The financial system in this country, and in the world, is based on trust. When you write a check, the shopkeeper must trust that you have money in the bank. When a major corporation sends ten million dollars to another company in another country, it assumes that the money being sent exists. Of course, there are checks in the system to make sure that the funds are transferred correctly.
But some of the trust we have had is beginning to break down. For example, we assume that when we put money in the bank, it will be there when we need it. But the truckers in Canada (and some of their supporters) discovered that Justin Trudeau and his administration could freeze their accounts and even seize their financial assets.
I am starting to see commentators express their concern that you could lose your finances simply because a politician decided your views were unacceptable. We have seen that in third world dictatorships, but this happened in one of the most advanced democracies in the world.
More recently, we have seen how the US and EU seized assets in Russia. The governments seized gold and Russian central bank assets. Even if you are the head of a country, you could have another country freeze and seize your assets. Not only are other countries concerned about what could happen to them, but companies in these countries are also beginning to wonder what could happen to their assets.
How confident can you be in your property rights? Every person, every company, and every country must now consider what could happen to them in the future. Add to that rising inflation and currencies that are declining in value. It’s been years since we boasted that the dollar is as good as gold.
We used to trust in the government. We used to trust in the banking system. We used to trust in our currency. Not any longer. So much of that has disappeared in just the last few months.
This post originally appeared at https://pointofview.net/viewpoints/financial-trust-2/?utm_source=rss&utm_medium=rss&utm_campaign=financial-trust-2