“The Hidden Dangers of Political Correctness”

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First, I shall discuss Political Correctness. In 1948, Norman M. Thomas, Leader of the US Socialist Party opined that “The American people will never knowingly adopt socialism, but under the name of ‘liberalism’, they will adopt every fragment of the socialist program until one day America will be a socialist nation without knowing it happened.”

Political Correctness (PC) is the outcome of a distinctive ‘turn’ in Leftist politics, which became obvious in the mid-1960s. PC is a subjective list put together by the few to rule the many – a list of things one must think, say, or do. It affronts the right of the individual to establish his or her own beliefs. In the 20th century, the contemporary use of the phrase “Politically Correctness” dates from the dogmatic application of Stalinist doctrine, debated between formal Communists and Socialists, during the middle of the 20th century. Peter Drucker noted that, until recently, only Nazis and Stalinists spoke of “political correctness.” It is indeed a purely totalitarian concept. It asserts the fight of those in power to suppress all but the party line’s official lies.

Then we shall turn our attention to asset markets. Around the world, bond yields have been rising. What this increase in yields means is that the tailwind from declining interest rates, which benefited equities in recent years, has disappeared. Rising bond yields combined with a serious deterioration in numerous technical indicators lead me to believe that stock market around the world have far more downside risk than what is being perceived by the currently ebullient crowd of investors.

Last week, I bought for the first time in a long time a gold stock. Gold and silver mining stocks have the potential to rebound by between 30% and 40%.

At the end of this report I suggest our friends to read the essay by Sydney M. Williams about Education and Political Correctness.

Since I discussed integrity before, I am enclosing a very interesting personal account about fraud at Bayou Management, LLC and about the “Importance of Being Diligent” by our subscriber Shinya Deguchi who works now for Star Magnolia Capital.

I hope my readers will be able to navigate profitably the far more volatile financial markets, which I expect in the second half of the year.

I remain with kind regards

Marc Faber

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