/or intelligence agencies. In which case you need to take it with a large grain of salt.
That aside, the oil price plunge is another indication that global stock markets are slipping into a general bear market. Lower petrol prices are great, but not necessarily if they’re the result of falling demand across the board.
As Labor rises, stocks fall
The other issue that will hurt the local market going forward is the result from the Victorian state election over the weekend. Daniel Andrews’ Labor government won re-election with an increased majority.
That it did so despite being completely ineffective (and borderline corrupt) tells you that the electorate is either asleep, or that they have rejected the Liberal Party en masse.
If that’s the case, then Scott Morrison doesn’t have a hope in the federal election, expected in May. As much as the Libs are an organisational rabble right now, wait until socialist Bill Shorten gets in and starts running the joint.
As far as we can tell, Australians have been completely sucked into this ‘do something on climate change NOW or we’ll all die’ business so completely that we’ve lost our heads. And the Libs don’t know how to counter it intelligently.
I mentioned Labor’s climate change spending plan last week. They should hope that energy storage technology catches up very quickly to their virtue signalling ideals. Their desire for a 50% renewables target is economically irresponsible. It will result in higher prices and an increasingly unstable energy grid.
But you reap what you sow in life, so if we vote them in, we’ve no one else to blame.
Needless to say, the stock market won’t like what happened over the weekend. While it already largely factored in a Labor victory, sentiment can always get worse…
On that depressing note, let’s move on…
The Rum Rebellion…what’s it all about?
In short, we wanted a uniquely Australian name to represent our new focus and mission. Before explaining why the name is especially fitting, let us outline what The Rum Rebellion e-letter is all about.
The Rum Rebellion is a uniquely Australian voice commenting on the nexus between money, stocks, politics and economics. We have a libertarian view of the world and believe in free speech, individual freedom and personal responsibility.
While we also believe in the virtues of free trade and sound money, we recognise that most of the world’s players don’t share this view. We therefore seek to tell you about how the world IS, not how we wish it to be.
As a libertarian voice, The Rum Rebellion believes in small government. It laments the increasing intrusion of government into our lives. In 2016, Australian government spending as a percentage of GDP hit a record high of 26.6%. That represents a huge mis-allocation of our resources.
For that reason, The Rum Rebellion is an outspoken critic of governments, government spending and politicians talking out of the corner of their mouths.
Successive governments have sold Australia out to the highest bidder, selling off critical energy infrastructure, agriculture and water assets, while encouraging speculation in property that has left us with net foreign debt of $1 trillion!
But it’s not only government that needs a clip across the ears. The Rum Rebellion will call out all forms of power mongering and unethical behaviour that hurts the average Aussie. So, captains of industry and the fake news media will also come under our microscope.
Most importantly though, we’ll be talking money and stocks. If you manage your own portfolio, or just want to take a greater interest in the world of money, The Rum Rebellion will become an indispensable daily companion.
With 20 years of investing experience, we’ve seen it all. We’ve lost money and made money. Most importantly, we’ve lost enough to have learnt some pretty good investing lessons, and will happily impart what little wisdom we have garnered over the years to you in these daily essays.
The Rum Rebellion will hit your inbox Monday–Friday. We hope to get a weekend edition up and running too. And a new website is currently under construction. I’ll let you know when it’s good to go.
Now, what’s the name all about?
Well, as patriotic Australians, we wanted to have a uniquely Australian name for a daily e-letter that will predominantly cover Australian politics and finance.
The Rum Rebellion fits the bill nicely. It is a largely forgotten tale of early colonial history involving the tussle for economic ascendancy, and a rejection of government incompetence and control.
While the name Rum Rebellion is generally well known to most semi-students of Australian history, the involvement of rum was only a peripheral issue.
‘The Rum Rebellion’ moniker only emerged many years later, after an English Quaker by the name of William Howitt published a popular history of Australia. Being a Quaker, he was keen to blame the ‘rebellion’ on alcohol. The name stuck. That just goes to show you the power of narratives — even false (fake news) ones.
Alright, to the story…
After its establishment in Sydney on 26 January 1788, the British convict colony merely tried to survive. But after a few years, it became more prosperous and began trading with the outside world.
The ‘governor’ ruled the colony, taking instructions from London. The NSW Corp was like an early security force, tasked with carrying out the governor’s instructions.
The officers of the early corps (which included John Macarthur, of sheep breeding fame) were allowed to engage in trade alongside their official duties. This saw them gain significant power.
They gained this power by having a monopoly on trade. When trading ships sailed into the harbour, and after the government replenished its stores, the officers bought up the rest of the cargo, and onsold the goods to the inhabitants for a huge mark up.
But their stronghold on trade didn’t last long. Soon, ex-convicts entered the market, diminishing the officers’ power. The upshot of this episode was the emergence of an entrepreneurial class in the new colony.
This entrepreneurialism also grew as a result of the land grant system. Among others in the colony, the NSW Corp officers were given significant land grants and free convict labour to cultivate land and grow produce. If convicts wanted to work extra hours, they were paid in goods, which more often than not was rum.
The NSW Corp was therefore heavily involved in the trade of rum, and was often referred to as the Rum Corp.
John Macarthur was the pin up entrepreneur of the time. He had been experimenting with sheep breeding for years and had created some of the finest merino wool in the world.
The Macarthurs of the colony continually clashed with the governors. Modern day scholars believe this was the result of London wanting to maintain a primitive convict colony, while the new settlers wanted the economy to thrive.
The tough and tyrannical William Bligh arrived in Sydney in the role of governor in August 1806. He encouraged the early colony to focus on basic agriculture, rather than the development of the wool trade, overseas trade, or the development of manufactures.
He also reduced the number of land grants significantly. Of the 1600 acres he issued, half were to himself and his daughter.
He immediately clashed with the former NSW Corp officer, and by now, very wealthy, John Macarthur. Bligh threatened to remove Macarthur’s land grant of 10,000 acres at Camden in south western Sydney.
Bligh then took Macarthur to trial over one of his trading ships, but the jury of officers from the Corp refused to recognise the court.
The commanding officer of the Corp, George Johnson, with the obvious encouragement of Macarthur, said Bligh needed to be removed from office
So, 20 years after the founding of the colony, on 26 January 1808, men from the NSW Corp marched on Government House in Sydney and arrested Bligh. Johnson, if only for a short while, took command of the colony. But within a few years, he, Macarthur and Bligh would be back in London facing court-martial over the incident.
It was the first and only military coup in the country’s history. And in true Australia fashion, it was accomplished without bloodshed.
As mentioned earlier, the rebellion of the NSW Corp had nothing to do with rum. But the name stuck.
At its core, the Rum Rebellion was a fight for the economic development of Australia. On one side was the government who wanted to maintain a primitive convict economy, on the other side were the free settlers and entrepreneurs who wanted trade to flourish and the economy to develop.
That’s not to paint the free settlers and entrepreneurs in too positive a light. They too could be greedy and devious, and ready to take advantage of their fellow colonists for personal gain.
This is just the way of the world. There is a constant battle between the core ideology of government control of the economy, and a free market. But the absence of regulation opens the door for unscrupulous characters to pursue profits and power, and then use this power to create barriers to trade and cement their position.
It’s no different in Australia today. The market and the government go hand in hand. In fact, the involvement of government in all aspects of society these days would make John Macarthur blush and William Bligh rejoice.
The Rum Rebellion humbly seeks to be a voice for liberty-seeking citizens of Australia, guarding against both government encroachment in our lives and corporate chicanery.
If you like what you read in these daily emails, feel free to forward onto friends and family. Knowledge is power. A knowledgeable citizenry is a powerful antidote to ever increasing government control.
Editor, The Rum Rebellion
Remember, you can get The Rum Rebellion delivered free to your inbox five days per week simply by clicking here.