I read a wonderful newsletter every month called the Gloom, Boom and Doom Report, written by Marc Faber. (Gloom, Boom and Doom report I highly recommend it.
Marc Faber if you don’t know is a great investor, market commentator and newsletter writer. Some of his highlights include calling the 1987 crash, the recent housing bubble and the great debt bubble we have been building. His newsletters are not all about financial markets but include a lot about history and geopolitics. He occasionally has some thought provoking, controversial comments. His latest comments in the April 6th issue stunned me.
He mentioned how there is growing outrage at how taxpayers are bailing out the financial elite. Here are the comments that stopped me cold:
“In every society, outrage by the people has been very dangerous. But throughout history, before it turned in earnest against the government, the political elite always managed to turn it against minorities, whether it be Jews throughout Western Europe (conveniently assisted by the Church), Armenians in Central Asia, Kurds in the Middle East, Indians in Africa, and Chinese in Southeast Asia. And since I have far more Jewish friends around the world than friends of any other ethnic background, I am deeply concerned about the growing outrage of the American people – particularly if the US economy doesn’t improve, which I believe it won’t in the long term. For sure, if I were of Jewish origin and living in the US I would be insuring against the eventuality that that outrage will be turned against a minority group. I would buy property in Asia and keep some assets in Asia (but not through an American bank), where Jews are such a tiny minority and such an economically insignificant economic force that they don’t attract any attention. In fact, if I were Jewish, I would leave the US without delay! The “outrage” writing is on the wall and I wouldn’t trust Mr. Obama for a second.”
Now normally he isn’t prone to hyperbole. And he is strong student of history. And history is on his side in the argument. It seems to have started with the biblical story of Joseph being Pharaoh’s adviser to years later Jews being enslaved by a Pharaoh, who “knew not of Joseph.” The Jews had a prominent place in Ottaman empire only to be turned on savagely by fanatical Islamic sects.
The best example though is Germany’s Jews. Before WW1 crushed Germany and after a series of terrible economic policies destroyed Germany’s economy, Jews had never had it as good in any country. They were scientists, musicians, doctors and financiers. A short 15 years after the end of WW1, Hitler was in power and a reign of terror started. One of the reasons that so many Jews were slaughtered in the Holocaust is that they thought that it was impossible that this would happen in their beloved country of Germany.
And here we are with wars that are draining our economy and economic policies that some would argue are very similar to the Weimar Republic’s (pre-Hitler Germany) policies of printing money. Now while this time it may not be the Jews, history shows that when “things get bad, the majority turns against the minority,” Marc Faber says.
Let’s hope the US is somehow different and that history does not repeat itself.