“It’s the End of the World as We Know It (And I Feel Fine)”
R.E.M., 1987

It has come to my attention dear readers that my most popular missives involve tales of travel and preferably unfortunate events befalling me. So, at great personal sacrifice and to get the inspirational juices flowing I have taken myself off to Switzerland. Well, Switzerland, Italy and France to be precise. That my departure from Australia’s fair shores has coincided with our new prime minister realizing he’s inherited one very poisonous chalice brings me no joy. I guess I can take heart from the miracle of internet news which allows me to monitor Anthony and friends as the terrible truth sets in. Yes indeed, the world has turned to crap and what better place to watch the end of times as we know them than on some magnificent lake in a far off land.

I Told You So

To be fair I have not travelled halfway ‘round the world to escape the political chaos at home. I’ve come here to access reliable power. No, just kidding, I’ve come to ride a push bike and hopefully catch a glimpse of the Tour De France. The managing director has failed to accompany me, suggesting that my departure will bring joy, relief and a significant drop in her stress levels. You see, this trip is a bit of a spur of the moment thing and I managed to have a near nervous breakdown trying to identify and mitigate every possible contingency. Checking, rechecking, double guessing………..you get the picture. Those who know me will understand. Hell, some of my clients even like that obsessive part of my personality.

Anyway, if you’ve never organised flights, hire cars, itineraries, bicycle shipping, insurance and accommodation for such an adventure it turns out there’s a bit that could go wrong. To my infinite relief, so far nothing has! Emirates were on time and great to travel with, the bike turned up with me in Geneva and to my surprise and delight fitted in the hire car. That was after the wonderful people at Europcar let me swap my booked vehicle for something a bit bigger, and at no cost. Legends!

First stop a small village in the Swiss alps. I won’t name it as there are a few Aussies living there and I don’t want to offend anyone. I’ve booked directly with the accommodation house and turn up mid-afternoon. Sorry, check in at 4pm. Oh, and checkout between 8am and 10am. Ok, where do I park? Well, you can drop your gear here and then head down to the carpark. Now, when one is any place with “alps” in its title, “head down” is never good. Turns out the car park is half a km from the hotel and it’s a 5% grade uphill walk in 32 degree heat back to the room. Get all the stuff out of the car and discover the room is down at the bottom of the other side of the joint with a 5% downhill walk on a very very ordinary path. I’m not sure if any of you have had a large suitcase and a bike box on wheels gather momentum in an alpine environment but it’s quite the thing to witness. At the bottom of the path is a chairlift operating summer sightseeing. It is indeed a miracle that said suitcase, bike box and finance broker managed to avoid landing on one the chairs and being whisked to the top of some god forsaken mountain.

I manage to steer my cargo to the door and step inside. This is a $400 AUD per night room. That’s what you gotta pay in this part of the world and I had been expecting something around 4 stars. Talk about basic! Nice view but basic. Seems like some Australian locations are not the only places trading off the view and letting upgrades and guest focus slip.

BTW, for your money you get to turn the fridge on when you get there, sleep on a foam bed with no top sheet, enjoy zero fans or air conditioning, take out all rubbish before departure and enjoy the buzz of insects as the place is sans screens. Just to top things off the valley road up to this little slice of heaven is a 10% grade and very challenging for an old bloke who had used the miracle of gravity to ride further than he should have!

I’m now in Isteltwald on the lake at Interlaken where my lodgings are greatly improved. In fact, the place is a Swiss version of strata titled management rights and it’s wonderful. In a bizarre twist that could only happen in these strange days a Korean Netflix reality show is based here. As such the place is full of Korean Instagram enthusiasts who queue up at a certain pier to have their photos taken. Most are very easy on the eye so no harm, no foul. However, today they were disrupted by a fat old Aussie guy diving off said pier, an event which seemed to bring shock and delight in equal measure.

Which leads me inevitably to the title of this month’s message. Plenty of shocks and not much delight unfortunately. I’ve been accused of being negative by some and conservative by many. I take the critique on the chin because it’s pretty accurate. We have suggested for some time that a perfect storm of uncosted environmental activism, minority side issue focus, lack of personal responsibility and fiscal illiteracy was brewing. We suggested that worthless “assets” such as Bitcoin were no more than speculative Ponzi schemes and that some asset classes were overvalued. We’ve even suggested that it is economic suicide to place too much power in the hands of foreign suppliers while abandoning manufacturing and raw material value adding. We’ve made it clear that low interest rates don’t last forever and we’ve counselled our clients about paying down debt.

All the storm needed was a bit of turbo charging. We got that thanks to the inevitable outcome of printing so much money during Covid, falling out with our Chinese friends and the also sadly inevitable Russian aggression in Ukraine. Now we’ve got scarcity driven inflation, the collapse of digital currency values, the possibility of power outages and a reserve bank that’s not quite in panic mode, but it’s close. The one positive I see in all of this is the so-called great reset. It had to happen, bubbles can’t keep growing, they have to blow up at some point. Hopefully the reset will include better economic management from governments, particularly when costing “feel good” projects.

I suspect once our new Labour government fully grasps the gravity of the situation, we may actually see responsible policy as the new agenda. It’s a hell of lot harder to be on the ground than to boo from the stands and so far it looks like the new team may be coming to that conclusion. No bad thing.

In closing, despite a world of fiscal and societal uncertainty I’m not fixing rates on any of my debt facilities and I’m pretty comfy with my management rights investments. My share portfolio is a train wreck, but they are good companies and will be valued as such in the future. Paper losses are just that, no need to crystallise them. Should things change my creditors can contact me in whatever foreign land I run to. The managing director has the details and if she says I’m dead demand to see the body. I think it’s called Doing a Skase. If you get that reference, you’ve lived through all this before.

Mike Phipps | Director | Mike Phipps Finance

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Mike Phipps