Since people are suddenly so concerned about fake news, disinformation, and misinformation by major media outlets, I thought of addressing some issues we should be aware of. First, we should all realize that disinformation and propaganda have existed in every society from the earliest time of human history. People have been extremely receptive to falsehoods because of superstition, credulity, and naivety. Bertrand Russell observed that, “What a man believes upon grossly insufficient evidence is an index into his desires - desires of which he himself is often unconscious. If a man is offered a fact which goes against his instincts, he will scrutinize it closely, and unless the evidence is overwhelming, he will refuse to believe it. If, on the other hand, he is offered something which affords a reason for acting in accordance to his instincts, he will accept it even on the slightest evidence. The origin of myths is explained in this way.” Oscar Wilde wrote more than 100 years ago, that the problem of media disinformation related to the public having “the curiosity to know everything, except what is worth knowing.” The low level of people’s interest in studying and understanding “what is worth knowing” is exacerbated by the Woke culture whose followers claim that just about everything that does not rhyme with their indoctrinated beliefs is offensive and causes irreparable damage to their sensibilities. Furthermore, Dr. Samuel Johnson stated in The Rambler (1749), that, “In order that all men might be taught to speak truth, it is necessary that all likewise should learn to hear it.”
In the late 19th century, John Swinton observed that journalists were “the tools and vassals of rich men behind the scenes.” This is a fact, which I can assert to.
Are governments also the “tools and vassals of rich men behind the scenes?” In many cases this is probably true as well. But if both the media and governments are tools and vassals of rich and powerful people behind the scenes, they would obviously also work together for implementing their policies and objectives.
In terms of investments, I am arguing that after a 40-year decline in interest rates the probability of a turning point occurring is very high – especially since globally, interest rates on bonds had declined in 2020 to the lowest level in history. This is not to say that interest rates can’t once again decline somewhat as the economy weakens further (IMO, we are already in recession), and lead to an intermediate term rally in bonds.
Regarding stocks, the point I want to make is this: If I am right that a bear market in stocks has begun (and I could be wrong) investors shouldn’t even think that the May 17, 2022 low was a major low. The typical bear market gives back 5.5 years of previous gains. Moreover, in real terms (adjusted for inflation) there are instances where more than 20 years of gains were given back. But let us assume that we have entered a typical bear market, and that we would decline to the 2017 level. This would take us down on the S&P 500 to around 2,500.
Finally, when discussing disinformation let us remember the words of Maimonides. The in Cordoba (Spain) born medieval Sephardic Jewish philosopher Moses Maimonides (1138 – 1204), who became one of the most prolific and influential Torah scholars of the Middle Ages wrote already then that:
“Men like the opinions to which they have become accustomed from their youth; they defend them, and shun contrary views: and this is one of the things that prevents men from finding truth, for they cling to the opinions of habit.”
With kind regards
Yours sincerely
Marc Faber
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