UK Left Lunacy Is a Preview of Kamala’s Policies

The UK famously wanted to “soak the rich” for years. Now, thanks to a loony left government, they have their chance. September 24, 2024 [WEBSITE]( | [UNSUBSCRIBE]( UK Left Lunacy Is a Preview of Kamala’s Policies SEAN RING We don’t always follow the exact footsteps of our mother country, but we eerily mimic her moves on occasion. The last time was in 2016, after the Brexit vote. Though, as a British citizen, I voted “out” myself, I didn’t think we would win. But I had hope once Sunderland’s overwhelming “out” vote flashed across my screen. Then, the rest of the North voted out. Then, Wales. Finally, we had won. From that moment on, I knew - yes, I knew - Donald Trump would win the election. No red-blooded American would dare allow the skinny, aquiline-faced Brit to out-rebel him. And so it was. Brexit and Trump had won their days. The problem with revolutionaries is that they’re utterly crap at administration, the actual job of government. We see that from the left every time they somehow get into office. Unfortunately, the right-wing Brexiteers and Trumpians were also appalling on the governing front. The UK’s Tories, who had fought for decades to break “The Northern Wall” of Labour voters, finally did in 2019. And what was the reward for these humble, blue collar workers? Higher taxes and green policies that would turn you red with fury. As for Trump, we all know the story. His great foreign and tax policies were undermined by the treasonous losers Trump allowed to stay in the administration. He neither built the wall nor drained the swamp, and it cost him the 2020 election. The Yanks elected the dementia patient, Joke Biden, as their leader. It’s not been the best of times, has it? And America may yet elect Cacklin’ Kamala Harris, a person so bereft of ideas her people keep her off the interview circuit as much as they can get away with. Her running mate, Tim Walz, declared, [“We can’t afford four more years of this.”]( Somehow, the Biden years didn’t include his Vice President. But if you think America is in a precarious position, you should see the UK, whose voters have already made their bed. Now, they’re not so much lying in it as dying in it. Who’s Leading the UK? A rather loathsome man named Keir Starmer is the Prime Minister of the United Kingdom of Great Britain and Northern Ireland. He has all the charisma of a stray hair on a toilet seat. England, in her desperation, didn’t think her vote through. England was so intent on axing the Tories she sliced right through her foot. If you ever heard of the Rotherham grooming cases, the Head of the Crown Prosecution Service at that time was one Keir Starmer. Like any candidate running for the top spot in a democracy, he promised voters the world. Once he got into office, he told them he needed to raise taxes. From [Bloomberg]( Starmer won this summer’s election with promises to redistribute wealth and repair public services, following 14 years of Conservative rule. Chancellor Rachel Reeves has argued that a £22 billion black hole in the budget needs to be filled, while the Labour faithful at this week’s party conference are more likely to talk about taxing the rich as a revenue-raiser than the trigger for an exodus. While the impact and likelihood of such departures are up for debate, the hazard lights are flashing. H.L. Mencken comes to mind: "Democracy is the theory that the common people know what they want, and deserve to get it good and hard." [The "X" Chip]( This AI microchip is so powerful…. It’s powering NVIDIA’s success… And the future of AI itself… Which will send the current Wealth Window into OVERDRIVE… Positioning one stock for a 10,000% run in the coming years. [Click Here To Learn More]( What Are His Policies? Starmer’s policies are as idiotic as any economically-illiterate politician. According to Bloomberg, the UK’s most contentious plans include a 40% inheritance tax on offshore wealth and having carried interest (private equity’s “performance fee”) taxed at a rate as high as 45% rather than the current 28%. Let’s just tear apart those two. Why Are They So Dangerous? I’ve already called the inheritance tax (IHT) [“the most immoral of taxes.”]( Let me list the ways: - Property rights: Individuals can dispose of their property as they wish, including passing it on to their chosen heirs. Imposing a tax on inherited wealth is a flagrant violation of property rights, as it limits individuals' freedom to distribute their assets according to their wishes. - Double taxation: IHT is double taxation because the assets being transferred have already been subject to income tax or other forms of taxation during the deceased person's lifetime. Taxing those assets again when passed on to heirs is ridiculously unjust. - Generational fairness: IHT unfairly targets the wealth accumulated by one generation and transfers it to the government. That disrupts the intergenerational transfer of wealth and undermines the ability to provide for future generations. - Wealth preservation: IHT discourages wealth accumulation and capital investment. If individuals know that a significant portion of their wealth will be subject to taxation upon death, they’re less motivated to build and preserve wealth, stunting economic growth and investment. - Complexity and avoidance: IHT is complex, leading to loopholes and opportunities for wealthy individuals to use tax planning strategies to reduce or avoid the tax altogether. Indeed, this creates an unfair advantage for the rich. They can afford sophisticated legal and financial advice to minimize their tax liabilities. Each of these is a good reason to tear up IHT. But IHT on offshore wealth is a disgusting extraterritorial overreach reminiscent of the U.S.’s citizenship-based taxation. Let’s move on to the insane rates on “carried interest.” Here are three arguments why some might consider high taxes on carried interest to be immoral: Carried interest is the reward for taking significant financial risks in private equity, venture capital, and other investment fields. High taxes on carried interest punishes those who drive economic innovation, job creation, and business growth. Taxing carried interest at high rates disincentivizes entrepreneurship and investment, which are vital for economic progress. Investors who earn carried interest put their capital into the business or fund they manage, meaning they are already paying taxes on any profits at the corporate or capital gains level. Taxing carried interest at a high rate is double taxation, making it unfair to those whose financial gains result from both their labor and their capital investment. Carried interest reflects not just labor but the combination of intellectual capital, managerial skill, and financial risk. High taxes on carried interest undervalue the "sweat equity" in generating returns, where fund managers receive their portion of profits only after other investors are paid. Taxing it at higher rates dismisses the manager's role in value creation. There’s a case for limiting a central bank’s power to fund such ventures cheaply, but that’s another conversation entirely. The bottom line is that carried interest isn’t income and shouldn’t be taxed at the same rate. Quite frankly, taxation is theft anyway. Brain Drain Becomes Wealth Drain Moreover, the new UK government plans to impose an extra 20% value-added sales tax on wealthy families with children at elite schools, on top of education costs that can already reach more than £55,000 a year. Insane. So, they’re leaving. [According to Henley and Partners]( the UK is set to lose 9,500 millionaires this year. Their financial clout means that even a small number of the ultra-rich leaving rather than paying more tax can potentially upset the government’s revenue projections on their new policies. Think of England as New Jersey. Once a prominent hedge fund manager leaves, the budget is in disarray. Wrap Up You may read this thinking, “That’ll never happen here.” But it’s worth remembering that Rome’s population went from 1,000,000 to 50,000 after the empire fell. I’m not saying that will happen this time. History may not repeat, but it rhymes. Rich people have the means to move and will do so to protect their assets. If America follows England down Kamala’s “soak the rich” rabbit hole, it may not like the result. Far, far more people will move to places like the UAE and Monaco, where capital and privacy are valued. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Electricity, Investments, and Your Quality of Life BYRON KING Dear Reader, When I travel by air, I usually choose a window seat. It’s a personal preference; I want to board the plane, stow my gear, scooch into my spot, lift the shade, and look outside. Often, on the ground, I watch the baggage handlers. They have a tough job out in the elements, humping everything that people pack on a flight. And every now and again, I see a cringeworthy move by which someone’s goods get monkey-slammed onto the concrete. Then, as we roll down the runway, I watch the placards that indicate how many feet are left until the end of the line. You’ve probably seen them: 8,000 feet, then 7,000, then 6,000, then 5,000, etc. As far as I’m concerned, the sooner we hit the proper speed, rotate, and lift off, the better. I’m always happy to go fast, get airborne, and fly over perfectly good runway. As we climb out or descend to land, I love to see what’s there. For example, Chicago: Chicago from the window seat. BWK photo. And how about this long stretch of built-up beach north of Miami: Miami Beach, looking north. BWK photo. Then there’s this, in the Colorado prairie east of Denver: Vast expanse of solar panels. BWK photo. Interesting, right? This Denver photo shows solar panels that occupy a lot of land. The whole buildout represents significant investment in real estate, engineering, permitting, equipment, hookups to the grid, all manner of jobs, tax breaks and much more. This particular array is in high, dry Colorado. There’s nothing out there but sagebrush and maybe some cows (oh, and oil). But it could just as well be rich, fertile, former farmland in Ohio or Indiana, now planted with solar. Or even valuable real estate, such as one might see beneath the approach to Newark. Or, as I saw during recent travels, old cotton patch land in South Carolina now transformed into fields of solar. To illustrate the point better, here’s a generalized map showing the density of solar arrays across the Lower 48 states. Heat map of solar energy spreads across U.S. Even at this large, kind of arm-waving scale, it’s clear that something big is going on across the country, energy-wise. And unless you pay attention to the biz, the scope of this national-scale solar buildout is probably much more than you might think, even if you look out of airplane windows. And hold that thought… Let’s Land at Dulles Following the airplane theme, not long ago, I flew through Dulles International, which serves Northern Virginia and Washington, D.C. Again, per habit, I was looking out the window. Among the forests, fields, farms, housing, and office park developments, I saw more than a few solar arrays across the landscape. But there was something else as well and a lot of it: Northern Virginia “hyperscale” data center. Datacenterdynamics.com. During the approach to land at Dulles, we flew over dozens of massive buildings that looked much like what you see above. One might think these are warehouses and cross-deck facilities for motor freight, but no, the 18-wheelers don’t roll up to unload and reload at the docks… because there are no docks. Instead, these massive structures are called data centers; the really big ones are called hyperscale data centers. Note (see above) the long, rectangular boxes outside. Those are cooling units, necessary because the innards are filled floor to ceiling with computers and power systems: Inside a Google data center. Courtesy Google. [[Revealed] Is A Starlink IPO Coming In 2024?]( Take a look at this tweet from Musk pictured here. Could this be a sign that a Starlink IPO is set for the second half of 2024? According to one top venture capitalist, the answer is YES! And for the first time ever, you have the rare chance to profit pre-IPO… BEFORE Starlink goes public. [Click here now for all of the details.]( [Click Here To Learn More]( What’s the Story? Okay, so what’s going on inside these large buildings? According to the [Virginia Mercury]( “Northern Virginia, the densely populated suburbs and exurbs located just outside the nation’s capital, is home to 70% of the world’s data centers, the huge warehouses that store computers’ processing equipment, internet network servers and data drives. With people increasingly using web-based programs on an average of 22 internet-connected devices in homes, data centers are seen to be needed more than ever.” In Virginia, the list of companies (there are many!) that run data centers (again, many!) is nothing short of mind-boggling. If you read this graphic carefully, you’ll see more than a few familiar names and others nearly unknown to mere mortals: Just some of the data center names. Courtesy Virginia Economic Partnership. This long list is just a start to the discussion because many companies run numerous data centers. Some, like Amazon and Google, run dozens of facilities, which is why you can go shopping so easily, or “just Google it,” as the saying goes. It’s all that computing power at work. The overall scope of investment is something that moves the economy. This data center buildout began about a decade ago, and what we see now has created its own world-class economic scale; plus, be assured that many companies are still building. For example, in Northern Virginia, land purchases have totaled multi-billions of dollars. Construction has run into the tens of billions. And the computers and servers inside those big buildings require a $100 billion capital investment. Meanwhile, the server designs and chip capabilities required to process all that data have evolved towards increasingly sophisticated levels. That’s why, for example, a company like Nvidia, which leads the pack in terms of certain critical core technologies, has been such a momentum play, bid up into the $3 trillion range of market cap during this past year. And take another look at those truck-sized air conditioning units outside the centers. What’s their story? Well, a lot of power is required to run the chips and servers, and thus there’s associated heat; it’s thermodynamics at work. Channel big flows of electricity through wires and chips, and the laws of physics dictate electrical resistance, which converts to heat. On the other side of the energy equation, those data centers require air conditioning and water to cool everything down. And this also requires large amounts of energy, in particular to run fans and pump immense amounts of water or other cooling agents through all the pipes and ducts. In fact, these data centers use electric power at every stage. Begin with servers and cooling, of course. But also, there’s power consumption for networking equipment and data storage, plus backup and security systems, and don’t forget basic lighting for workers who wander through the rows of equipment, with screwdrivers and pliers in hand. How much electric power are we talking about? Let’s use familiar ideas and explain by analogy: a server about the size of a briefcase can use as much electricity in one year as a typical house. So take many thousands of servers, and all the rest of the gear inside just one of those big buildings, and you’re looking at an electrical load equivalent to that of a medium-sized town (plus water, too). Now, take dozens of data centers and hyperdata centers and hook them up. It’s the power load of a large city, and these places operate 24/7/365, pulling electricity from the lines. And what does this mean to the U.S. electric power complex? Well, since you asked… It’s Still Your Grandfather’s Grid Generally, and it depends on where you live, the backbone of your regional and local power grid might date back to the 1930s, 40s, and 50s. Yes, it’s that old; in many cases, it’s from your grandparents’ era. On top of the legacy issue for much of the U.S. power complex, over the past half-century, much of the U.S. electric buildout has been piecemeal and patchwork. Indeed, it’s not wrong to say that, despite all the pontifications and regulations of federal and state politicians and bureaucrats, there’s no real national plan for what the overall power grid ought to look like. It just is what it is. Still, the lights work, right? You flip a switch and things happen. Yes, because all across the U.S., over 3,000 separate, distinct electric utility companies generate electricity. Some use coal for power, which is more and more frowned upon due to carbon dioxide emissions. Then there’s nuclear power, which has stagnated in the U.S. for many decades due to political opposition. Hydro, too, although all the good dam sites were long ago built out, and many dams are being demolished due to age, if not for environmental restoration of river systems. Recently, more and more power plants have been built to burn natural gas; in fact, this segment has grown strongly in the past 15 years or so due to abundant gas from fracking, low cost of fuel, and speed to build. But again, more than a few policymakers oppose natural gas because of the carbon dioxide fixation. Back to Solar And so we return to those now-ubiquitous renewable energy projects across the country, visible from the window seat of an airliner: fields of solar. And I didn’t even mention windmills; that's another story. Obviously, solar doesn’t work at night or in bad weather, and there’s much to say along these lines. One key point is that “renewable” systems (and they are not really renewable) always require backup. That is, due to what’s called intermittency (i.e., day-night; sunny-cloudy), solar requires a backup method to assure grid quality. This moves us to companion systems like battery storage, if not a gas-fired power plant down the road, sitting at the ready for when the call comes to warm the lines. When you put it all together — meaning the truth, the whole truth, and nothing but the truth — the point is that sunshine may be free, but the technology systems necessary to harness, store, and use it are quite expensive. One big takeaway from all of this is that the U.S. is on the cusp of massive new growth in electricity demand, certainly from data centers. Then add in, for example, the fast-growing numbers of EVs on the road that must somehow be charged, plus consider the overall population increase and baseline economic growth. We’re going to need more electricity. Another angle on this is that, on even the best days, the U.S. electricity complex requires constant care and maintenance because things are always breaking. Then come challenges from rebuilds that are necessary on many fronts, coupled with the new-build energy add-ons now being planned or built and yet to be accomplished. Is This Investable? Of Course! We could discuss energy systems and data centers all day, but by now you get the point. There’s much room to invest in the growing build of the U.S. electric grid. And here are a few ideas, but note that, unless noted, they are not official recommendations. If you buy in, use limit orders, watch the charts, buy on down days, and never chase momentum. First, natural gas: As we discussed, coal, nuclear, and hydro face tough challenges for various policy reasons. Yes, they have a future. But it’s in the out-years, which means that, closer in time, the fastest way to generate large amounts of ready-to-dispatch electric power, either as primary or backup to solar, is with gas turbines. Along these lines, look for solid plays in the U.S. gas patch. Consider EQT Corporation (EQT), America’s largest gas producer, with an extensive business base in the prolific Appalachian Basin. The company’s market cap is over $19 billion, and shares trade in the $33 range. And the company pays a dividend of about 1.9%. EQT has great growth prospects ahead, to be sure. Second, look at copper: In previous articles, I’ve mentioned one of the world’s great copper mining companies, Freeport McMoRan (FCX). Shares trade in the $43 range, giving the company a market cap of over $62 billion. And it pays a dividend of about 1.8%. In a rising market for the red metal, Freeport looks good in the years ahead. Another company in the copper space is Rio Tinto (RIO), with shares trading now at about $62 and a market cap of over $100 billion. Rio pays a dividend of over 6.5% yield, reflecting how much cash it generates in this environment. Again, excellent prospects ahead. Finally, we must look at silver: Yes, silver because it’s essential to fabricating those above-described solar panels and many of the other electronic systems inside all those huge data centers I described above. Silver is very much an electric metal, for which demand is climbing fast while global output is constrained. There are many excellent names in the silver space, and I can scarcely begin to list them. However, one that has done quite well is First Majestic Silver (AG), with a market cap of about $1.8 billion. Shares trade at about $6.15, and the company pays a small dividend. As silver prices rise in a high-demand scenario with constrained production, First Majestic shares should do well. With this, I’ll wrap it up. Remember that, wherever you are in the world, your quality of life depends on the juice in the wires above, below, and truly all around. Without electricity, it may as well be 1824, not 2024. And investment prospects are strong for what makes it all possible. Thank you for subscribing and reading. Best wishes… All the best, Byron W. King Contributing Editor Rude Awakening ☰ ⊗ [UPDATE PREFERENCES]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here,]( or manage your newsletter preferences [here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. Rude Awakening is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your Rude Awakening subscription, you can ensure its arrival in your mailbox by [whitelisting Rude Awakening.](