There’s no God higher than truth

Mohandas Gandhi

When Russia invaded Ukraine in February this year, the west enacted a set of extreme sanctions and the ruble began to collapse. Many in the west were delighted to gloat about Putin’s “miscalculation.”

The collapse of Russia’s currency was proof that the west inflicted a crushing blow on Russia. Stability of the currency is central to any economy, especially if it is the only currency in circulation (i.e. there’s no viable alternative). As John Maynard Keynes wrote, “there is no more positive, or subtler, no surer means of overturning the existing basis of society than to debauch the currency… The process engages all of the hidden forces of economic law on the side of destruction and does it in a manner that not one man in a million is able to diagnose.” 

But not only did the ruble fully recover, it turned out to be the world’s best performing currency to date in 2022. Regardless, the western commentariat wasn’t inclined to change its tune. Reuters published an article titled, “Ruble’s strength is a sign of Russia’s weakness.” Its author, Pierre Briancon illuminates us that, “the Russian rouble’s recent sharp rebound reflects economic weakness, not resilience.” His reasoning is utter garbage, reflecting the Russia Derangement Syndrome that’s infected many minds in the west.

The Syndrome has made any positive statement about Russia wholly indigestible to the western intellect. It has become like gluten to the gluten-intolerant. At the same time, any rumor, quip, soundbite or cliche that denigrates Russia readily meets eager minds that will latch onto it and brandish it around as proof positive that Russia bad. 

Thus, Reuters’ Briancon thought it fit to remind us about the Potemkin villages (faking prosperity, for god’s sakes!! Such a Russian thing to do, so totally alien to the unblemished western mind). He goes on talking about Putin “coercing” exporters to convert their accounts to rubles, slapping “punitive” interest rates, etc. You know, the same bag of devious trickery that had made the Argentine peso, Venezuelan bolivar and Zimbabwean dollar such stellar performers in the years past.

Well, whatever. The collapsing ruble was proof of Russia’s weakness. The rising ruble is also proof of Russia’s weakness. In fact, everything is proof of Russia’s weakness.

THE EMPIRE OF LIES

Vladimir Putin called the west an empire of lies and I think we all understand what he’s saying. The Russia Derangement Syndrome did not emerge because our media reported honestly about Russia but only happened to find bad things to say about it. To the contrary, the negative image of Russia has been relentlessly cultivated for many decades to turn it into a core cultural fact in the west. Here are just a handful of concrete examples:

• During his lecture at Yale University in September 2018, Valdimir Pozner told the audience that he had paid a team of researchers to pull from the archives of the New York Times all stories related to Russia over a three year period (2014, 2015, 2016) to see how many of them cast Russia in a positive light. They found zero positive mentions of Russia.
• In March 2017, the US National Reconnaissance Office launched a spy satellite aboard an Atlas V rocket powered by the Russian-made RD-180 engine. The 1,500-word official press release did mention the engine three times, but never once disclosed where it was made. Media reports about this event followed suit, scrupulously omitting the Made in Russia part. Clearly, an “Upper Volta with missiles” or a “gas station with an army” shouldn’t be capable of building advanced technological products.
• In 2015, Forbes contributor Mark Adomanis published an article “10 Charts that Explain Russia.” Adomanis was careful not to add any positive or approving language of his own, but simply presented data that showed positive trends in Russian economy and society. In fact, Adomanis’ language was quite defensive: “Some people find this impossible to accept. They ‘know’ that Putin’s malevolence, corruption, and incompetence have spilled over into every corner of Russian society...” But for the offence of violating the fatwa “thou shalt not speak positively about Russia” Adomanis’ article was promptly flushed down the memory hole. 404-file not found.
• In what was ostensibly a travel program, BBC’s Simon Reeve managed to paint a comically dark image of Russia. The creepy caricature was appropriately debunked by Graham Phillips, another Brit who actually lives in Russia.

This kind of distortion of our information space has been almost constant over many decades and it has turned irrational Russophobia into a cultural fact in the west. 

MIND THE WINDS OF CHANGE

But truth is not irrelevant. It is not merely a quaint quality we should perhaps desire and acknowledge in a perfect world, absent the pragmatic exigences of the concrete challenges we face. Truth – investigating it, learning to recognize it, and not only telling it but sharing it far and wide – is an absolute necessity. With regards to my professional occupation, I’ve repeatedly proposed that the first pillar of a sustainable, successful approach to portfolio investing should be truth (followed strategy, discipline, patience) entailing a clear-minded assessment of what transpires in the world.

But the importance of that clear-mindedness transcends the investing considerations. Given today’s geopolitical developments, the clash between the unipolar world order and the emerging multipolarity will have profound implication for history as it unfolds and on the future of humanity. Seeking to see things as they really are, as opposed to the way we might wish them to be, shouldn’t be a controversial proposition. As Stopford Brooke said, “If a thousand old beliefs were ruined in our march to truth, we must still march on.” 

—***—

The above article was first published in this morning’s TrendCompass report (17 May 2022). For investors, traders and hedges you might want to consider subscribing to I-System TrendCompass, possibly the very best trend following newsletter on the market today. One months’ test drive is free of charge. Trends represent far and away the most powerful drivers of investment performance. The most reliable way to capture the windfalls from market trends is through systematic trend following. For more information, please check out I-System Trend Following and our superb turn-key portfolio solutions.