Age Of Unrest
I was in Paris last week.
You’ve probably seen the news: strikes and riots have been happening across France for weeks, as folks take to the streets to protest President Macron raising the age at which you can start receiving French social security from 62 to 64.
The crazy thing is that this change applies to the “early retirement age”—when you can begin to get your government pension, but at a reduced amount. The full retirement age is 67.
The problem with the reduced early retirement pension in France—for the government coffers anyway—is that the percentage paid at early retirement is one of the highest in the OECD, at 74.4%.
Macron seems “not for turning”: he’s used an obscure provision of the constitution to push through the change without a vote in parliament (which he was going to lose).
Now in his second term as president, Macron can’t run for reelection and so can “afford” to anger all his voters…
He claims the change is about setting his indebted country on a more secure financial path…
Many French don’t see it that way.
He’s meddling with their sacred “social contract”… robbing them of retirement security… and acting like a dictator by ramming the legislation through…
The French, of course, have form when it comes to deposing leaders they perceive as “tyrants”—so it remains to be seen how this plays out…
However, I have to say, when I was in Paris—if I hadn’t been watching CNN, I would have been blissfully unaware of the protests…
They were nowhere near where I was staying, relaxing with family.
Like any large and diverse European country—even when events there make the American news—most of the country (certainly those places you find expats) is peaceful and idyllic, with folks just going about their business and getting on with life…
The Battles To Come
That’s not to say the political fight over the pension age in France isn’t significant… It is.
It mirrors the battles that are being had in other Western countries over what to do about social security systems that are heading toward bankruptcy—with increasingly aging populations…
The concept of retirement and receiving a government-supplied income was invented by “Iron Chancellor” Otto von Bismarck in 1880s Germany… when people typically lived just a few years after they stopped working.
Today, retirees might live another 30 years or more… Which is great—but presents a problem for how those pension payouts will be funded…
I always say: Don’t assume any government benefit, even Social Security, will always be there for you—because the U.S. government is heavily indebted and nobody knows what happens if our creditors (one of the largest of which is China) come knocking…
Just last month, Barron’s ran a headline declaring that Social Security payments could be at risk in the event of a U.S. debt default…
While that may seem unlikely, it’s best to be prepared.
Downward Slope
I’m going to take a leap of logic here—but I promise you, it’s not that much of a leap…
When you study history and look at the arc of great civilizations, like I have, the reality becomes clear that our civilization in the West (led by America) is in decline.
We have aging populations… We’re set in our ways (we don’t want to work)… We have massive, bloated social welfare systems… Our economies are hugely indebted…
Dynamism, fresh thinking, innovation—these things that drive civilization are often strangled by bureaucracy and overregulation…
I’ve said this before, but I personally don’t know if America will continue to be a superpower 100 years from now. I’d like to think it will be. I hope we will recover that spirit…
But right now, I’d say the odds are against it…
France, too, may be a country in long-term decline—another founding partner of “the West” (don’t forget they helped us get rid of George III)…
But at least in France you can live cheaply (outside Paris) and enjoy the finest wine and best food in the world…
Opportunity Doesn’t “Knock”—You Have To Find It
With talk of recession heating up, especially in light of the U.S. and European bank failures of recent weeks… Inflation still stubbornly high (three times the Fed’s target rate in the States, and even higher around the world)… And the prospect of World War III (over Ukraine, or China invading Taiwan) still in people’s minds…
The ride is not going to get less bumpy anytime soon.
But there are always havens around the globe, bright spots in a gloomy landscape, and strategies available to maximize your opportunity—even in the most trying times…
I’ve spent 25 years seeking them out—and what I’ve uncovered has helped me stay sane and kept my wealth secure…
I’m more committed now than ever to keeping up the search for the next top haven, the next killer strategy, the thing that could be that vital lifesaver when everything else turns sour…
Stick with me.
And…
Stay diversified,
Lief Simon
Editor, Offshore Living Letter