Jacob Rothschild is worried: the world order is threatened

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UNITED STATES (VOP TODAY NEWS) — Jacob Rothschild has sent his traditional message to the investors of the fund RIT Capital Partners which he is the founder. It presents the financial results of the fund but especially his ideas on the state of world political and economic affairs.

The RIT Capital Partners Fund is the “iceberg” of the private empire of this famous family in the world of finance, and is one of the few Rothschild structures whose financial results are known to the general public. It is also, in a way, the showcase of the economic efficiency of Jacob Rothschild: since 1998, this investment fund has posted a total return of 2,400%.

Any other financial structure would envy such a result, and because of the specific reputation of the family controlling the fund, Rothschild’s messages are listened to with interest around the world. Only the banker’s investors receive his letters, but sooner or later they are still in the press, then RIT Capital Partners simply publishes them on his own site.

June 30, 2018 Letter Reveals Skepticism by Fund Management Regarding the “Unprecedented Recovery” of the Global Economy After the Global Financial Crisis and Fears about the Fate of the World Order so favorable for the family’s business so far.

Jacob Rothschild, whose business partners include prominent figures like Warren Buffet and Henry Kissinger, has long pointed to the vulnerability of the global economy and is actively criticizing the actions of Western central banks that have remedied the consequences of the global financial crisis by running the billboard. In 2016, he wrote that central banks were organizing “the most serious monetary policy experiment” in the history of mankind, and pointed out that no one could predict the “unpremeditated consequences” of this experience.

To complete the picture, Rothschild told investors that because of high risk he felt it was necessary to focus on preserving capital and not worrying about the short-term return on investment in the fund. The analysis of Jacob Rothschild’s letters and RIT Capital Partners’ accounting over the last four years makes it possible to draw several interesting conclusions: in fact, the fund has predicted the outcome of the referendum on the exit of the UK from the EU in first selling his assets in pounds. In addition, in its 2016 letter, Rothschild announced to its investors that the US presidential election would be “particularly stressful”, while polls and virtually all experts promised a comfortable victory for Hillary Clinton.

Curiously, Donald Trump and Jacob Rothschild criticize the state of the western economy in almost the same terms, except that the British aristocrat is obviously not excited by the actions of the American president. It should also be pointed out that, ignoring the origin of the criticisms, the main complaint made by the head of RIT Capital Partners vis-à-vis Western financial markets coincides with the comma with that formulated by some Russian experts, accused of “bias against US prospects”.

The criticism is simple: a classic financial bubble is inflated on the US markets, and the price of US assets, from equities to bonds and currency, is raised. In particularly dangerous periods, for example in 2016, when, according to Rothschild, the world was in the most risky situation “since the Second World War”, his fund has even converted some of its assets into gold.

In 2016, Rothschild wrote to investors that he was concerned about “Russian aggression and expansion”. Today, he says he is worried about the risk facing the world order. This risk being that, unlike the old crises in which the great powers cooperated with each other in one way or another, this time their cooperation “seems much more difficult”.

This is a direct reference to the fact that the game that loses-wins and the shows for the public are over, and that a real conflict has begun between the global poles of force. No wonder Jacob Rothschild is worried. However, in the same letter, we see that he still bet on the victory of China, or at least on a draw beneficial to Beijing..

Looking at the actual list of assets in which RIT Capital Partners invests rather than relying on sounding statements alone, the picture of its tactics and strategy becomes even more interesting. It turns out that the Rothschild fund actually invests a lot of money in Asia: in its portfolio are investments in other funds specializing in Chinese, Japanese and Indian assets. Not to mention American companies: the fund mainly prefers to invest in those who work in information technology (for example, it has invested heavily in the popular Dropbox service and in the Alphabet-Google group), advanced biotechnologies, and than US railroads (in other words, it relies on infrastructure). It could have seemed that after 2016, when Rothschild was very disappointed and worried about Russia’s behavior on the international scene, Russian assets had ceased to be attractive for its investments, but that is not entirely true. Looking at “under the hood” of the BlackRock Emerging Markets Fund, where the money from RIT Capital Partners was also invested, includes stocks of Russian companies Sberbank and Novatec.

And if there is one thing missing from the geography of Jacob Rothschild’s investments, it is Ukraine – while his close relatives have been cooperating for a long time with the Ukrainian President. Clearly, the patriarch of the British financiers either does not believe in the investment prospects of the young Ukrainian democracy, either does not consider it useful to be interested.
It’s hard not to agree with Rothschild’s approach to investment: to focus on the digital economy through information technology, biotechnology and traditional energy (the RIT portfolio Capital Partners contains many indirect investments in oil companies) is a good choice of priorities to survive and even thrive in conditions of turbulence and global uncertainty. In this sense, Russia is a country of unique opportunities. On the one hand, it has the potential for breakthrough technologies, on the other hand it is actually an energy superpower. And it’s a good thing that Rothschild is so concerned about the fracture of the world order and the Russian expansion. The

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