Long-time readers of NOTES FROM UNDERGROUND are well aware that one of my key rules about global finances is MONEY IS FASCIST. In an interview with Rick Santelli today, I reiterated my views about how global capital needs to secure stability (hence the idea of money being fascist) as the world’s equity markets suffered from the “new ” uncertainty of geopolitical events over the weekend.
If you accept that FASCISM is the primacy of social and political stability over the rule of law, the idea is that as long as money has a safe harbor it will tolerate dictatorship or any other type of authoritarian government. The idea that the Chinese Politburo CAN and WILL secure the Chinese growth story regardless of the possibility of social unrest is paramount for the MONEY IS FASCIST. Provide a stable relative high return and money will find its way to your shores. Instability raises fear in foreign and domestic investors. The safety of the rule of law seems to matter in times of FEAR. Otherwise, show me my 10 percent. Enjoy the Santelli interview as it sets the agenda of an über volatile year.