The Greater Depression Goes On and On

Monday, September 5, 2011
By Paul Martin

Doug Casey on the Continuance of the Greater Depression and the Brighter Prospects for Gold

by Anthony Wile

Introduction: Doug Casey has appeared on hundreds of radio and TV shows, and has been the subject of articles in People, US, Time, Forbes, The Washington Post and numerous other publications. For nearly three decades, Doug Casey and his team have been correctly predicting major budding trends in the overall economy and commodity markets.

Daily Bell: Welcome, Doug. Let’s jump right in. Are you still convinced we are heading into a “Greater Depression”?

Doug Casey: Yes. There is no question in my mind about that. Governments all over the world have created trillions of currency units since 2007 in the mistaken idea that it would create prosperity. The Americans – but also the Europeans, the Chinese and others – have papered things over for the short run mainly by inflating the stock markets, artificially depressing interest rates, and slowing the fall of the real estate market. All that extra currency has made people think they’re richer than they are, and has encouraged extra consumption – which is a large part of the problem. Now they’re out of bullets.

We are coming out of the eye of the hurricane and it’s going to be much, much more serious than it was in 2007, 2008 and 2009. That’s because all those currency units they created are causing tremendous price rises on the retail level. It’s going to be devastating for the average guy.

Daily Bell: How long do you expect it will take before there is a complete breakdown in confidence of the US dollar?

Doug Casey: It’s happening right now. The Chinese – or at least their central bank – have more US dollars than anybody else, and they want to get rid of them. They are trying to offload those dollars, for instance in Africa, to get rid of them for real wealth. Nearly everybody in the world feels this way. The new deals that they cut, with the Iranians and the Argentines for instance, are almost like barter deals. Nobody wants to use the paper currency of an unreliable third party. The US dollar is like an Old Maid card; nobody wants to get stuck holding it.

I think in five years the dollar will have lost its reserve status completely. It may be more like two or three years. I hate to put such a near-term time frame on something that’s so momentous in size. But I don’t see any way out.

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.

The Rest…HERE

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