This note was originally published at 8am on April 24, 2012. INVESTOR and RISK MANAGER SUBSCRIBERS have access to the EARLY LOOK (published by 8am every trading day) and PORTFOLIO IDEAS in real-time.
“No nation is fit to teach unless it is also willing to learn.”
That was just an outstanding leadership quote from President Theodore Roosevelt as he was working his way towards getting the “Gentlemen’s Agreement” in 1908 between San Franciscans and the Japanese.
While I was on my pseudo vacation last week, I thought about the context of this leadership lesson while I was reading “Pacific Crucible” by Ian Toll. Then I thought about it again, and again, and again.
If you don’t have empathy, you don’t have much. As the world becomes more politically polarized, we run the greatest risk of all – we stop learning. The only way to lead is to learn the other side’s perspective. If you don’t take the time to understand it, you’ll never be able to resolve it. Leadership includes not making the same mistakes, over, and over, and over again.
Back to the Global Macro Grind…
You don’t have to read much to understand that the divide between segregation and immigration is always bridged by education. Neither do you have to study economic history much to acknowledge the wide gap between Keynesian and Hayekian economics.
When I moved to this country, I learned quickly that people want to label other people in buckets. ‘Oh he’s a Democrat and she’s a Republican’ or ‘he’s a socialist and she’s a capitalist.’ But, somewhere along the way, I also learned that’s ridiculous. Maybe it’s because I was a 20 year-old bumpkin from 22 hours north of Toronto. Maybe it’s just because I don’t like being put in a bucket.
With the upcoming election in France you are starting to see the outcrop of political polarization that we’ll likely see in the US Presidential Election. The Germans are taking this opportunity to call the French Socialists, and the French are preparing to call the Germans something back. In the meantime, that’s not going to solve the European Debt Crisis, just fyi.
Neither are we going to solve the world’s debt problems with more debt. We aren’t going to solve anything by printing more and more moneys either.
I’m not saying that there shouldn’t be a time and place for printing money. I’m just saying that you shouldn’t have a policy to be perpetually printing money and debauching your country’s currency. History is already littered with politicians making that mistake.
If you want a European and American perspective on politicizing money consider the following:
- “Give me control of a nation’s money and I care not who makes its laws.” –Mayer Rothschild
- “I believe that banking institutions are more dangerous to our liberties than standing armies.” –Thomas Jefferson
When you read those quotes, you should feel something. If you are a central banker, you don’t like the Jefferson quote – but that’s not the point. Neither is feeling what it means to you – being empathetic to what the other side feels is leadership.
What I feel about this is no longer a minority voice. The Most Read story on Bloomberg this morning has the following title:
“Bundesbank’s Weidemann Says What No Politician Wants To Hear”
That’s a critical quote at a critical time because our politicians have put us all in a critical position. If the fiscally and monetarily conservative voice of the Bundesbank in Germany is Willing To Learn from the history of the Weimar Republic’s mistakes, I suggest you and I should too. Printing money and debauching Dollars doesn’t end well, so stop cheering it on.
Think about that, again and again. I beg you.
Rather than begging for bailouts from Ben Bernanke at tomorrow’s FOMC meeting, take a step back and try to learn what all of us who haven’t been blowing up your hard earned capital since late 2007 are saying.
We’re not crazy. We’re Willing To Learn from whomever can show us why the Germans are wrong this time. We’re Willing To Learn how this time really is different.
But fear-mongering about what could have been in 2008 is no longer teaching anyone anything. It’s 2012 and now we need to see some positive proof on price stability and employment that lasts more than a few quarters to believe that the Fed, ECB, and BOJ Policies To Inflate aren’t going to slow global growth. They just did, again.
My immediate-term support and resistance ranges for Gold, Oil (Brent), US Dollar Index, Japanese Yen (vs USD), EUR/USD, and the SP500 are now $1630-1652, $118.35-119.28, $79.04-79.49, $81.09-82.14, $1.30-1.32, and 1360-1377, respectively.
Best of luck out there today,
Keith R. McCullough
Chief Executive Officer