Tuesday, 18 April 2023 — Gold Coast

By Vern Gowdie Editor, The Daily Reckoning Australia

[9 min read]

Dear Reader,

The origin of Latin is thought to date back to 1000BC.

However, it wasn’t until 100BC that the Romans organised its language into what we know as Classical Latin.

Classical Latin was the language used by philosophers, poets, and scholars.

One of those scholars was Marcus Terentius Varro (116–27BC). 

Varro’s writings are credited with being the origin for the Latin saying:

‘Mundus vult decipi, ergo decipiatur’

The English translation is:

‘The world wants to be deceived, so let it be deceived’

While the world has changed beyond recognition over the past 2000 years, Varro’s observation proves that one thing hasn’t change…human nature.

Man wants to be tricked, deluded, and misled.

Throughout history, man has demonstrated an extraordinary capacity for belief in the totally unbelievable.

In the 1630s, the world wanted to be deceived into believing a single tulip bulb was worth more than a house.

In the 1920s, the world wanted to be deceived into believing a scheme promoted by Charles Ponzi would deliver a 50% return within 45 days.

In October 1929, Yale Professor Irving Fisher told the world that ‘shares have reached what looks like a permanently high plateau’.  

Adolf Hitler was a master in the art of deception.

He proudly boasted that:

‘If you tell a big enough lie and tell it frequently enough, it will be believed.’ 

And he followed that up with:

‘What luck for rulers that men do not think.’

Society (generally speaking) lacks the ability to apply independent thought, to question what we’re being told, and to challenge the accepted ‘wisdom’.

Climate crisis

When a Swedish schoolgirl took time off school to demonstrate for bold climate action, her protests at the lack of political action on the so-called ‘climate crisis’ became a social media sensation.

Those controlling the climate change agenda — the ones who tell big enough lies and tell them frequently enough for them to be believed — had a new public face for their deception.

The journalists fawned over young Greta.

Microphones were at the ready to capture every prophetic word she uttered.

Children the world over gathered to greet their heroine.

School kids went on strike over climate change.

Now that’s a real waste of energy.

They should get back to the books…especially the history books.

If the education system was fair dinkum, it should be teaching these young impressionable minds about the perils of group think.

When the climate crisis turns out to be nothing more than a storm in a teacup, has anyone considered how this mollycoddled generation will cope with being duped? 

Oh, how the world wants to be deceived.

Shares always go up

And when it comes to deception, there’s none better at it than Wall Street.

If you believe the hype, there is never a bad time to invest.

Shares always go up in the long term.

Keep telling those ‘porky pies’ often enough and it becomes folklore.

Everyone believes it…especially novice investors.

But very few stop to ask: What’s propelling those prices higher, and can it be sustained?

Fortunately, there are some in the investment business that are real thinkers and want to share their wisdom with the investing public.

Ray Dalio is one of those. He’s the founder of Bridgewater Associates (the world’s largest hedge fund firm).

In a research paper titled ‘Paradigm Shifts’, Ray Dalio states (emphasis added):

‘There are always big unsustainable forces that drive the paradigm. They go on long enough for people to believe that they will never end even though they obviously must end. A classic one of those is an unsustainable rate of debt growth that supports the buying of investment assets; it drives asset prices up, which leads people to believe that borrowing and buying those investment assets is a good thing to do.’

People want to be deceived into believing the trend will never end.

But it always ends.

The cycle always turns.

The trends, UP and DOWN, exhaust themselves.

Going from under to over and back to undervalued.

Where are we now in the cycle?

To quote from this month’s The Gowdie Advisory:

‘The following valuation table is the latest monthly update (published 31 March 2023) from NDR (Ned Davis Research).

‘Of the 16 valuation metrics, 10 are in Extremely Overvalued territory. And four of those metrics date back almost 100 years. That’s a whole lot of data (including the 1929 and 2000 market peaks) against which the current market is being benchmarked.

‘Rhetorical question…“Do you make money from a) buying HIGH and selling LOW or b) buying LOW and selling HIGH?”

‘Let’s go with b).’

And here’s why, even with the so-called ‘correction’, the valuation metrics are all flashing RED…when bubbles bust, they’re brutal affairs.

We are NOT even close to seeing any brutal downside action…yet.

Getting to the point of UNDERvalued means there’s a WHOLE lot more downside left in this market. We are nowhere near the point of downside exhaustion.

All the lesser bubbles — Tulip Mania, the Roaring Twenties Bubble, Dotcom, and US Housing — collapsed in spectacular fashion.

Don’t be deceived into believing the Greatest Asset Bubble ever blown in history can end any differently.

GDP growth

And another great deception is the one we’re told about GDP growth reflecting economic strength.

This is a lie that’s told every quarter and it’s swallowed ‘hook, line, and sinker’ every time by the media and public.

We Aussies pride ourselves on our world record breaking recession-free run.

Well done us.

But how have we achieved this dream economic run?

Australia’s last official recession finished in September 1991.

Our nation’s total outstanding debt at that time was $850 billion:

Today, according to the Australian Debt Clock, our total debt is estimated to be:

Since 1991, we’ve added more than $8,000 billion ($8 trillion) of debt to our personal, corporate, and public balance sheets.

What should be a national disgrace is marketed as a positive…our ‘strong’ economy.

This is deception on the grandest of scales, and it cannot continue.

Why?

Here’s my alteration (the underlined sections) to an extract from Ray Dalio’s ‘Paradigm Shifts’:

‘But it [borrowing on the never, never] can’t go on forever because the entities [households] borrowing and buying those assets and items of consumption, will run out of borrowing capacity while the debt service costs rise relative to their incomes by amounts that squeeze their cash flows.’

The injection of $8,000 billion over the past 30 years is what’s kept our GDP needle in the positive.

Our love affair with debt has been the driver behind our so-called ‘economic success’.

We cannot borrow indefinitely to bring forward so much future consumption.

Every singly debt crisis in history has ended the same way…with defaults, debt restructuring, and a whole lot of pain.

Don’t be deceived into thinking otherwise. Actions always have reactions.

What if we have a decade or more of persistently high inflation and higher interest rates?

Or the share market collapse is so severe; we enter into a period of deflation?

Being at either end of the ‘flation’ spectrum spells bad news for overindebted private and public sectors.

And when the cycle does turn, we’ll go through a period of excruciating withdrawal symptoms.

Jobs lost. Business bankruptcies. Properties foreclosed.

We’ve seen this before with those other, once touted, ‘miracle’ economies…Japan, Ireland, and Spain.

Prolonged credit booms always end badly.

Perhaps this is something the education system should be teaching our youth…rather than scaring them witless with this climate change nonsense.

The world may want to be deceived, but you don’t have to be.

As we edge closer to the coming paradigm shift, there’s never been a more crucial time to exercise independent thought.

Your family’s financial wellbeing depends on it.

Regards,

Vern Gowdie,
Editor, The Daily Reckoning Australia

By Bill Bonner Editor, The Daily Reckoning Australia

Dear Reader,

Today, we pause for comic relief.  

We are sitting in the waiting lounge for KLM in Buenos Aires. Across from us is a pair of love birds. In what is called an ‘autumn romance’, the couple seem to be in their 50s. He is bald. Paunchy. She, bleached blonde…with skin that has gotten wrinkly, perhaps from too much tanning. It is probably the second go-around for both of them.

Are they on their way to Europe for…a honeymoon? We don’t know, but they can’t keep their hands off each other. After exchanging tender kisses…longing glances…and caresses, finally, they both sat in a single chair, so they would be closer together. And now, oh my…she has put her leopard leotarded leg over his. They are cuddling.

This is going on in the Business Class lounge…and why not? It’s the oldest business on the planet. So, now we turn to what a strange business it is. Independent News reports: ‘University “professor” claims there is no BIOLOGICAL gender’:

We watched the short video. Sure enough, a person claiming to be a professor — an expert! — at West Virginia University denied a biological basis for sex. ‘It’s a social construct’, she(?) insisted.

Blind designers

If you close your eyes and hold your breath long enough, you can believe almost anything. No one doubts that there is a lot of social constructing going on…but there is something more, too. No human architect designed man and woman.

Caught in the web of clickbait that passes for news, we watched another short video. This one took place at Portland State University, where professors were trying to hold a discussion on the subject. What is the difference between men and women, they asked. But when a female professor dared to reveal that ‘men are generally taller than women’ the students staged a noisy walkout.  

Another professor appealed to reason, vainly trying to find common ground with the students:

‘This is a university, if we can’t talk about this here…where can we talk about it?’

No matter. The young folks didn’t walk to talk about it at all. They were appalled. Tallness doesn’t seem like a ‘social construct’. But why bring it up? They had no need to notice anything, because they had already found the True Religion. In their state of exalted piety, the ‘science was settled’. They knew that there was no intrinsic difference between men and women…and nothing that couldn’t be fixed with ‘hormones and surgery’. That’s the one unassailable tenet of the new faith. And heretics will be cancelled, deplatformed, defunded…and burned at the stake.  

Words of wisdom

‘You know, Don Bill’, began Elizabeth with the playful wisdom of the distaff side of the family, ‘[a niece] has announced that she is gay. She has a girlfriend she refers to as “they”. And she takes it very seriously. If you want to know how her girlfriend is doing, you’re supposed to say: “How is they?” Of course, you don’t want to say anything so ridiculous, so you don’t ask’.

‘What happened to her?’

‘I don’t know. She seemed perfectly normal until recently. But then she had a friend who announced that she was a lesbian. And then it just seemed to become the latest thing…all the girls wanted to be lesbian. I think she’s doing it to be cool.

‘In this case, lesbianism may really be a “social construct”…a kind of fashion statement, I guess. And it saves her the trouble of trying to get along with a man. I just hope she’ll be happy. But the thing is, if she doesn’t form a bond with a man when she is young…she may never be able to. Or it may be too late to have children. Time is not a social construct. Neither is having children.

‘Nothing wrong with choosing not to have children…a lot of women don’t have children and they’re perfectly happy. But it will be sad if she turns 45 and realizes she’s missed something important. She may feel like she’s been chasing a mirage…that she’s been the victim of a lot of faddish thinking.

‘She wouldn’t be the first. I remember, growing up in the ‘70s, we had plenty of opportunities to ruin our lives. We went to parties in New York where they handed out cocaine. We were expected to have casual sex in college. And then, educated women were encouraged to act like men; we were the Hillary Clinton Generation. We were supposed to put our careers first…become judges and scientists, not “stay home and bake cookies,” as Hillary put it.

‘This idea that men and women should do the same things is obvious nonsense. We get together because we are different, not because we are the same. I’ll remember the grandchildren’s birthdays, as you put it; you remember Boog Powell’s batting average from 1966. It’s not always easy; we’re always making compromises. But that’s the world we live in.

‘And maybe these young people really can create a better world, but I wouldn’t bet on it.’

Like the do on the Discovery Channel

Chasing mirages is what we all do. Wealth, power, status — the usual. Then, getting older, both desire and capacity fade. No more fast cars. No more conspicuous wealth. No more muscle shirts or bikinis. Instead, we give away our wealth and power, and end up dying in a nursing home in Florida, penniless, dressed in a pair of slippers, khaki pants, a plaid shirt and a grey cardigan. On the wall behind us is a photo of us with the family when we were still compos mentis.  

Something to look forward to!

In the meantime, we have mirages to chase. As we’ve described in these pages, most of our vanities — if not all of them — come from an innate drive to procreate. That’s not a social construct either. It’s why we exist. Almost everything we do — from writing books to breast augmentation — is meant to show what good mates we would be. That’s why we want to be ‘cool’. But what a strange world it is. Women used to check themselves into convents. Some groups — such as the Shakers — swore off sex altogether. Now, young women ‘come out as gay’. They do these things because they think they are ‘cool’. But what a way to procreate! 

When it comes to gender bending, Newsweek Magazine must be the coolest…or dumbest…of all. There have been two mass shootings lately. In one, a ‘trans’ person — a ‘they’ — shot up a school, killing six people. This was a real man-bites-dog story. ‘Trans’ people are a tiny segment of the population; so, this single incident marked them, statistically, as one of the most dangerous sub-groups in the country. In another incident, a ‘man’ shot up a bank. On the first incident, the press seemed reluctant to linger. It didn’t suit the favoured narrative. But as to the second, Newsweek went nuts. Here is the once-respectable pillar of the US media establishment: ‘Louisville Shooter Connor Sturgeon's Pronouns Spark Outrage’:

‘The suspect was identified as 23-year-old Connor Sturgeon, a former employee at the Old National Bank, where the shooting occurred, Louisville Metro Police Department officials said Monday. The shooting left at least four people dead and nine injured and comes just a few weeks after the school shooting in Nashville, Tennessee, that killed six, including three children.

‘Before his identification by police, social media users shared screenshots of a LinkedIn profile associated with Sturgeon that showed the use of the pronouns he/him, which has brought some criticism online.’

Selective outrage

The outrage that Newsweek reports comes from the fact the accused referred to himself in the generally accepted way. In English, a man is described as ‘he’ or ‘him’, depending on how it is used in a sentence. But using ‘he/him’ as personal pronouns should have tipped off the authorities (Newsweek implies)…that the man was a mass murderer:

‘Sebastian Gorka, a conservative commentator and ex-adviser to former President Donald Trump, wrote on Twitter that Sturgeon was “proudly displaying his ‘pronouns’ online” and called this a “#RedFlag.”

‘Gunther Eagleman wrote, “Pronouns kill... Louisville bank mass shooter Connor Sturgeon self identified as a He/Him.”’

What to make of it? We don’t know…but with so much BS in the popular press, all we can say is ‘good luck’ to the happy couple in the waiting lounge. It may not be the first time around the track for either of them. But maybe this time, they’ll reach the finish line.

Regards,

Bill Bonner,
For The Daily Reckoning Australia