Unless you’ve been hiding under a rock or meditating in a Buddhist Nepalese mountain retreat nourishing yourself with nothing but water, lettuce (which is just chewy water) and positive thoughts for the last few years, you’ll no doubt have been made aware, whether you like it or not, of the dire problems we all face.
What are these?
If we are to believe the MSM they are:
- Covid Pandemic
- Climate change
- Gender equality
- Stakeholder rights
- Racial equality
Setting aside the first topic, which is at this point now plainly evident to anyone that cares to do some simple math or look at actual mortality rates, a colossal hoax, we can safely categorise the balance into what the corporate world calls “ESG”.
Environmental, Social & Governance.
This idea, like so many ill thought manias of our present day, was first led by over-indebted social sciences majors who derive inner joy from controlling other people.
But it’s not these fanatics that you should worry about.
It is the folks in positions of power… the politicians, CEOs, management boards and trustees, who are too afraid to suggest that the king indeed is stark-bollock-naked.
Leaders these days are like the parents you see that cave to every fleeting whim of their child, terrified of disappointing their little angel (who is in mid-tantrum) and being seen to be a bad parent.
Instead of steering clear of social justice issues, or refraining from providing views on the impossibly complex system of our environment, and focussing instead on… I don’t know, maybe providing goods and services to the world… they go “all in” on any, and every virtue signalling opportunity they come across.
Not because they believe it, but because of what happens if they don’t.
The problem for most, who recognise the inherent cognitive dissonance, is that in even questioning it, they risk facing the wrath of their colleagues, partners, friends, and needing to explain to their husbands or wives why it is they lost their jobs… and so instead of speaking their minds, they mutter and nod their heads passively in agreement.
I get it, their incomes depend on it – at least in the short term.
A bigger problem is that – like any parent who allows their child to become a miniature tyrant – their position depends on more extreme concessions in the long run.
And a bigger problem still – i.e. where all this leads – is dooming themselves and the next generation to the sort of shortages and hardships that previously only existed for them on the History Channel doco’s about the former USSR.
By the time they finally realise this, the loss of their jobs will likely be the least of their worries, because shutting up and continuing down this path is put quite simply… communism.
For many of my fellow colleagues who manage money, this has become a now frequent exercise in appeasing the intolerant minority.
Like paying off the local mob boss for not burning down your shop.
The asymmetry in diverging from the ESG pack – the peer pressure and the ramifications of telling someone espousing this horse shit that it is indeed a load of horse shit – is too powerful a disincentive.
Most don’t care about ESG… trust me… but what are they to do when their institutional LPs come to them with a new “ESG mandate”, drafted up by Janice the red headed she-bitch in compliance, who landed her new role as “diversity officer” after bouncing onto the scene fresh out Berkley with a shiny new social science degree, a complete ticking time bomb in the company that everyone has to placate or get sued by?
(real example there, I’m not just stereotyping)
And so everyone goes along with it, no matter how far the facts diverge from the reality, no matter how compromised their integrity becomes.
Galbraith understood this.
My buddy “the macro tourist” Kevin Muir (worth a follow at https://twitter.com/kevinmuir) reckons we’re in for a monster bubble in this entire ESG shulbit, and I think he’s right.
And he’s sure as hell is no dummy.
Let’s break it down, and then we’ll see why this is setting up for a bull market where few see it, and a geopolitical shift that promises to change the world for the rest of our and our children’s lifetimes.
Heady stuff I know.
ESG is a measure of the environment and social impact of companies.
It began as a “movement” with a haphazard bunch of intolerant folk who, not content to only do with their money as they pleased, began forcing others to do as they say.
It has now reached the stage where in a mad bid to “out-woke” their counterparts, they’re now outlawing any investments into companies that don’t fit some loosely defined criteria.
This is largely by design – loose criteria that is.
It is much easier to simply take down, threaten, and destroy companies that are “bad” by some new vague criteria, than it is to have a clearly defined criteria where everyone knows the rules.
Don’t have a bigender two-spirit half Navajo eighth black blind pansexual woman in a wheelchair on your board? Damn… you’re racist, sexist, sightist and homophobic… a nazi by all accounts… and most definitely don’t meet the ESG requirements.
What on earth were you thinking?
But as absurd as this is, capital has been pouring into anything “woke”.
Now if I was in charge I’d call a meeting and, while brandishing an AK47, I’d explain with spittle flying that nobody is going to be allowed to tell others what they’re allowed to do with their money.
But I’m not in charge. Morons are.
The good news is that Communism is coming and the shortages are going to be following close behind.
But really Chris… Communism?
Remember, when capital is allocated based on its highest marginal return, individuals… you and I… will invest where there is legitimate value, where we believe our highest risk-adjusted returns will be.
On the other hand, when capital is allocated based on some other set of metrics, such as which company is the most “socially responsible”, this is simply a thinly and poorly masked form of communism.
“The key to understanding the appeal of communism, despite the grim reality on the ground, lay in the fact that it allowed so many followers to believe that they were participants in an historic process of transformation, contributing to something much bigger than themselves, or anything that had come before.”
― Frank Dikötter, The Tragedy of Liberation: A History of the Chinese Revolution 1945-1957
Yes, THAT communism.
You might remember it from Moa’s China, or Pol Pot’s Cambodia or the former USSR. It is phenomenally stupid and wholly destructive.
Always has been, always will be.
Plugging in cuddly buzzwords doesn’t make it any less so.
A key punching bag in the current ESG fraud is, of course, the fossil fuel industry.
Our beloved leaders have gotten it in their heads that it is their job to ensure that the brown spotted tree frog enjoys a happy life… that it’s our job to read it bedtime stories and tuck it into bed every night safe in the knowledge that no man will come along and dig up his home, and replace it with a nuclear power plant so that our teenagers can stream Netflix.
The thing is, energy has to come from somewhere, and we’re told that it can no longer come from fossil fuels?
This has led to a flood of capital into alt energy and an absolutely devastating divestment of capital (by westerners… pretty much only westerners) from the fossil fuel industry.
“JPMorgan, by saying what they said, will be able to borrow billions of dollars from the ECB at negative rates … it doesn’t have to work, they don’t need to do anything, they are now getting free money from Europe for basically being able to say this,”
As Chamath Palihapitiya recently pointed out when critiquing the ESG movement and the absurd hypocrisy taking place – specifically when JPMorgan announced them putting the kibosh on investing in any fossil fuel projects.
And the herd is stampeding. Take a look. This is, I promise you some of the most unproductive investments ever made. JPM and Goldman don’t care -they’ll sell you this bucket of sick all day long.
They make money no matter what.
I’ve written extensively about the problem with “green” energy (in “The greenwashing bubble”, for example) which has dutifully been banned on social media, as no doubt will this article.
What I didn’t mention however is how retail investors will find it increasingly difficult to invest in fossil fuels themselves. Assuming you’re prepared for the ridicule and treatment befitting a baby seal clubbing thug, you will find it increasingly difficult to do so.
Take a gander down to your local mutual fund shop and you’ll find that all these folks are too terrified to tell the mob to go get knotted… and so there isn’t any product for you.
Sorry it doesn’t fit in our “ESG” policy.
It is now to be found in every western country.
The European Union is to stop funding oil, gas and coal projects at the end of 2021, cutting €2bn (£1.7bn) of yearly investments.
The European Investment Bank (EIB), the EU’s financing department, will bar funding for most fossil fuel projects.https://www.bbc.com/news/business-50427873
Commerce Minister Kris Faafoi said banning investment in fossil fuel companies would help combat climate change and carbon emissions.
“It also makes sense for the funds themselves given that there is a risk of investing in stranded assets as the world moves to reduce emissions.”https://www.rnz.co.nz/news/business/410692/new-kiwisaver-rules-to-ban-investing-in-fossil-fuels-and-illegal-weapons
“At risk of investing in stranded assets”??
There’s another name for stranded assets you absolute dolt. It’s called “a fire sale”, and reminds me of Jim Rogers famous quote.
The greatest opportunity of our lifetimes sits in front of us, and the Marxist gatekeepers will increasingly be taking measures to ensure that you will NOT be allowed to be participating. Watch.
Fossil fuel investments into your IRA? How dare you… Sorry, not accessible.
Fossil fuel investments if you’re a UK citizen? Your government has determined that you are a horrible person and so no, and don’t expect to be able to access foreign exchanges in your brokerage account either.
Fossil fuel investments into your pension scheme?
Not on our watch big guy.
Trust us, it’s for your own good, and society’s.
So who will be able to access this phenomenal bull market?
Asians for one, who look at us round-eyes and think to themselves:
The Chinese have a name now coined for this. “Baizuo” is a Chinese term meaning “white left” and it refers to Western leftist ideologies primarily espoused by white people. The term baizuo is related to the term shèngmǔ, a sarcastic and derogatory reference to those whose political opinions are perceived as being guided by emotions or a hypocritical show of selflessness and empathy.
Zhang Chenchen, a PhD in political theory and science explains it.
Baizuo refers to people who “only care about topics such as immigration, minorities, LGBT and the environment,” who “have no sense of real problems in the real world,” who only advocate for peace and equality to “satisfy their own feelings of moral superiority” and who are “obsessed with political correctness” that they “tolerate backward Islamic values for the sake of multiculturalism,”
“”who advocate inclusiveness and anti-discrimination but cannot tolerate different opinions.”
I wrote a whole report about the effects of this movement here that you should definitely read if you haven’t already.
So we have a catastrophic dearth of investment going into the very nuts and bolts of what powers our world and while this is happening we have central banks accelerating money supply.
I can’t think of a more bullish setup.
Now, if you’re into things like gender equality, candles, bicycles and veganism etc. all the more power to you, but most people I know just want to hop in their car every now and then and take a driving holiday, and when they come home from work each night they want to flick on the power and not think to themselves, “by golly I don’t think we can use the radiator tonight honey” because the cost of power has tripled.
Though it’s evidently a tell tale sign of white supremacy to say that 2+2 equals 4, it really does, and it will continue to do so forever and ever.
By the time the western world wakes from the current self inflicted delusion, the geopolitical makeup of the world we live in will be firmly in the hands of those who are not participating in this ridiculous Marxist agenda, and who take advantage of what is easily the most spectacularly asymmetric setup I’ve ever seen.
By the time the decade is out, ESG will be seen as one more pivotal factor which accelerated the shift of wealth from the Western democracies to the East.
And at that point it’ll simply be a chapter in books written about how the West was lost and how China became the global power.
“Complete fraud,” “joke,” “jargon,” “so ridiculous,”Chamath Palihapitiya Venture capitalist, engineer and the founder and CEO of Social Capital