In today’s Exponential Investor

  • I don’t mind tax
  • FUD
  • Success, preparation, opportunity

This may surprise you, but I don’t mind tax.

It’s true. I’m happy to pay tax.

On one condition

That it’s used efficiently and effectively for productive means to develop public services and help those who really need it.

Now with that condition, I can also say that in my entire life I always hated paying tax.

I’m happy to pay it, but have always hated paying it.

That’s because it’s never used efficiently and effectively. Public services have got worse over time. And most of the people who really need help continue to be ignored or underfunded.

That’s because governments are horrendous money managers. They are wasteful. They are inefficient. They collect our taxes now just to dig themselves out of fiscal disasters and incessant poor policy-making.

Then when things get bad as a by-product of their own bumbling and mistakes, they look to tax everyone more. At the rate they’re going, soon there just might not be anything left to tax.

Or as was predicted in a now removed WEF video, just a world where, “you own nothing, and you are happy.”

Well not if we’ve bloody-well got anything to do with it!

The good news is, there is a way to survive the concept of “own nothing and be happy” and the attack that idea would have on your wealth.

However, on that pathway to survival, there’s going to be a few bumps along the way. Last week we saw how those bumps can look, but also how you can use them to your advantage.

The bump I refer to was over in the US where President ‘I hate stocks’ Biden mooted a proposal to lift capital gains tax (CGT) up so the effective rate would come close to 50%.

Of course, there’s a little more meat on the bone to it than just a rise in CGT. It’s scaled and it’s designed to tax the already wealthy. It’s really a massive wealth tax that’s not going to hurt the average person.

The purpose is to ensure that the average person can never break up higher into the wealthy brackets. It just means a wealth divide that will at best remain constant, at worst become even wider.

But, regardless of the practicalities of this proposal, the markets threw a proverbial hissy fit at the end of the week. Not just the stock market by the way… all markets!

Death Spirals

After the news of this US-based tax hike flew out the door the crypto market started to also throw a hissy-fit. On Friday the crypto market was peeling off massive falls, 20%, 25%, 30% in a matter of hours.

Add to the mix, people started adding fuel to the fire circulating fake news that Janet Yellen was considering an 80% tax on crypto gains.

Oh dear… (big sigh)… simply not true at all.

Still, you set a bit of fear into a volatile market, already fearful, already uncertain, on the edge of sanity and you get..? You get death spirals.

You get falls, and then liquidations in leveraged positions, then further falls until (as we saw) big red numbers dominate the day.

Truth is, this is very US focused – but the ripples felt across all markets are real. Which means one thing, I don’t see this as something to be worried about at all.

Instead, the market – in particular the crypto market – right now is on a bit of a short-term fire sale. The news you’ll read about and hear in the mainstream will be about the “crash” in crypto. The “experts” calling its demise (again) will come out of the woodwork.

But they’ll be wrong.

Wise words from Zig Ziglar

Now is the time when you should know exactly what action to take and how to take it. Not sitting back, fearful of authoritarian government financial oppression.

That’s why I’ve been trying to help thousands of everyday investors like you understand everything happening now is predictable.

The way governments and central banks are behaving is easy to forecast. That’s because they’re just following the same playbook they’ve followed since 2008.

When they do that, you know they’re only going to create more systemic risk in the financial system. They’re only going to destabilise economies. They’re only going to devalue their money.

While they continue down this path, we’ve been given the greatest gift perhaps in history. The gift of an alternative financial system they can’t corrupt and destabilise.

Think about the power of that concept…

It’s massive. And that’s why I’m not worried about these political moves. I’m excited by the windows they open when uninformed people react creating opportunities for people who really know what’s going on.

What’s happening now, in the market, in crypto markets, is a window that’s opened. In my view it’s an opportunity due to a reaction that’s unnecessary and overblown.

If you’ve been waiting for a window like this to open, then you need to be ready to grab the opportunity.

A great quote from Zig Ziglar sums it all up perfectly, “success occurs when opportunity meets preparation.”

If you’re prepared, informed and opportunity arises, the ball is in your court to move on it.

So, what are you waiting for?


Sam Volkering
Editor, Exponential Investor