Doug Casey on the Return of the Crisis Creature
Interviewed by Louis James
L: Doug, on March 3, you and I spoke about how to profit from the coming collapse of the euro. Prior to that, we talked about a major market correction on the way this year. Just last week, we saw a major confidence crisis hit the eurozone and the Dow drop 1,000 points in one day’s intra-day trading. It looks to me like the beginning of a sequel to the film we saw in 2008: Return of the Crisis Creature. How do you see the latest market developments?
Doug: All of the problems we’re confronting today were completely predictable – and, actually, were predicted by people watching the trends 30, 40, and even 50 years ago.
L: Not to mention our predictions of a currency regime change and a credit crisis in the International Speculator in 2006 and 2007. But who was predicting these things decades ago?
Doug: The Austrian economist Ludwig von Mises, for one. He never put a time horizon on his projections, but he did say that the Keynesian “spend yourself into wealth” economic policies that were being lauded and implemented all over the world would result in disaster. He was so obviously right, and the politicians and social engineers who used Keynes as an excuse to encourage entire countries to live beyond their means were so obviously wrong, who would have thought it would take decades for the whole thing to implode?
Harry Browne got it right – not only what would happen but when it would happen, in his book, How to Profit from the Coming Devaluation, back in 1970. The ’70s were in many ways an economic disaster. It was bad for investors in the stock market, the bond market, and the property markets, and currencies lost value all over the world as well. Things could have fallen apart then, but didn’t for two main reasons: the distortions in the economy were much less serious than today’s, and interest rates were much higher. I think that what’s going to happen now, in the teens, is going to be like the 1970s, but much, much worse.