Currency Wars Defense Blueprint - Newsmax

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Currency Wars Defense Blueprint

Special Report 3 of 3

24 Hours At A Time

Built by Sean Hyman, James Rickards and Robert Wiedemer

Currency Wars

A Publication of Newsmax.com and Moneynews.com

Defense Blueprint

Edited by Sean Hyman

Special Report 3 of 3

24 Hours at a Time

I

f you are waiting for the first shots of the new “currency war” to be fired, you’re listening for the wrong sound. In very real terms, troops are already on the move — silently. In the noiseless, digital world of global financial trade these days, you aren’t likely to notice a change in the markets or the economy, much less pick up on it in the media. That’s why I think these three “Currency Wars” Special Reports are so important. I want to arm you with knowledge about how this war may affect your finances, and importantly, what you can do about it. In Reports No. 1 and 2, I provided investment advice to help you arrange your nest egg. That’s longer-term thinking. But another concern sure to arise is: What can you do to protect your finances on a day-to-day basis as the dollar’s value plummets in the throes of a currency war? Answers to your most pressing questions are what you’ll find in the following pages, with eight tips you can use immediately. I’ve again tapped my two colleagues: James Rickards, author of Currency Wars: The Making of the Next Global Crisis; and Robert Wiedemer, author of Aftershock. They’ve collaborated with me to provide some historical backdrop and the advice you need now as the skirmishes between nations heat up.

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In truth, the resulting global struggle had to do with far bigger grievances, forces beyond the comprehension of the war’s major combatants at the time. Similarly, the two past currency wars — the first, which fell between the World Wars, and the second, which stretched over the tumultuous 1970s and 1980s and started with President Richard Nixon’s move away from the gold standard — also confused their combatants … and even some historians who tried to piece together the facts years later. But at least one historian, Rickards — my friend and colleague in the Ultimate Wealth Report newsletter — has done a tremendous service in trying to fully grasp the implications of the first two currency wars and to prepare us for the third, which he believes already has begun. “Today we are engaged in a new currency war, and another crisis of confidence is on its way,” he writes in the preface to Currency Wars. “This time the consequences will be far worse than those confronting Nixon. The growth in globalization, derivatives and leverage over the past 40 years has made financial panic and contagion all but impossible to contain. “The new crisis will likely begin in the currency markets and spread quickly to stocks, bonds and commodities,” Rickards continues. “When the dollar collapses, the dollar-denominated markets will collapse too. Panic will quickly spread throughout the world.”

The growth in globalization, derivatives and leverage has made financial panic all but impossible to contain.

The Impending Collapse

World War I was precipitated by the 1914 assassination of a little-known Austrian prince.

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Gold: The Canary in the Coal Mine

Homes Losing Ground as Assets — Fast The Federal Deposit Insurance Commission

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30-Year Mortgage Rate Chart 1

You don’t have to look far to see the signs. As Rickards notes, when the dollar and euro are compared against the price of gold, both have been devaluing dramatically. In 1999, it took $275 to buy an ounce of gold; today, it takes more than $1,700! This is a devaluation of more than 83.9 percent. Another way to evaluate the dollar is to compare its strength to stable currencies outside the euro, such as the Australian and Canadian dollars, the Swedish krona, and the Swiss franc. In recent years, the dollar has devalued by as much as 40 percent against such currencies. Rickards approaches the topic of currency devaluations from his background as an investment banker and risk manager with more than 30 years of experience in capital markets. He served as an adviser to the U.S. Department of Defense, the intelligence community, and to major hedge funds. By invitation, he participated in the U.S. government’s first-ever financial “war game,” in preparation for systemic currency breakdown. Rickards now sees gold moving to as much as $7,000 an ounce, and he urges investors to consider buying land and fine art — hard assets, which he argues will weather the economic currency storm ahead. He advocates as well for a strong “cash” position for flexibility, but he doesn’t define cash as necessarily meaning dollar-denominated. While currency wars are fought internationally, they are driven by domestic distress, Rickards explains. Currency wars begin in an atmosphere of insufficient internal growth. The country that starts down this road typically finds itself with high unemployment, low or declining growth, a weak banking sector and deteriorating public finances. In these circumstances, it is difficult to generate growth through purely internal means, and the promotion of exports through a devalued currency becomes the growth engine of last resort. What follows, well into the battle, is tit-for-tat competitive devaluations. Protectionism is soon on the rise, as countries move to institute import taxes and other barriers to cheaper foreign goods.

(FDIC) argues, interestingly, that housing loans as a bank asset should be demoted — pronto. Essentially, the FDIC wants to break housing on bank ledgers into two categories: “good” loans and “bad.” The weaker group would be weighted at between 100 percent and 200 percent of exposure, depending on the conditions of the loan. A weak enough home loan would essentially be more than worthless as an asset — in fact, doubly worthless, an effective liability. Even the best “good” loans would only count about a third of their value, and possibly nothing at all.

7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 2004 2006 2008 2010 2012

The 30-year mortgage rate may be at historical lows, but that doesn’t mean buying a home is necessarily a good financial strategy for everyone. The housing market came crashing down about five years ago, and has struggled mightily to regain any footing, while millions of mortgages remain underwater. SOURCE: YCharts.com

That the FDIC is trying to redefine bad loans as being worth negative 200 percent of their value as bank assets is no surprise to economist and author Robert Wiedemer. He saw it all coming, as written in his prescient 2006 book, America’s Bubble Economy. He followed up with The New York Times and Wall Street Journal best-seller, Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown, with over 500,000 copies sold. “No part of our economy has been more consistently down during the past few years than the housing market. When I wrote the book America’s Bubble Economy in 2006, I said the housing market would be the first of the big four bubbles to pop (the others being private credit, consumer spending, and the stock market). Indeed, it was the first to pop, and it has had the most difficult time reinflating.” In fact, it hasn’t reinflated much at all, Wiedemer says, “leading to all sorts of schemes and

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manipulative techniques by the government in order to force air into the balloon. Obviously, given that nearly three out of every 10 homeowners owe more than their house is worth, according to recent statistics, there is an understandable desperation on their part to get out from under the debt and a desire by politicians to appease potential voters.”

‘Groupthink’ Reigns in the Markets

Investors hope that in time the economy and stock market will automatically recover, Wiedemer says. “But, what happens if they haven’t, which is likely since neither markets nor economies are guaranteed to be self-correcting. That’s when market psychology gets much more interesting. Everyone has been trained by recent experience to expect that the market can be easily medicated at little cost. A groupthink has developed and been reinforced.” That groupthink has made the market much more vulnerable to a major collapse, he explains, exacerbated all the more by the deleterious effects of currency wars being waged between nations. If, in the future, the patient isn’t responding well to the medication of printed money, the shock to groupthink will be huge, he says. “Everyone will change their tune at the same time and feel that the risk of being in the market far outweighs the potential upside to the market.” The most obvious outcome of the breakdown in global finance will be runaway inflation, Wiedemer warns, as the U.S. prints dollars with even more abandon. Much like Germany after World War I, there is likely to be an initial rush of good times, even a rapid decline in unemployment, as the artificial stimulus pumps up demand. “The joys of inflation come quickly; the pain, however, is delayed,” he explains. “There is a lot of obvious short-term gain, then an extended, grueling period of long-term pain. Needless to say, it is very hard to control inflation once it gets going because getting rid of inflation causes even more economic pain.”

On Our Way to Rapid Inflation

Hyperinflation isn’t necessary for the dollar to be ultimately wiped out. Just 10 percent inflation

Contributors to This Special Report Sean Hyman’s extensive background in the financial markets goes back more than 20 years, including as a broker at Charles Schwab and as an instructor for Forex Capital Markets. He has held five financial licenses and has been a stockbroker, manager of a team of stockbrokers, a trading course instructor in the currency markets, a financial writer, and a key speaker at conferences both nationally and internationally. His investing philosophy is based on choosing the assets that will get “inflated” in the future — commodities — and investing in fundamentally superior currencies that will benefit from the U.S. dollar’s decline. He does it in a way that’s simple and, via the use of exchange-traded funds, can be implemented through a standard brokerage account.

James Rickards is the author of the national best-seller Currency Wars: The Making of the Next Global Crisis, and a partner in JAC Capital Advisors, a hedge fund based in New York. He is a counselor and investment adviser and has held senior positions at Citibank, Long-Term Capital Management and Caxton Associates. In 1998, he was the principal negotiator of the rescue of LTCM sponsored by the Federal Reserve. His clients include institutional investors and government directorates. He has been interviewed in The Wall Street Journal and has appeared on CNBC, Bloomberg, Fox News, CNN, BBC and NPR, and is an op-ed contributor to the Financial Times, New York Times and Washington Post.

Robert Wiedemer is the author of the New York Times and Wall Street Journal best-seller Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown, with over 500,000 copies sold. He is a managing director of Absolute Investment Management, an investment advisory firm with more than $200 million under management (absolute-im.com).

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sets the country on a quick path toward 20 percent — then the decline is essentially unstoppable, Wiedemer says. “It’s a long and winding road to 10 percent. Although the huge increase in the money supply indicates we will have significant inflation, the normal lag factors mean it won’t happen soon. In addition, intervention by the Fed, especially paying significant interest on excess reserves, could further postpone the onset of inflation,” he says. As a result of Fed meddling, it could take as long as five years from the first major increases in the money supply for high inflation to manifest itself, although we could start seeing inflation signs sooner. “The road to 10 percent may be long, but we are now most definitely on it. And, most importantly, once we reach 10 percent, it’ll be hard to control,” Wiedemer says. Wiedemer, who is managing director of investment advisory firm Absolute Investment Management, compiled the following 10 crucial steps toward living through the “aftershock” of the bursting-bubble phenomenon that will accompany the oncoming currency war. Wiedemer’s view is that signs of a “recovery” in the past couple of years are premature at best and that the historical up and down economic cycles won’t hold true in the coming years. “This is a big multi-bubble pop, and it’s far from over,” Wiedemer says. What follows is his advice — in his words — to anyone seeking safety in uncertain financial times.

worked so well in 2011 for bonds — continued decreases in interest rates — will work against bonds just as heavily if interest rates reverse and start to rise. However, keep in mind that the world still views U.S. Treasury bonds as a safe haven, and that will keep prices up. The sad part of the situation is that bonds have an increasingly limited upside. So you can stay in bonds and stay ready to sell, but don’t expect the same returns you had last year. Because of the limited upside in bonds and the difficulty in timing the death of the bond bull, you might be thinking you want to keep more money in cash. I wouldn’t do that at this moment, necessarily, but it is an increasingly better alternative over time. If you do keep your money in cash, where should it go? First, don’t expect to make any money in cash. Money markets probably will be miserable: 30-day T-bills were auctioned off for zero percent as recently as January. Short-term money isn’t making any money at all. The alternative is Treasury Inflation-Protected Securities (TIPS). They likely will do better than cash over the next couple of years and don’t have the same risks as regular bonds. It’s probably a good idea to keep at least one-third of your cash in TIPS. A low-cost and easy way to invest in TIPS is through the exchange-traded fund (ETF) iShares Barclays TIPS Bond Fund, whose symbol is, appropriately, TIP.

Tip 1: Beware of an Old Bond Bull Market

With the limited investment choices offered by most 401(k)s, some people are considering getting out of them, either by rolling them over to an IRA or by borrowing or even withdrawing the money. IRAs allow for more freedom of investments while still offering significant tax benefits. Borrowing against a 401(k) or withdrawing the funds to invest elsewhere are more radical approaches and should be done only with full knowledge of the financial penalties and tax implications.

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It won’t take much of a change in interest rates to create some large losses in bond holdings.

Are bonds safe? At some point, the bond bull market will die. But it hasn’t yet, so if you own bonds, keep your finger on the trigger. In the past, paradoxically, the Federal Reserve System’s quantitative easing programs (a form of printing money) haven’t been good for bonds. So be on heightened alert if the Fed starts to print money. It won’t take much of a change in interest rates to create some large losses in bond holdings. What 4

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Tip 2: Reassess Your Company’s 401(k)


Gold Prices - U.S.D/t oz. $2000 Chart 2

Although pulling out of your 401(k) may make sense at a later point as the dollar and other bubbles fall, doing it too soon may not be prudent. If your employer matches a percentage, continuing to make your minimum contribution to get that match will give you the equivalent of a 100 percent return on investment. That means you can afford to lose up to 50 percent before any of “your” money will be negatively affected. While you still have your 401(k), look at the investment options available to you and see how closely you can approximate a portfolio that can withstand long-term declines that are likely to occur in the stock and bond market. This can be difficult, because flexibility is usually very limited. However, at the very least, you should be able to invest in the following: High-dividend stocks, such as utilities: High-dividend stocks offer some protection from declines in the market because they are defensive stocks. However, even high-dividend stocks will not protect you from a major long-term decline. Short-term government bonds: Shorterterm debt instruments will hold up better if the bond market declines somewhat and actually have performed well over the past year. The bond bull likely has some more room to run this year, but the upside is becoming increasingly limited. About 10 to 20 percent in cash: Cash is tough to hold because it doesn’t pay much interest, but it is a form of protection that can’t be ignored in a 401(k)-type portfolio. But when inflation increases, this will become an increasingly costly option. Again, these options should be fine in the short term but will become riskier as we approach the “aftershock/currency war” scenario, which is why, at some point, you may want to get out of your 401(k). On the other hand, if your employer contributions are insignificant or nonexistent, or your investment options are extremely limited, you may want to consider getting out sooner rather than later. If so, the best choice is to roll over to an IRA so you can preserve your tax benefits while having more control over your investments. With an IRA, you will be able to more closely approximate an ideal aftershock-protected investment portfolio,

$1500 $1000 $500 $0 Jan/92

Jan/96

Jan/00

Jan/04

Jan/08

Jan/12

Gold prices have risen dramatically from 2004 to 2012, reflecting a widespread fear in the marketplace that the U.S. dollar is on the verge of an inflationary spiral. Despite gold’s run-up, however, there is still ample room to run for the metal. SOURCE: TradingEconomics.com | COMEX

including having strong positions in gold via ETFs such as the Sprott Physical Gold Trust (PHYS) and SPDR Gold Trust (GLD). However, if you can’t roll over your 401(k) to an IRA, you may want to consider withdrawing the funds altogether, even with a penalty, so you can manage them yourself. Taking a 5 percent to 10 percent penalty now may be better than losing more than half your portfolio’s value later.

Tip 3: Seek a Workable Exit From Social Security, Just in Case

In the past, given longer lifetimes, it usually made sense to wait until later to take Social Security. In the long term, you will receive a higher total benefit. However, given the financial pressures that are likely to hit the federal government in a few years, it is not so straightforward now. In fact, in the scenario of a full-fledged aftershock and currency war fallout, Social Security likely will become means-tested — you will get it only if you need it, meaning you have no other significant income or assets. In addition, the amount of benefits may be decreased through inaccurate inflation adjustments that do not keep pace with true inflation. So the situation is different now, and it may make sense to take Social Security early. Clearly, it depends on your confidence in the government’s willingness and ability (both are important) to pay Social Security benefits at the current rate for the next 20 years.

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Tip 4: Buy a Primary Home, Yes . . . But a Vacation Home, No Way

Real estate is no longer a good investment and will lose value significantly as currency wars reach fever-pitch levels. Just because prices are low doesn’t mean they won’t go lower. In fact, many economists, including myself, expect they will drop even lower in the coming months. Also, an extended decline in the stock market would weigh heavily against many people making home investments. Eventually, higher interest rates would put even greater pressure on home prices. However, my advice for vacation homes or investment homes vs. primary homes is very different. Vacation homes and investment homes are not a good place to put your money. You shouldn’t buy them, and you should sell any that you have. Remember, there will be plenty of great deals on all kinds of real estate during and after an economic crisis if you want to buy back in. Primary homes are different, however, because they are not mainly investments. They are places to live. It may be difficult to find a rental home that works for you in the right neighborhood. It also may be uncomfortable to have to move if a rental expires, especially if you have kids. Thus, for those in this situation who have a home or need to buy one and plan on living in that home for a long time, I recommend a longterm fixed-rate mortgage with low equity, making only the minimum payments necessary. When inflation eventually hits, you will be making your mortgage payments with cheaper and U.S. Home Values, 1996-2012 Chart 3

$200,000 $150,000 $100,000 $50,000 $0 1996 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 April 2012

The average price of a U.S. home peaked in the 2005 to 2007 timeframe, followed by a devastating turn for the worse in the 2008 credit crisis. Despite a tepid recovery since, signs persist that the worst may not yet be over for the battered housing market. SOURCE: Zillow.com Home Value Index

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cheaper dollars over time. Even in the worst-case scenario, if you end up defaulting on the mortgage later, the chaotic economic environment will make eviction difficult after foreclosure. The company behind the mortgage could go out of business, and courts will be backed up for years with all the foreclosures and evictions, which would allow you to stay in your home for many years. There is a caveat to this advice: If, for whatever reason, you’re planning to sell your home in the next five years, selling sooner rather than later is probably your better choice while prices are still relatively high compared to what they will be later. A falling stock market, rising unemployment, and increasing interest rates will have a devastating effect on the real estate market, especially after the U.S. dollar bubble bursts.

Tip 5: Get Rid of Adjustable Debts ASAP, But Don’t Fear Fixed Rates

No one likes to be in debt. For those in retirement, it can be especially irritating when you’re trying to stretch your dollars, limit losses, and maximize investments. But not all debt is the same. In general, low-interest, fixed-rate debt is far better than any adjustable-rate debt. In some cases, it may even be better than no debt at all. So if you have a fixed-rate mortgage, you have less need to pay down the mortgage. That’s because, as mentioned earlier, with higher inflation, your income will go up with inflation (at least to some extent), while the mortgage payment stays the same. Inflation will lower the real cost of your fixed mortgage payment. Very high inflation actually could make your mortgage payment a very small part of your expenses. Of course, it’s best from a long-term perspective if you save the money from not paying down your fixed-rate mortgage rather than spend it. I might add that the same rule applies to taking on fixed-rate debt versus paying in cash. If you can make the payments easily, low-interest, fixedrate debt (such as a car loan) may be smarter than paying cash in full at the time of the purchase because you can pay it off with cheaper and cheaper dollars as inflation rises over time. However, credit cards are essentially adjustable-


rate loans, and I expect interest rates to eventually increase significantly with inflation, pushing credit card rates higher. So if your credit card debt represents a relatively small portion of your total assets, it makes sense to pay it off to avoid the higher rates later. However, if the only way to pay off your credit card debt is to use up your rainy-day savings, it’s better to keep that savings because it may be more important in the future to have some cash than happy creditors.

Tip 6: Precious Metals Remain the Safest of Safe Havens

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When inflation hits, you’ll be paying your fixedrate mortgage with cheaper and cheaper dollars over time.

Gold (and silver) will rise as most other assets fall, especially as the dollar declines. Why? Because people around the world like to buy gold under two conditions: when inflation rises and when investor anxiety rises. We are certainly going to have plenty of both in the coming years. So much so that gold also will become a big bubble for a long period. We are nowhere near the top of that yet, even though the conventional economic cheerleaders are always declaring that gold is “near its top” and it’s too late to bother buying it. That is completely false. Now or at any point in the next few years, you can catch a ride on rising gold by buying physical gold in the form of bullion coins or bars from local coin stores or online bullion dealers, or by buying gold ETFs, such as the SPDR Gold Trust (GLD) or the Sprott Physical Gold Trust (PHYS). ETFs are easy and convenient and often the only way to buy gold within most IRAs. However, it is also possible to own physical gold within some specialized IRAs, in which the gold is held for you in a gold depository. To purchase bullion, call local coin stores for the best price or check the prices offered by online dealers, such as Kitco or Monex, to comparison shop. The online dealers generally have better prices than local coin stores, but you may feel more comfortable buying gold locally. Many people ask what percentage of their

portfolio should be in gold. There is no one right answer for everyone. In many cases, I would suggest 20 to 25 percent of a portfolio in gold. This could be as high as 35 percent for investors with more tolerance for short-term ups and downs. On the other hand, many of my clients have as much as 50 percent of their portfolios in gold because they feel that confident in gold’s extended outlook. In the long view, I’m also confident in gold as an investment. However, in the shorter term, expect to see plenty of volatility. When people ask me when gold will fall, my answer is, “As soon as you buy it!” Many people don’t enjoy being on such a roller coaster. Thus, you may prefer to invest a little bit at a time to minimize shortterm losses. You can increase the percentage of gold in your portfolio as we get closer to the dollar bubble burst in a few years, when gold will really begin to take off.

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Tip 7: Reconsider Guaranteed Student Tuition Plans and 529s

While it depends partly on the specific benefits in your state’s 529 plan, my general concern is that many states have limited 529 options. Hence, it has similar disadvantages to a very restrictive 401(k). If you can invest only in stock and bond funds, you risk losing most of your value in a situation in which the global economy breaks down. If the state offers you something special, such as protection against inflation for all in-state tuition, and you are sure your kids will go to one of the state colleges covered, then the decision becomes a bit trickier. Inflation protection is a good benefit. My longterm concern is whether the states can deliver on that promise. States aren’t anticipating high rates of inflation. If we have high inflation, it will simply not be possible for states to make good on their promises. Just like they will have to change their pension and healthcare promises to their retired employees because of severe budget constraints,

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they will have to do the same for 529 plans. Even a modest decline in the stock market (compared with what I think is most likely postbubble), of say 20 or 30 percent, will do a lot to minimize or eliminate the advantage of any 529 plan. These plans were set up with the idea that the stock and bond markets will continue to deliver a strong long-term performance over the next 10 to 20 years. If those markets don’t perform in the longer term — and I don’t believe they will — then the basis for most 529 plan investing is lost. Remember, the stock market hasn’t performed well in the past 10 years, with the S&P 500 being flat and Nasdaq down 40 percent since 2000. For most people, a 529 is probably an investment to avoid.

Tip 8: Don’t Have Insurance or Annuities? Probably Best Not to Buy Now Annuities and whole life insurance may have been a good idea at one time, but no more. Annuity and whole life insurance companies are heavily invested in long-term bonds, commercial real estate, and, to a lesser extent, the stock market. When these markets fall, the investments these companies make to fund whole life policies and annuities will fall along with them. As hard as it is to believe now, even today’s biggest and most well-funded annuity and whole life policies would not be able to survive the huge drop in stocks, bonds, and real estate that would come with a serious economic crisis. Even if we assumed that payments on annuities and payouts from life insurance would continue, they certainly will not keep up with inflation. Even inflation-protected policies have a limit on how high they will go, and that limit will be lower than inflation will head. So you’ll lose out, even under the best of circumstances. Even if a market shock does not occur, DISCLAIMER: The owner, publisher, and editor are not responsible for errors and omissions. This publication is intended solely for information purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or sell or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections

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annuities are not necessarily such a great idea. Annual fees can be as high as 3 percent, and there are often penalties for canceling an annuity early; it’s a higher-cost, less flexible investment fundamentally. If you need life insurance — and many do, including me — I recommend getting term life policies rather than whole life.

Empower Yourself

As you can plainly see from Wiedemer’s advice in the preceding eight tips, readying yourself for the effects of a currency war is a far-from-easy proposition. It will involve a lot of rethinking on your part, discarding financial rules of thumb you may have long taken for granted. But as James, Robert and I have pointed out throughout this three-part series of reports, how the economic world functioned in the past is unfortunately no road map for how it will work in the future. The road the global powers have traveled down is new — while currency wars have been fought in our history, never has there been so much at stake as there is now. The weapons of mass currency destruction are much bigger, and we can only guess what they’ll do when activated. Because of that, caution and proactivity is urged. We don’t want to see anyone stand pat, only to be steamrollered by the degradation of the U.S. dollar’s value. And we don’t want to see inflation swallow your hard-earned savings in devastating chunks. That’s why we’ve provided the advice in this Special Report, and hope you take it to heart, standing tall in the face of such economic uncertainty. All of us can survive, and even thrive in the aftermath, when the world ultimately begins its slow recovery from the battles being waged in the financial trenches. Good luck, and Godspeed! 

of future conditions are attempted. In no event should the content of this market letter be construed as an express or implied promise, guarantee, or implication by or from Ultimate Wealth Report, or any of its officers, directors, employees, affiliates, or other agents that you will profit or that losses can or will be limited in any manner whatsoever. Some recommended trades may involve securities held by our officers, affiliates, editors, writers, or employees, and investment decisions may be inconsistent


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