The RIT Capital Partners fund recently published their 2016 year-end report, and the information it contains could be a game changer. Chairman Lord Jacob Rothschild summarizes the report at the end, and according to him, the financial world order is entering into an age of uncertainty.
While speaking of the current state of affairs, Rothschild explains that we are encountering an age of ‘daunting uncertainty and political turmoil.’ And that we are currently experiencing a time of ‘upheaval and uncertainty.’ Going further, he stresses that the ‘avoidance of risk is as high a priority as the pursuit of gain.’
Of course, his words are meant to comfort his investors, yet it appears that as he is summarizing the report he is also providing an ominous admission of defeat. According to the report, looming on the horizon is a time in which his investors should use caution. Furthermore, he places a particular interest in preserving assets and assessing the risks of RIT investments.
“We are all conscious of the risk of the European Union disintegrating following last year’s Brexit vote and in having to deal with the problem of migration.
“The character of the European trading block remains complex, unpredictable and in need of reform. In the UK, investors will be waiting for greater clarity about the outcome of Brexit negotiations and the risks of upheaval which will arise in leaving the EU.
“Short term, the UK economy has performed surprisingly well. We should bear in mind, however, that the World Bank and others have recently forecast a slowing of growth in the current year and beyond, while the current account deficit remains daunting.”
He moves on to warning against any movements that would shy away from globalization by saying,
“Since World War II, we have enjoyed some 70 years of patiently crafted international cooperation, which is now threatened. Against this deeply worrying geopolitical situation, one can point to a number of positive investment factors.
“For example in the US, the proposed tax reduction for companies and individuals, reforms of an over-regulated system and increases in fiscal and infrastructure expenditure. These, however, come at a time late in the business cycle, when the labor market is close to full employment, with wage increases up by some 4% over the last few months.
“Valuations are at the high end of their historical range, inflation is returning and in these circumstances, it is likely that interest rates in the US will rise meaningfully.”
And while this message may make little sense to many, it is important to remember that the Rothschild’s remain connected to almost every aspect of the banking industry. His familial ties run as deep as the Federal Reserve, and his interests are in maintaining control over the financial world order. It is because of this, that his message can be understood as an admission of what he feels as a threat of the loss of control. As this is bad news for him and his business buddies, it comes as an obvious step in the right direction for the rest of humanity.