Racism: The Maximum of Hatred for a Minimum of Reason.

Monthly Market Commentary: July 1, 2015

The American Defamation League writes that, “Racism is the belief that a particular race is superior or inferior to another, that a person’s social and moral traits are predetermined by his or her inborn biological characteristics. Racial separatism is the belief, most of the time based on racism, that different races should remain segregated and apart from one another.”

As an example of early racism, the historian Edith Sanders cited the Babylonian Talmud, which divides mankind between the three sons of Noah. He stated that “the descendants of Ham” were cursed by being black, and that it depicted Ham as a sinful man and his progeny as degenerated. The controversial historian Bernard Lewis (he is an ardent Armenian genocide denier) quoted Aristotle who when discussing slavery opined that while Greeks were free by nature, “barbarians” (non-Greeks) were slaves by nature because it was in their nature to be more willing to submit to despotic governments. Aristotle also opined that the most natural slaves are those with strong bodies and slave souls (unfit for rule, unintelligent), which would imply a physical basis for discrimination.

One view holds that racism is best understood as 'prejudice plus power' because without the support of political or economic power, prejudice would not be able to manifest as a pervasive cultural, institutional, or social phenomenon.            

Furthermore, what sociologists tend to overlook when discussing racism are economic issues.

Having visited South Africa before Apartheid was lifted and experienced first-hand racial discrimination combined with viciousness and extreme cruelty I am naturally against any form of racism although, as my friend Laeeth Isharc points out in my report, this should not prevent us from being proud of our heritage.  

Since the end of December 2014, US equities have traded sideward with a few selected stocks moving up strongly while others were weak. A very mixed performance indeed. The S&P 500 is up by less than 1% for the year, the NASDAQ by 7%, but the Dow Utilities Average and the Dow Transportation Average are down by 11% and 10% respectively.

In general, I believe that the risks associated with over-extended asset prices (stocks in particular) far outweigh the potential upside potential for the next few months.  

For art aficionados I am enclosing Kenny Schachter’s latest essay “On Why Art Basel Left Him Mentally and Physically Damaged.”    

I wish my readers wonderful summer holidays full of sun and free of any violence. And remember the words of Alexis de Tocqueville who opined that, “Americans are so enamored of equality that they would rather be equal in slavery than unequal in freedom.”    

With kind regards
Yours sincerely  
Marc Faber 

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