The New Zealand government has announced plans to ban foreign investors from acquiring homes in the country. While residents in Singapore and Australia, together with foreign investors granted residency in New Zealand, will be exempt from the ban, the reason behind the ban is fascinating. Property prices in New Zealand have increased by 30% over the last five years and homeownership amongst the New Zealand population is at a 66 year low. So, how is this connected with the Internet and a potential apocalypse?
Cryptocurrencies and the Internet
Slowly but surely governments around the world are losing control of monetary transactions which is in turn reducing their ability to increase tax income. The introduction of the Internet opened the worldwide market to businesses and individuals and the emergence of cryptocurrencies is fuelling the flow of money around the world – money which governments can’t control.
New regulations
It is interesting to see that governments around the world have introduced an array of regulations aimed at curbing growth in cryptocurrency transactions. However, the surge of demand for cryptocurrencies is growing and regulations are proving inadequate and behind the curve.
To quote a recent article surrounding the potential for an apocalypse and re-engineering of the social structure:-
1) The democratic nation-state basically operates like a criminal cartel, forcing honest citizens to surrender large portions of their wealth to pay for stuff like roads and hospitals and schools.
2) The rise of the internet, and the advent of cryptocurrencies, will make it impossible for governments to intervene in private transactions and to tax incomes, thereby liberating individuals from the political protection racket of democracy.
3) The state will consequently become obsolete as a political entity.
4) Out of this wreckage will emerge a new global dispensation, in which a “cognitive elite” will rise to power and influence, as a class of sovereign individuals “commanding vastly greater resources” who will no longer be subject to the power of nation-states and will redesign governments to suit their ends.
How will this impact business?
If we look at the business world today, companies are quite rightly using all legitimate means to hand in order to reduce their tax liabilities. We have seen the likes of Amazon switching sales and income between different countries and while this has attracted severe criticism from the general public and politicians, much of it is perfectly legitimate. In what is effectively a self-fulfilling prophecy, as competitors seek to reduce their tax liabilities, thereby leaving more funds to invest, this creates a new playing field for industry. Unless all businesses follow this directive they will be left behind by their competitors, deemed less efficient and less attractive to investors.
The emergence of cryptocurrencies, greater online business activity and customers/businesses looking to evade recent tariff rises will cause greater friction between businesses/customers and governments around the world.
Survival of the fittest
In essence the stock market revolves around survival of the fittest with those showing weak points targeted and eventually removed from the playing field. The investment market is a brutal environment where the merest of weaknesses can open the floodgates to short sellers. As we touched on above, business leaders are investing significant amounts of their personal wealth into New Zealand homes as a hedge against a possible “apocalypse”.
Conclusion
To be fair, while the chances of an apocalypse may have increased significantly since the introduction of Donald Trump, the Internet and cryptocurrencies, the chances of this occurring in our lifetime are minimal to zero. However, we may well be at the start of the re-engineering of society, the creation of different types of governments around the world and a more brutal business environment.
If we look towards Europe, many members of the European Union are losing their identity, instead falling under the umbrella of the European Union which is challenging the US. Whether the UK will live to regret the Brexit vote remains to be seen but those not part of these ever expanding political groups, such as the USA and the European Union, will come under ever greater pressure in the future.