An Interview with Doug Casey

Via John Robb.


Your first slice of doom:

Daily Bell: Will there be accompanying civil unrest – rioting, looting and assorted acts of criminal behavior?

Doug Casey: Almost certainly. I think the riots we have seen recently in London, the various flash mobs we have seen around the US, and even the rioting that happened in Vancouver, are just an overture. When people don’t have jobs – and actual unemployment in the US is running at over 20% if it is calculated the same way it was 30 years ago – they become very unhappy, while they have lots of time on their hands. Combine that with the fact a vastly higher number of people live in cities than was the case in the ’30s – trouble always arises from cities. Combine that with skyrocketing inflation and a generally collectivist/statist psychology on the part of all segments of the population, and the result is inevitable. Living in a big city, or even a suburb, impresses me as a mistake.

On the Fed, monetary policy, & QE3:

Daily Bell: Recently, Alan Greenspan said on NBC that the US would never default because the Fed can always print more money. (Watch that video here.) Isn’t that default by devaluation? Who does it hurt the most?

Doug Casey: Yes, that’s exactly what they are going to do – print – and it’s going to devastate the middle classes, the people that save. That is in fact what they are going to do. As I said before, it would be far better if they defaulted overtly – that would punish those who lent the government money, it would ruin the government’s credit, it would force the government to cut back radically and would likely save the dollar. But they’ll do none of those things. Greenspan and Bernanke should both be hung by their heels from a lamp post as an example, although it probably wouldn’t do any good in that they’re both just stooges, caught up in a tide of events far beyond their control at this point.

Daily Bell: Was Bernanke’s announcement to keep Fed rates low for at least the next two years surprising to you? Is it going to help the economy?

Doug Casey: Bernanke is an utter fool, an academic with no experience in the real world, operating on totally fallacious and destructive theories. Holding rates to arbitrary and artificial low levels is exactly the opposite of what should be done. Interest rates have to go up to stop people from borrowing and get them to save. It’s one of the things that ensures they are going to destroy the dollar.

Daily Bell: What do you think about QE3? Will it happen? Will it help?

Doug Casey: It’s happening now. It has to happen because how else are they going to finance a trillion and a half dollar federal deficit? And that deficit is going to go higher. It’s happening as we speak. Foreign central banks can see what’s going on. Nobody wants to buy treasuries; the Fed is the only buyer at the low interest rates that they have engineered. The Fed should be abolished. The only good thing about what they’re doing is that they’re going to destroy themselves. But the government will just replace them with a new central bank.

Now, they wander into some pretty fringe territory a bit further down, but in all, it’s worth your time. I pulled out the two bits above because they shed some light on two key points I talk about often.




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