A well-known aphorism asserts that, “There is so much good in the worst of us, and so much bad in the best of us, that it ill behooves any of us to find fault with the rest of us.”
It’s a winsome little saying, and it contains an important nugget of truth, but it’s not the whole picture. If it were, no one could correct anyone else.
Of course, many people today would describe the perfect society as exactly that. Correction, they assert, is disrespectful and unloving. We should affirm people no matter what.
It’s amazing that such an obviously flawed concept has ever gotten off the ground. Should Adolf Hitler have been affirmed? Josef Stalin? The captain of the Titanic? The architect of 9/11?
This loose thinking has even infected science, where things can now be asserted as true rather than proved as true. Any objection to this is regarded as subversive.
True science consists of developing plausible theories and then trying to prove them wrong. Only when every rational, practicable attempt to do so has failed can a theory become the working one. It might then be regarded as truth, but lightly—until one more effort to disprove it succeeds.
The reason this method is so important goes back to the aphorism quoted at the top of this post. We are not perfect, and we don’t judge or act perfectly. Yet we need to separate the good and the true from the bad and the false, and we desperately need to live by what is good and true.
The unfortunate fact is that we are a mixed bag. We are a jumble of truth and error. We are a blend of good habits and bad. We are a stew of knowledge and ignorance. We are a conglomeration of love and hate. On our best day, our faults mar our successes.
The only way we will advance our own cause and that of the people we influence is by rigorously opposing the bad side of that mix and just as rigorously developing and supporting the good side. But that will never happen if a populace believes that man is fundamentally good. Basically good people need only to be left alone and they will naturally act virtuously and achieve much.
If that view of human nature were accurate, America today would be in the best shape it’s ever been. Few would argue that that’s where we are. If, however, man has an inherent nobility but is fallen, then he has great inherent worth, but also a nature that needs to be disciplined and directed—from the lowliest citizen to the President himself.
That’s clearly not the path we have chosen. Instead, the restraints have been removed, and America today is in la-la land. It believes borrowed money is free money. It believes redistribution is virtuous. It believes propaganda is truth. It believes cars and cows melt polar ice caps. It believes socialism works. It believes boys can be girls and girls can be boys. And “believes” means believes. For true believers, these things are sacred verity.
Another aphorism—this one with far more truth to it—asserts that, “you can’t use logic to get a person out of a belief they didn’t use logic to get into.” Propaganda makes a person truth-proof. No amount of reason or evidence can break through. A belief established in a propagandized person is unshakable.
This is why nations that go this way (toward falsehood as truth) typically don’t recover. The German nation of 1933-1945 didn’t ever see the truth regarding the Aryan race and its claimed right to lebensraum (living space). It just lost and was destroyed. Ditto for the Soviet Union and Communism.
But there were people in Germany and the USSR who never bought the lie. They kept their heads low, their eyes open, their powder dry, and their gold hidden (but accessible). When the great edifice of artifice fell, many of them were consequently outside the blast zone and were left standing. The “German miracle” occurred after the war because there were enough of such folks to A) put the country on a more fact-based track, and B) rebuild with remaining assets (along with those contributed by the US).
America may have more sound-thinking people in it than did either 1933 Germany or 1917 Russia, so we can hope for a less violent correction. Nonetheless, when bulleted lists of proofs can’t prevail, jacketed bullets often end the debate. And the aftermath impacts all citizens of an affected nation. That truth should prompt us to charitably engage our propagandized friends as warmly and efficaciously as possible, even as we oppose and separate ourselves from their destructive beliefs and actions. The publications below can add greatly to your ability to do both.
Key Takeaways:
- Cross-disciplinary consensus—gold looks good
- Economic earthquake in Japan shakes the world
- The bad news is the good news isn’t
- Confusing effect with cause results in the wrong solution
The McAlvany Weekly Commentary: Goodhart, Weldon, & Christian All Gold Bulls
As Kevin notes this week, “We are made up of the books we read and the people we surround ourselves with.” He and David review some of the history of the Commentary, explaining that David had a period of intense training for endurance races that has now come to an end—leaving him to resume his extensive reading regimen (David does nothing by half measures). The consequence lately has been a flurry of high-level guests who are analysts and authors whose work David has read. The hosts specifically focus on the last three guests of the program, Charles Goodhart, Gregory Weldon, and Jeffrey Christian. The three are very different in their areas of expertise, but all three are high-achieving thinkers and doers. Goodhart is a long-term analyst, Weldon is a short-term trader, and Christian is an in-depth researcher for a major investment firm. The hosts highlight the three guests’ approaches to markets, and give them their considerable due. The three cover some very diverse territory in the course of their labors, and come to the same conclusion regarding the coin of kings—it’s not finished with providing value to its holders, and its exchange value vis-à-vis fiat currencies is on the rise.
Credit Bubble Bulletin: The Critical Leap
Doug notes a crucial development in world markets this week, “Global de-risking/deleveraging made The Critical Leap from the ‘periphery’ to the ‘core’—perhaps decisively.” Newfound strength in Japan’s currency continues to cause a massive unwind in the yen carry trade, which is deeply affecting markets globally. From there, Doug covers events post-FOMC meeting. In the immediate aftermath, stocks rallied far and fast, but then gave back what they had earned the next day. Some disappointing employment reports on Friday caused further turmoil: “Markets quickly began to dislocate. Ten-year Treasury ended the session 19 bps lower at 3.79%—with yields down a stunning 40 bps for the week. Two-year Treasury yields dropped 27 Friday and 50 bps for the week—the largest weekly yield collapse since the March 2023 banking crisis.” His media excerpts then describe some highly vocal calls for serious rate cuts by the Fed, to which Doug replies, “While some data suggest an unfolding slowdown, the notion of an economy currently falling off a cliff is not credible. But that doesn’t mean I dismiss the calls for aggressive rate cuts from BofA, Barclays, Goldman, and JPMorgan. They are, after all, in the catbird’s seat monitoring de-risking/deleveraging—a dynamic that this week turned serious.”
Hard Asset Insights: Piercing the Veil
Morgan begins his analysis this week with a description of allied leaders’ perceived need to present a rosy picture to their populaces in the midst of World War II. He likens Jay Powell’s current optimistic assessment of the economy to that situation. “Apparently, the Fed has safely and softly landed the economy. All that remains is some final fine-tuning to shove inflation that last mile down to target. We’ll be there in no time. Bravo to our great and powerful monetary maestros.” A careless reader might detect some facetiousness there. Be that as it may, Morgan then proceeds to describe the sobering jobs reports that came in during the week. It was not pretty. Even the revisions to previous months’ reports were to the downside, and current reports were shockingly disappointing. He then turned to describing the hard task ahead for the Fed, and noted that market prognosticators are now pricing in serious cuts in interest rates before year-end. Given that all of this is happening in the midst of a sovereign debt crisis, he again emphasized gold’s millennia-old role of stability in perilous times.
Golden Rule Radio: Summer of Precious Metals
Tory, Miles, and Rob start things off with a chart review of the metals and other markets. The metals are mostly up, and they follow this survey with a deeper look at gold. It not only closed July with its highest-ever monthly close, but that number was part of a trend of higher monthly closes that has been going on for some time now. In short, as the hosts have been saying for months, gold is in a bull market. Though down moves will occur, the pressure is upward. The hosts then turn to the silver market, noting that, though the gold:silver ratio is down only very slightly from last month, they remain bullish on silver. Discussing the economic and political situation, they note that the economy’s greatest problem is that the government won’t or can’t restrain spending. They then compare Rob’s concise definition of inflation—”it’s the increase in your base money supply”—with the popular definition provided by Investopedia, which defines it as an increase in prices. Price inflation follows monetary inflation, note the hosts, it does not define the term popularly bandied about as the problem we now face. Our main problem is not that prices are going up. It’s that we are creating too much money. The hosts then describe the concept of stagflation, a condition they believe we will enter at some point, noting the difference between a deflationary depression (such as the Great Depression) and an inflationary one.
