Join Jason Hartman and Doug Casey of Casey Research for a candid discussion about the condition of America and what is to come. Doug feels we needed a depression, but it doesn’t have to be as long and dismal as it’s going to be for most people. The U.S. government has gone about everything completely opposite of the right way; it’s totally bankrupt. They’re selling money/debt to the Federal Reserve because no other country in the world wants to buy our devalued American dollar. Doug feels for the average American because he/she is not going to profit from it and is going to be turned into a common serf. Pension funds are in trouble and are nothing more than the government’s scheme to finance its debt.
We may see more wars in the future as politicians look for someone to blame, as happened in the Great Depression of the 1930s. The rich will be those that own real estate around the world. Doug feels it’s too early to buy U.S. real estate unless it’s bought with low-interest, fixed-rate mortgages because the debt will be inflated away. Sharing a position with Jason, Doug is not a fan of the stock market and feels that commodities are going to eventually bottom out with all of the new nanotechnology.
While he’s still bullish on commodities because he’s bearish on the dollar, Doug recommends buying real estate in other parts of the world, using Rothschild’s philosophy of buying when blood is running in the streets. Our biggest enemy is our government, so people must diversify politically, geographically, internationally, and most Americans don’t know anything about it. Looking at stocks, while Doug wants nothing to do with them for the most part, he sees mining stocks moving. They’re relatively cheap right now and while they’re a speculative venture, with thorough research, one can find a few good mining companies that are seeing strong returns.
Inflation is going to get a lot higher because the government has no choice but to print money to pay its debts. It’s the 11th hour and now is the time to act, to position yourself to ride out the storm. Doug’s guess is that when all of this bottoms, mortgage money will not exist and people the world over will have to purchase property with cash. They will be paying real value versus the inflated values of mortgage companies. Doug expresses his concern that our current economic situation is very serious. As he looks around, he doesn’t see any real bargains.
We’re still in the eye of the hurricane, and he forecasts that as we go back into the storm, it’s going to be a lot uglier than it was in 2008. He calls this the Greater Depression. This is a time when you don’t want to be rooted to a spot like a plant. In turbulent times, plants usually get eaten up. Doug is a widely respected preeminent authority on “rational speculation,” especially in the high-potential natural resource sector.
He is a high respected author, publisher and professional investor, and graduated from Georgetown University in 1968. Since that time, Doug has literally written the book on profiting from times of economic turmoil. He is the author of Crisis Investing, which spent multiple weeks on the New York Times bestseller list in the No. 1 position, and became the best-selling financial book of 1980.
Doug also authored Strategic Investing, breaking the record by receiving the largest advance ever paid for a financial book at that time. Doug’s next book, The International Man, was the most sold book in the history of Rhodesia. Doug Casey has been a featured guest on such TV shows and radio shows as David Letterman, Merv Griffin, Charlie Rose, Phil Donahue, Regis Philbin, Maury Povich, NBC News and CNN. He has also been the topic of numerous features in periodicals, such as Time, Forbes, People, and the Washington Post.
Doug divides his time between homes in Aspen, Colorado, Auckland, New Zealand, and Salta Argentina. He has written newsletters and alert services for sophisticated investors for over 28 years. He has lived in 10 countries and visited over 175. In addition to having served as a trustee on the Board of Governors of Washington College and Northwoods University, Doug has been a director and advisor to nine different financial corporations. Doug is currently the founder of Casey Research, a research company that watches every sector, looking for opportunities in the world.
Casey Research is a believer in free markets and understands the fundamental reality that the more a government interferes in a market, the more likely there will be consequences…negative for those unaware, but positive for those who are aware. More details about Casey Research can be found at their website: http://www.caseyresearch.com/cwc. Also, this PDF is from Doug’s view of War on Terror: http://my.caseyresearch.com/pdfs/crTcr20111116102350.pdf?ppref=RIV012SR1211A
ANNOUNCER: Welcome to Creating Wealth with Jason Hartman! During this program Jason is going to tell you some really exciting things that you probably haven’t thought of before, and a new slant on investing: fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self-made multi-millionaire who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it! And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.
JASON HARTMAN: Welcome to the Creating Wealth Show! This is episode #231, and I’m your host, Jason Hartman. Thanks so much for joining me today. And it is December. Wow. Where has the year gone? And where have the last 10 years gone? It is amazing how quickly time flies, isn’t it? I mean, I know you all feel that way. It’s just incredible how quickly life passes us by. And you know, that really brings up an interesting point. So many people out there are drawn to those quick fixes, those get-rich-quick schemes, and scams out there, and it is amazing—I think you see this more in a down economy, where people are in a lot of different network marketing things, and you know, some of those are very good companies, but a lot of them are hokey, to say the least. And you see these people switching around from deal to deal, and you’re all got friends like this. Maybe you’re one of those people. I’ve been tempted before myself, so I do understand that.
But what is so interesting about time, is that no matter what, it passes, doesn’t it? And if you just get on board, and either start, or expand, your real estate investing career with the good old proven buy and hold strategy—the buy and hold strategy, it just works, in real life. Then you don’t have to spend all the time going from one thing to another, flitting in and out of this deal and that deal, waiting for your ship to come in. So many people have that mentality, that gambler’s mentality. And when you look at it—here it is. It’s almost Christmas, it’s almost New Years, it’s almost 2012, and time passes so quickly, and as prudent buy and hold real estate investors, the people listening to the Creating Wealth Show—we’re the real deal. We’re really doing this in real life, as opposed to all of those schemers and scammers out there that have the sort of flavor of the week and the get rich quick scheme.
But time passes so quickly! And we’ve shown you, in prior shows, how our refi till you die plan is such a tax efficient vehicle for achieving wealth, and harvesting wealth, through income property investing. And how quickly seven years pass. It’s been interesting, since my move to Arizona, living in a community that has got so many young people. And that’s one of the things I love about it. And so many people that are in college, or just recently graduated from college, and you know, they’re fretting about their future. And at age 22, or 25. In your early to mid 20s, it seems like it takes so long to do this stuff. But you know, you let a couple of years go by, and time passes faster and faster and faster.
You know, I remember when I was a kid, and I’d go shopping with my mother, for example. And we’d be in a store, and all I would want to do was leave. 20 minutes seemed like a year, didn’t it, when you were a kid. And I guess the reason time just sort of goes faster and faster—I mean, our perception of it, obviously, is what I’m referring to—goes faster and faster as the years go by, as we age, as we get older, is because our reference point is so much longer. When you’re young—I mean, think about it. A 10 year old has such a small point of reference. And they say that the teenage brain, just literally doesn’t understand things. You can see this in your own children, right? And young people that you talk to. You just don’t understand things when you don’t have enough time. And that’s fine. When you don’t have enough point of reference, enough time behind you as a point of reference.
But what’s really sad is to see people that are in their 30s, their 40s, their 50s, their 60s, and they’re still looking for that get rich quick scheme. They’re still waiting for that ship to come in. They’re still chasing this deal and that deal, and they might be going to the casino, they might be going to the stock market, which is just another kind of casino, frankly. But a more fraudulent one than the one in Las Vegas, because at least there you know you’re gonna lose. Or they’re chasing one business deal after another, or one network marketing deal after another. And it’s really sad. It’s fine to experiment with things when you’re younger and you don’t have much to lose, but at some point, folks, we all need to become mature. Especially when it comes to financial stuff. We need to become financially mature people. And as financially mature people, what do we do? Well, we plan, we execute, and we act. We make decisions, we make prudent decisions, but we don’t get the paralysis of analysis, where we never make a decision, because those people are the ones who suffer the most.
The people, and I have to say—the more, unfortunately many times, the more education, the more formal education we have, that really can hurt us. Because certainly I’ve seen, and you’ve seen, and maybe you are one of these people—people who have advanced degrees—master’s degrees, doctorates. That thinking, where you become so analytical, it really paralyzes you sometimes. It doesn’t do it to everybody, but it does it to a large majority of people with a lot of formal education, I’d say. And that’s why many times, people with less formal education have a huge advantage in today’s world.
Now, of course it hasn’t always been that way. I talk with one of my employees once in a while, and this particular person, who will remain nameless, but this particular person kind of looks back once in a while and is sort of bothered by the fact that they didn’t finish college. And of course, neither did Steve Jobs, Bill Gates, Fred Smith, and the list goes on and on. A lot of people didn’t. And I would say—look. If it’s 1970, or 1975, or 1980, or even 1985—yeah. Back then, the prudent advice was, finish college. Maybe get a master’s degree. And go on to higher and higher education, sure. But in today’s world, I don’t know. I think today’s world depends a lot less on formal credentials, and a lot more on self-education and action. And we are really judged not by what we know—because we’ve all heard the know-it-all person who’s at the dinner party, or at the dinner table, and is talking, and the person who just knows everything, but has done nothing with their life.
I remember I went to this course years back, and it was a self development course. And I really liked this particular course that I’m referring to. And I got my girlfriend at the time into the course, and she liked it too. And a few years later we were kind of reminiscing about it, and I said, there are people who are the big winners in the course, in the name of the course, and people who are actually the big winners in life, the real course, right? And when you look at time, and how time goes by—I guess my point here, in rambling on about this, is that, start your plan. If you’ve already started your plan, expand your plan. Get more good properties, and let time go by. Because time passes so quickly. Before you know it, you wake up, and you’re 3,650 older. And that’s about 10 years, isn’t it? I mean, I’m not counting leap years in there. But it’s about 10 years. 3,650 days, huh? 365 times 10. And before you know it, that income property that you purchased 3,650 days earlier, has turned into some real wealth creation that allows you to do bigger and better things with your life. So, income property—it’s obviously the way to go. It’s the most historically proven asset class in American history, if not in all of human history, frankly.
Today, we have a great interview with Doug Casey. And this interview is fresh; I just did it in today, actually. He was in Buenos Aires. You may have heard of Doug Casey. He’s rather famous as an author. And he’s a bear, he’s a pessimist, but I think you’ll learn a lot from this interview, and it’ll be really interesting to you.
A couple of things before we get to the interview with Doug, though, who came to us from Buenos Aires, Argentina, a country that has been riddled with economic crises and corruption, and I think you’ll find the interview very interesting. But of course, what do we have coming up on January 7th? We have our Creating Wealth Boot Camp in Phoenix, and that will be a fantastic boot camp. Again, the first one where you will get to not only meet with local market specialists, but tour properties with them. So what we decided to do, because a lot of you are asking about the tour, is, this is not a formal tour, the way we’ve had market tours, like we did in Phoenix earlier this year, like we did in St. Louis just recently. It’s not as formal as that. However, we did set a time, and that is Sunday morning, January 8th. That’ll be the morning after our Creating Wealth Boot Camp, which is all day Saturday, January 7th. We will have, at 10AM, we will leave the hotel—and by the way, I’ll be giving you venue information on future shows, and anybody who’s registered, we’ll email it to you. But we will leave the hotel to tour properties in the greater Phoenix area, and we will probably do this with two of our different local market specialists, with two different companies, potentially, showing you some different types of properties.
And, speaking of local market specialists, we recently—well, not that recently, but about a month ago—hired a new area coordinator. And I tell you, she is really knocking them dead by bringing on some new local market specialists. And these aren’t necessarily in new markets. In two of the cases we’ve done some overlapping, and in one of the cases, we opened up an old market that we want to open up. But we didn’t want to do that with our prior provider, because we think we found a better local market specialist in that market. So, look forward to that. We’ve got some new news coming up there, we’ll have them interviewed on future shows and so forth. But, some great new local market specialists coming on board.
Again, one of the things that was said at the last Meet the Masters events that we had in Irvine, California last October was that, this industry is really becoming a mature industry. And what do I mean by that? I don’t mean the real estate industry. The real estate industry is an extremely mature industry. I mean, the National Association of Realtors has been around I think for over 100 years now. So I don’t mean that, when I say mature. I mean the investment property industry. And we’re finding better and better local market specialists, all around the country, that are buying properties in bulk, at auction, or through various banking relationships. A lot of these relationships come from local community banks. Not the big banks. Oddly enough, the big banks—a lot of times, you just don’t get the great inventory from them. They’re so disorganized. They’re such a mess, most of them. And I hate to talk about Bank of America that way, but—it’s not just Bank of America. Many of them are.
But a lot of them, these are from local community banks, and they’re REO, or real estate owned inventory, and the local market specialists will just get this inventory through relationship with individual people on a much smaller scale, buy that inventory, rehab that inventory, and bring it to you, our client. Again, we’ve been really working on some new local market specialists. And new markets, too. But we like the markets we’re in, pretty darn well. And I know that may seem kind of boring to you, that we haven’t been adding a lot of new markets. But our markets are good! They’re working! Why upset the apple cart? But we are constantly looking for slightly different price segmentation, product types, and submarkets, within those markets. So, more coming on that in the near future.
Someone also asked me recently kind of an interesting question. They said something along these lines. Jason, some of these guests you have on your show—they don’t really seem to agree with your philosophy. And that’s true. They don’t, a lot of times. I get guests on because you can learn from parts of their philosophy, and piece parts of this person’s philosophy, part of that person’s philosophy, and piece them together like a puzzle. And really, really create something powerful in terms of an investment philosophy. But you know, this is one of the few shows where we actually have a philosophy. Where I actually have a cohesive philosophy, and where we’ve put it all together, rather than just chasing the deal of the week, or the deal of the month type philosophy.
And this person asked me, why did you have that guy on once, you didn’t talk about it on your show, but I went to his website afterwards, and he’s talking about this infinite banking thing. And it’s kind of interesting, that someone asked me this, because I was talking with one of our other guests about that particular guest, and they were just saying that they have a lot of wealthy clients. This is a financial advisor who we’ve had on the show, and I don’t want to mention the name here, but I was having a conversation with him about it. And he was saying, I have very, very wealthy clients from all over the world, and they don’t do infinite banking.
A lot of these things are gimmickry, folks. This is not the simple—by the way, I think a lot of times, gimmickry and scams and schemes are passed. One way they pass them through is through complexity. Because at some point, the mind just sort of gives up trying to understand, and they just—the mind gets a little lazy on us, and just kind of says, okay, look. I’ll just do it. And that’s one way that a lot of experts really give bad advice! And they use gimmickry, they use complexity, they use overgeneralization, or just downright fraud. And I think downright fraud is the one we see largely in these pooled investments on Wall Street. And a lot of that fraud is frankly legalized! I think the whole lobbying industry is frankly kind of fraudulent. I think a lot of these accounting schemes that are totally legal are frankly rather fraudulent, the way assets and liabilities can be booked, and special purpose vehicles can be used. Thinking back to Enron, and so forth. A lot of this stuff isn’t actually illegal, when you look at the real fine points of it! But it should be. And it’s not illegal, because of lobbying and because of all of these different ways that these big companies with massive resources get around it.
And I heard someone interesting the other day on the radio talking about Wall Street. Actually it was yesterday; I was listening to Money Radio, and they were talking about Wall Street, and just saying, just looking at all of these different fund managers—mutual fund managers, hedge fund managers, and talking about how the record just almost never, when you allow or differentiate for luck, and take a little bit of luck out of the equation, a little bit of waiting for luck—when you do that, they really, rarely ever beat just the standard—the indices themselves, I mean, it’s ridiculous! That people pay all this money to these fund managers, and they rarely beat them. And they were just talking about how Wall Street is nothing more than a distribution platform for junk assets. And you know, I have to agree. Be a direct investor.
So, remember. When you’re not a direct investor, what is Commandment 3? Thou shalt be a direct investor. When you’re not a direct investor, you leave yourself susceptible to three major problems. Number one, you might be investing with a crook, okay? And we all get that. Number two, you might be investing with an idiot. Number three, assuming they’re honest, assuming they’re competent, they take a huge management fee off the top for managing the deal. You have none of these problems when you’re a direct investor, because you are in control. Thou shalt maintain control. That is the 3rd Commandment of my 10 Commandments of Successful Investing. So keep that in mind.
So, without further ado, let’s get to our interview with Doug Casey. And many of you know that I run several other shows, and they are available, of course, on iTunes, and at the various websites. But one of them is called the Holistic Survival Show, and that one is the doom and gloom show. And I think we’re going to run Doug’s interview on there too, because it’s pretty doom and gloomy. He’s bearish. But again, he talks about some ways in this interview where there’s a silver lining in these clouds. So, I think you’ll enjoy this one. It’s pretty interesting.
And one more quick announcement, before I go to the interview with Doug. Audible. Audible.com is the largest distributor of audio content on the Internet—of audio books, and educational audio content. And you can now purchase—and I have to say this, I wasn’t actually going to announce this on the show, because I’m a little bit bothered about it, frankly. You can now purchase several of my products on Audible. And Audible gets to decide the prices of the products. I’m happy that we’re on there, don’t get me wrong; I’m very happy that we’re on there, but I’m a little bit upset that they have priced some of these products very, very low. So, before I contact them, and before they raise the prices—they do have pricing discretion—I highly recommend that you go to the Audible website and type in Jason Hartman, at Audible.com, and buy all those products, because they’re incredibly cheap. They’re not exactly the same product that are on my website at www.jasonhartman.com, but, even the way they’re bundled here, I think they are very, very underpriced. If you’re interested, these are super cheap. So, go to the Audible website and get them. You can also get that same content on Amazon.com, and on iTunes, because Audible is the exclusive provider for paid audio book content to Amazon.com, and to iTunes. So, if you prefer to buy them there, if you don’t have an Audible account, you can buy the products there as well.
So, check those out. We’ve got some of our Financial Freedom Report audios on there, and the Creating Wealth Encyclopedias on there, and a few other things. And there are rather long free samples; you can listen to about three minute free snippets on the Audible websites. So that’s Audible.com, and iTunes, and Amazon, you can get them anywhere. So just wanted to mention that to you, because a few of you have asked me why aren’t we on Audible. Well, we are! So, take advantage of that. Especially while these prices are at these giveaway prices right now.
Anyway, I’ll look forward to seeing you on January 7th. Of course we’ll be back with another show next week. We may have John Perkins back on to talk about being an Economic Hit Man, and enjoy this interview with Doug Casey; we’ll be back with that in just a minute.
JASON HARTMAN: Are you aware that the largest transfer of wealth in human history is underway? Are you concerned about protecting your income, savings, or home equity? All these bailouts benefit the Wall Street crooks and the Washington elites, while costing the middle class. Experts are predicting difficult times ahead. The only question is, where will you and your family end up? With the haves, or the have-nots? My name is Jason Hartman, with Platinum Properties Investor Network. For two decades, I’ve made a small fortune in the most historically proven wealth creator. Don’t be the victim of Wall Street fat cats who line their pockets with your pension funds. We can teach you how to protect yourself and your family in these wildly turbulent financial times. Create and protect your nest egg the same way 85% of America’s wealthy do. If you’re interested in the most innovative financial education around, it’s urgent that you register for our next event. Learn more about this outstanding event, and get your free CD, at www.jasonhartman.com. That’s www.jasonhartman.com, or call, 1-800-40-JASON. That’s 1-800-405-2766. Your investments could be gone tomorrow. Protect yourself, and act today.
JASON HARTMAN: My pleasure to welcome Doug Casey to the show! He is the author of several books, including Crisis Investing, which spent multiple weeks as the #1 spot on the New York Times Bestseller list, and became the bestselling financial book back in 1980, with nearly half a million copies sold. And I think today you’ll get a very international perspective on what’s going on, as far as the global economy, and economies in various countries, and it’s just a pleasure to welcome Doug from a beautiful city, known sometimes as the Paris of South America, and that is Buenos Aires! Doug, welcome! How are you?
DOUG CASEY: Very good, Jason, thank you! It’s a pleasure.
JASON HARTMAN: Well it’s good to have you on the show, and I’ve been following your work for a long time. Very, very fascinating. What is your take on what is going on in this world today? The Chinese have that saying, may you live in interesting times. And I don’t think they mean that in a positive way. Times are pretty interesting now, aren’t they?
DOUG CASEY: Yes, and they’re going to get more interesting, from that point of view. My view is that we’ve entered upon what I call the Greater Depression. I call it the Greater Depression because it’s going to be much more serious.
JASON HARTMAN: Than the Great Depression was back in the 30s, huh?
DOUG CASEY: Exactly, but also much different from that. At least in many crucial aspects. So, where are we in this adventure? I would say that we’re still very early in the depression. And that’s not necessary. It was necessary that we have a depression. Possibly because actions have consequences. But it’s not necessary that this depression be as long and as dismal as it’s going to turn out to be, because the government, which everybody believes should control the economy, is doing not only the wrong things, but exactly the opposite of the right things. So, it’s going to be quite unpleasant for most people.
JASON HARTMAN: Yeah. Well, let’s of course talk about the strategies for success through this, because every problem creates an opportunity. And what seems to be happening now, at least in the US—especially in the US—is that there’s just this attack on the middle class. It seems like the middle class that has been the great, stabilizing force in America is just under attack! And it’s just disappearing! And you know, a small number of the middle class are moving up into the upper classes, but the vast majority are being pulled down to the lower middle class. And I think that problem is going to continue. And it’s going to get a lot worse, if you consider that to be a problem, as I do.
DOUG CASEY: I totally agree with you. I don’t worry about the rich people. They can take care of themselves. They can bribe politicians to have laws passed in their favor. They can hire accountants to juggle their taxes. And if they need to get out of dodge, they can hire a travel agent.
JASON HARTMAN: Yeah, right.
DOUG CASEY: They may be eaten, in the long run. But for the moment, I don’t worry about the rich. And of course, it’s unfortunate that so many of the rich have made their money in the corporate world, in ways that I think are unsavory. But we could talk about them or not, it doesn’t matter. And the poor people—I think it’s very unfortunate that they’re being cemented to the bottom of society by all these government programs that actually make it in some ways advantageous to be a poor person.
JASON HARTMAN: That’s an interesting way you look at it. Cemented to the lower classes. Because politicians—they want to build and cement, using your word—I love that, the way you put it—this permanent voting block in, by providing handouts, and really keeping people down, through these various government programs! Whereas the foundational ideas of America was rugged individualism, and the fact that anybody coming from anywhere, from any background, can make it in America. And in other western, less socialized countries. But that’s really changing, isn’t it?
DOUG CASEY: It is. And it’s going to have very, very nasty social and political consequences in the future, the way that the US has changed. And incidentally, I don’t refer to the United States of America—I don’t call it America anymore. And the reason is, that America was an excellent and unique idea. But unfortunately, it’s changed enough that I no longer want to besmirch the idea of America with what’s happening in the United States. Because the United States now is just another one of 200 other nation states that cover the face of the globe like a skin cancer at this point. And there’s really no difference anymore between the US and any other place on the planet I can think of.
JASON HARTMAN: Well, tell me more about that. That’s an interesting, and depressing statement at the same time. But expand on that idea, if you would a little bit.
DOUG CASEY: Well, look. My country is wherever freedom lies. That’s what Thomas Paine said. He’s quite correct. And the US was, no question about it, the best place to be for many years. But at this point, things have changed radically. Now, I’ve been to 175 countries, most of them several times. I’ve lived in 12, at this point. Right now, we’re speaking from Argentina. So, I had to figure out where I really wanted to spend most of the time—where I could maximize my personal freedom, and my financial opportunity. And it’s not in the US anymore. It really isn’t. There’s much more opportunity outside the US, at this point, I’m sorry to say, for the average American. And I suggest that an American who may be feeling down on his luck, put his grip in a suitcase, or his backpack, and hit the road.
JASON HARTMAN: Well, that’s a very interesting point, and I want to maybe take issue with you on that, just a little bit. I do fundamentally agree with you. I’ll give you this example. And I’ve talked about it on the show before. A friend of mine, he spent the last 7, 8 months in China, opened a business there, has been there many times, and loves it. He has a company in China now, Ireland, and the United States. And I would only say that I agree with you that the direction of the US is so wrong, and it is so bad to see it going in this direction. However, and this is a very large however, I think the US has an awful long way to fall. For example, a lot of other countries are going in the right—in a better direction than the US. But before the two meet in the middle—and I think the US just has a lot further to fall. I agree that it’s going the wrong direction. Government is getting way too big here. But still, if you think about it, as messed up as it is—and boy, it is messed up. With crazy political correctness, massive distractions of stupid things, this idiotic celebrity culture we have here, when there are major issues going on in the world, the news media’s covering the latest, dumbest things like the Kardashians or whatever—it’s just sickening, almost. But we do still have a Constitution that maybe 47% of the country actually still believes in. The other 53% don’t.
DOUG CASEY: That might be an overestimate. I would say that if we were to take the Constitution in front of us, and read it line by line, we’d find that all of the important aspects of it are dead letters. The only parts of the Constitution that are observed are technical, parliamentary types of things, like where it says the vice president shall be the president of the Senate. Okay, they observe that. And they observe other things of that nature. But the important things in the Constitution, such as the Bill of Rights—but there are a number of other things too, that are almost equally important. Like the fact that there are only three crimes that are listed—three federal crimes listed in the Constitution. They totally disregard the whole thing as a dead letter at this point.
JASON HARTMAN: Well, all I’m saying is that—and we’ll get off the Constitutional thing in a moment. But every time they want to attack the Bill of Rights, and I agree that it’s completely under attack, it’s still a big fight to do it. I mean, look. Hirohito back in World War II times, when asked if he was going to consider an invasion of the US, he said, are you crazy? There’s a gun behind every blade of grass in the US. There are still about 300 million guns in the hands of citizens in the United States. We still have the world’s reserve currency. We still have the largest, most powerful military on earth. We still control every ocean on the planet. Yes, a lot of things are wrong. But gosh, don’t we have a lot further to fall?
DOUG CASEY: Yes, we do. I mean—who was it that first said—I think it was Adam Smith that said, there’s a lot of ruin in a country, and the Roman Empire didn’t fall in a day. But let’s take the things that you mentioned. Fortunately we do have a lot of guns in the country. But at this point, the government is very, very anti-gun, and if you have more than a couple of weapons, or if you have more than a bit of ammunition, you can wind up as being on the terrorist suspect list, and homeland security just recently came out and said exactly that, okay? As far as having a gigantic military that controls the world’s oceans, I don’t particularly see that as a good thing.
JASON HARTMAN: Well, I agree, because we’re overreaching and overspending, for sure.
DOUG CASEY: Well, the point of the fact—in point of fact, the US government, and the US as a country, is totally bankrupt at this point. The government is running a trillion and a half dollar per year deficit, and that deficit is going up. Not down. And where are they getting the money? They’re selling it all to the Federal Reserve, because the Chinese, the Japanese, other foreigners, aren’t buying the debt anymore; they’re up to their gills in it. Americans can’t afford to buy it. So, they’re printing money, quite literally at this point, and it’s going to destroy the national currency. So, there’s a lot of problems here, but you know, I don’t want to look just on the dark side. I mean, you can profit from all of this stupidity on an individual basis. I’m just very sorry that the average American is gonna be turned into a serf, in the years to come, because he’s not gonna profit from it.
JASON HARTMAN: And you know what, that is a great thing that you just said—you can profit from all this stupidity. And a few years ago, I guess about 2007, I started changing my tune, and saying, I am no longer an optimist. Nobody could accuse me of being an optimist. I am very pessimistic. But I am an opportunist. So I’ve moved from optimist to opportunist, and there are ways to exploit this complete stupidity that’s going on. And it seems like all the wrong behaviors are being rewarded. For example, before 1971, when we were on the gold standard, saving money—my grandmother’s idea, that was great! But now it seems like the person who’s rewarded is the person who has the most debt!
DOUG CASEY: This is a disaster. Because the people that are prudent, who produce more than they consume, and save the difference—that’s how the world gets better. That’s how you improve your station. Most people save in terms of dollars. But they forget what’s going to happen when those dollars are literally destroyed, which is going to happen in the years to come. It’s going to wipe out the middle class.
JASON HARTMAN: And the reason it will wipe out the middle class is because they will just be inflated to death, right? I mean, you’re an inflation believer, I’m sure, right?
DOUG CASEY: Well, let’s put it this way. We could have a catastrophic deflation. It’s possible. It’s possible that mortgages could be defaulted on, bonds could be defaulted on, the banks could fail faster than the Federal Reserve can bail them out, because they’re not the most competent people in the world. But that’s the best case scenario. The worst case scenario is that they succeed, and print up enough dollars to keep all these failing institutions alive, because that would mean that the currency will be destroyed, and that is worse than what we had in the 1930s when we had a credit collapse.
JASON HARTMAN: So is that why you call it the Greater Depression? Because the destruction of the dollar, and just massive inflation will occur?
DOUG CASEY: Yes, that’s exactly right. And it’ll be like the 1930s in other ways, I’ve got to say. I mean, you’re not gonna have long lines of people waiting for sticky tub crook stoops, because you’ve got 46 people that have the little credit cards, where they can go down to the 7 Eleven and buy Twinkies instead of waiting in a line. So, things are different that way. But there are other things that are gonna be the same. For instance, the 1930s led to the 1940s rather naturally, because when things go badly, politicians look for somebody to blame, and it’s very easy to blame another country for your own problems. So I expect that we’re going to see much more serious wars in the future. Not that we don’t have enough already.
JASON HARTMAN: So, when we talk about inflation, the question everybody wants to know, and it’s always a prediction, but, how much, and when? It seems like we have inflation on the necessities nowadays, but deflation in a lot of other things. Technology, of course, which is generally deflationary due to advancements. But, deflation in major assets. But inflation in food prices, energy, I mean, you know, I just started noticing about a year ago, I never really paid much attention to them in all my life, but, utility bills! I mean, utility bills are becoming a significant issue! Whether it be water, or gas, or electricity—they’re getting pretty high!
DOUG CASEY: Yes, exactly. This is one of the reasons why I’ve been a—real estate has been very good to me over the years, and I’ve owned real estate in half a dozen countries around the world, and despite the fact it’s very good to me, and I watch the US real estate market. We may disagree on this. I think it’s too early to buy US real estate. I hate to be a market timer. That’s a dangerous game to play. I’d rather be a fundamentalist. But, the utility bills, which you pointed out, alone, are one thing that are gonna be more than a lot of people can bear to pay. And their tax bills are gonna go to the moon, because it’s time to eat the rich. And who’s the rich? The rich are people that own real estate. So your tax bills are going up, because of all these local governments being bankrupt. Incomes are gonna keep heading down, I’m afraid, and the fact that you can get a mortgage today at artificially low subsidized rates—that’s not gonna be available in the future. I think that the whole real estate market in the US is built on a sea of debt, a sea of credit, and it’s gonna collapse and wash away. So, I think it’s too early at this point. However, and I know you’ll agree with me on this, if you can buy real estate with a low interest rate fixed mortgage, at least that mortgage will be inflated away. So that’ll make up for your possible losses on the market itself.
JASON HARTMAN: Right, right. You know, I had more than 100 shows I had Pat Buchanan on the show, and he had a great quote about that. I said, well, what do you think about all this mortgage debt, and other debt people have? And he said, Jason, their debt will be washed away on a sea of inflation. You know?
DOUG CASEY: He’s right. The only problem with that—I mean, we gotta look at the good news, if you’re a debtor. But the bad news is that that’s somebody else’s asset.
JASON HARTMAN: Right. No question. So it’s going to impoverish somebody. Or, just create more inflation through bailing out an institution that holds that debt. One way or the other, it’s either taxes, or inflation. It’s one or the other.
DOUG CASEY: We’ve gone beyond the point of no return at this point. It’s not a question of if; it’s a question of when. And the when is happening right now as we speak. This is not a question for the future. It’s happening right now in the markets, and it’s very serious.
JASON HARTMAN: Yeah. So, since a lot of our listeners are really interested in real estate investing, I thought I’d just expand on that with you a little bit more if I could. Number one, when you look at US real estate, it’s so problematic, because the country is so darn large. Most people look at the Case-Shiller Index, which only profiles 20 cities, and when you look at those cities—every year we publish a forecast. Only really about ¼ of them are of interest, I think, to any investor with a brain. And that is markets like Dallas, or Phoenix. So, it’s just weighted in favor of saying yeah, the market is overpriced, and if you look at a place like California, you look at New York, most of Florida’s still a disaster, Illinois, just a complete corruption government disaster, I couldn’t agree with you more. But when you look at areas basically where you get free land and you buy below the cost of construction, and you get a three decade long fixed rate mortgage at 4, 5, 5½% maybe for an investor—wow! Think of it today. You take out a mortgage now, and it’s not gonna be paid off until 2041. What kind of inflation—
DOUG CASEY: No, no. I can understand your argument, and it can make a lot of sense, it really can. And you have to do something with your capital now, if you have capital. You have to do something with it. And so, this is, to me, it’s a logical possibility. Not one that I favor above some others, but I understand what you’re saying, and I think it makes sense.
JASON HARTMAN: So, when you look at that, what else do you think is the thing to do? I’m sure you’re paying a lot of attention to the precious metals world, because obviously inflation oriented, or commodities in general—everybody on earth needs only three things, basically: food, clothing, and shelter. And it seems that maybe commodities of some sort, or any sort, really, are really the place to be. It feels like the equities markets, even with these great corporate profits we’ve got, the stock market just feels like such an abject scam to me in so many ways.
DOUG CASEY: Yeah, I have no interest in the stock market at this point, for a number of reasons. But when it comes to commodities, one thing I will observe about that is that the longest bear trend in history is commodities. The price of commodities have been going down for roughly the last 4,000 years. And with the advent of things like nanotechnology and further increases in other types of technology, commodity prices are gonna go—are gonna start approaching zero. We don’t have time to explain why I feel that, but that is the history, so far. That being said, I’m still bullish on commodities, mainly because I’m bearish on the dollar. And when it comes to gold and silver, they’ve been extremely good to be for many years. And they’re not cheap anymore. They used to be giveaways. They used to be free. But now they’re reasonable priced. I think they’re going considerable higher. But, they’re no longer a one way street where you can make huge speculative gains. They’re more for preservation of your wealth, or cash, in its most basic form.
So, where do you put your money? I mean, look. I bought a lot of land here in Argentina after the crisis, when it was very, very cheap. It’s not so cheap anymore. Recently with some friends, I’m buying apartment buildings in Cairo. I think, well, that’s crazy. That place is in the middle of an Islamic revolution. But I’d say that you’ve got to refer to Rothschild’s famous dictum: you have to buy when blood is running in the streets. And we can get incredibly beautiful buildings on the Nile so cheaply that I don’t actually care if we lose, and I don’t think we will. So, I’m always looking for things like that.
JASON HARTMAN: Boy. That one is pretty exotic. I mean, I would be scared of Islamic countries in general, because I hear that foreigners don’t have rights in their courts, and things like that. That’s just a real exotic one.
DOUG CASEY: Well, there’s problems all over the world. Look, I spent a lot of time in Zimbabwe; started to go there during the war. And I happened—I was last in Zimbabwe I guess about 5 years ago. But if I thought I could manage farmland in Zim, which I probably could, by hiring the right people—I mean, I could look at that. So, I’ll look at anything, anywhere in the world, if the price is right. But I—one thing that’s critical, absolutely critical, and most of your listeners, all of your listeners are Americans, I think, is that the biggest risk you have in the markets today is not the markets; it’s political risk. Your biggest enemy is your own government. It’s hunting you like a lion hunts an antelope out on the [unintelligible]. And if you’re not diversified politically, you’re not diversified geographically, internationally, you’re in a world of trouble. And this is something that most Americans are completely innocent of. They don’t know anything about it.
JASON HARTMAN: Right, right. That’s a very good point. And I’d say the first step to that is the one I took when I left the Socialist Republic of California several months ago, and I’m so glad I did—is just to get into a more business friendly state. Someone listening to this is not thinking, well, gee, I’m gonna leave California and move to Argentina, or something like that, which is a pretty big step. And even you would agree. But just get into a more business friendly state, and diversify throughout the states—a lot of asset protection things you can do within the US alone. But for the wealthier people listening, and the people who are willing to do something that’s a larger step, couldn’t agree with you more. I mean, we’ve got to be thinking like citizens of the world, not just citizens of a neighborhood, or a city, or a state, even. At least be a citizen of the United States, if you’re listening and you’re an American, and think about different states, and diversify. I’d say—I always say with my real estate investors, take the most historically proven asset class—now, you may have a different opinion with me, but I think you like real estate somewhat, or if not as much as I do. But diversify geographically! So, couldn’t agree with you more. Great point.
DOUG CASEY: Absolutely. But a lot of people are unaware of the fact that during the last depression, when there wasn’t nearly as much borrowed money under the real estate market as there is today, that real estate prices on both coasts fell about 90%. In other words, they fell about as badly as the stock market itself did, from top to bottom. And unlike stocks, which I’m not a fan of, at least good companies pay dividends. Well, good real estate can give you a yield, too. But don’t forget, as we pointed out before, the utilities, the taxes, the maintenance, and when you rent the rent real estate, you’ve gotta deal with the people that are paying the rent, and this can be problematical.
JASON HARTMAN: Well, and it’s problematic especially in areas where like you said, political risk is the big risk. And I see all these investors investing in such landlord unfriendly states, like California, like New York. At least especially New York City. The landlords just have no rights. And that’s a part of political risk, you know, when you’ve gotta go collect from a tenant—a deadbeat tenant—you’ve gotta be doing business in a place that is friendly to your cause as a landlord, right?
DOUG CASEY: Yep, absolutely correct. So it’s a real caveat. There are very few bargains in the world today. At this particular moment. As I look at all of the markets across the board, commodities, and real estate, holding cash, and metals, and stocks—and I look everywhere. I don’t see many bargains today. And so, I’m not active, looking for them in the past, because the time to buy is when there are super bargains, when there’s blood running in the streets, which is why I’m doing this Cairo real estate, for instance. But I think in a year, or two, when there’s complete chaos in the financial markets, that might be a time to cherry pick. But not at this particular moment. We’re kind of in our twilight zone. We’re still in the eye of the hurricane. We went through the leading edge of the hurricane in 2008 and 2009, and then we came out to the eye as they printed up trillions of currency units all over the world. Not just the US. And now we’re going back into the storm, and it’s going to be a lot uglier than it was in 2008.
JASON HARTMAN: Let me take a brief pause; we’ll be back in just a minute.
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JASON HARTMAN: Yeah, I think the homeownership rate is going to drop dramatically. I think we’re headed for a huge reduction in homeownership in the US, because like we talked about before we started recording, US real estate through Fannie and Freddie has really been subsidized since the Great Depression. And whenever you subsidize something, or promote something, you cause the price to go up. You cause the ownership rate to become imbalanced, to where it’s higher than it should be, and there are too many homeowners. George Bush had this whole ownership society thing, which sounds good on a political campaign, but in reality, some people just shouldn’t own, and you shouldn’t push them into owning!
DOUG CASEY: You’re absolutely right. It almost forces them to stay with their house, because it’s a major asset, and if they can’t sell it, they’re almost turned into the equivalent of a medieval serf, where they can’t leave the house, they can’t leave the land, as it were. I totally agree with you.
JASON HARTMAN: Well, I agree, and that’s one of the things I think though Doug, and I know we differ on this a little bit, is really beneficial for investors to be offering housing out there. Because the most important thing anybody can have on a job resume nowadays is mobility! To be able to go where the jobs are. And I don’t know if you happened to catch it, but I think it was TIME Magazine about a year ago, September, did this article about how homeownership is actually stifling America. And they profiled all these different cities where the homeownership rates are high, and they made this hypothesis that this causes high unemployment, because it traps people like you talked about—the medieval serfs that can’t leave the land. When you’re a renter, you’ve just got a lot more mobility. And when I was trying to leave California, I tried to sell my house two years ago. Was unsuccessful after months and months and months on the market. I finally sold it the following year, but gosh, if I was a renter, I could have just bargained with my landlord to get out of the lease, maybe pay a couple extra months rent, replace myself with a new tenant, or just wait till my lease was up. But as an owner, I was just literally trapped! Confined! And now I’m a renter, and I love it! Because I’ve got mobility, and I can do my job from anywhere on the planet nowadays. And a lot of people can. Like here we are, meeting through Skype; you’re many countries away from me, and it’s just like being here!
DOUG CASEY: Yep. Absolutely. It’s—this is a time when you don’t want to be rooted to a place like a plant, because we’re going into very tough times, and being a plant is not a good survival strategy in turbulent times. You wind up being eaten, usually.
JASON HARTMAN: Yeah. Better to be mobile and to be flexible so that you can make decisions and change as the opportunities arise in different geographies. One thing I did want to ask you, Doug, is we talked about the equities markets, and the stock market, I mean, and you say you’re not interested in stocks, and neither am I, because I just think there’s too many criminals in that whole supply chain, that I call Wall Street, the modern version of organized crime. And I don’t like them, but I’m just frankly surprised at the performance of the stock market. I can’t believe with what is going on in Europe and elsewhere around the world that the stock market is actually holding its own. I mean, it’s not in real dollars, but in nominal dollars, it seems to be.
DOUG CASEY: Yes, I’m surprised too. And that’s why I don’t want any part of it, regardless of the high reported earnings of many corporations today. The only part of the stock market actually that I’m actually really interested in are the mining stocks. Because with the metals, as high as they are today, the mining stocks are actually making a lot of money. I mean, typically, let’s say the average cost of mining an ounce of gold is $600 an ounce. Gold is $1700 an ounce. These are big margins. Now, there are a lot of problems with the mining business. But those are excellent margins. And my area of specialty has always been the mining exploration stocks, which are the most volatile and most risky class of securities on the face of the planet. But, the good news about them is that they are volatile, and moves of ten or fifty or a hundred to one or more, are not unusual. And I think that with the governments continuing to create trillions more currency units, there are going to be other bubbles inflated in different parts of the economy, and I think there’s a good chance there’s going to be a bubble created not just in the precious metals, but in the companies that mine those metals. So, I think that’s something that you can look for. They’re relatively cheap right now. Something that I think people, I’d draw people’s attention to look at.
JASON HARTMAN: Yeah, and I would agree with you. The only challenge you have there other than the environmentalists making trouble for the miners and so forth, is that you have the intermediary party risk of, are you going to participate in the profits, or are you going to be subject to the crookery of the management, and so forth.
DOUG CASEY: You’re totally correct on that. That’s why I view them as a speculative vehicle. But you can be amply rewarded for taking those risks if you choose the right company. And of course, there are literally thousands of mining companies around the world. So, you have your hands full doing research on them.
JASON HARTMAN: Yeah, that’s for sure. Hey, when we talk about inflation, and really, the destruction of the dollar, and the destruction of a large part of the middle class, can you put any numbers on it? I mean, the problem is that we look at the historical situation, we look at Zimbabwe, we look at Hungary, we look at the Weimar Republic, we look at Argentina, we look at these different crises around the world that have happened historically, and some of them like Zimbabwe, of course, the poster child for inflation, but in the US, I mean, I think our inflation rate now is nearing 10% in reality. Of course it’s not the official number. Are we looking at 20% inflation annually? 100%? 15%? What do you think?
DOUG CASEY: I think it’s entirely reasonable that’s going to happen. Because, as shocking as it is, and as big a country as the US is, and as much capital wealth as exists, there’s no limit to the amount of money—or, I shouldn’t say money. I should say currency—that the US government can print up to pay its bills. And it’s gonna have to do it, or it won’t pay its bills. So, yeah. I think inflation’s going a lot higher. And this is—you’re at the 11th hour right now, to position yourself before everybody really knows it. So, yeah. Absolutely. This is something of historic importance, that we’re facing at the moment.
JASON HARTMAN: Yeah, it sure is. And that’s why I like the real estate so much. Because think about it. If you have 100% inflation in one year, that means your debt gets wiped out in a year. You have no mortgage debt. And then you do have commodities—you have all those materials, those building materials, and those usually keep pace with inflation. Now, I know what you said about nanotechnology, and technology can change that, but when they’re really low tech things like sticks and bricks and concrete, you know, I sort of wonder how disruptive nanotechnology can be, in those types of materials. Certainly in electronics, and other materials like that, no question. Huge disruptions in terms of pricing and models and so forth. But you know, that’s why I just like the real estate so much. I just don’t know what else to do. I do the metals, I recommend people do the metals, because it’s a preservation of wealth, a defensive strategy, I think, but to be offensive, you gotta have debt and commodities, and the combination of the two. And plus yield, at the same time, if you have rental yields.
DOUG CASEY: No, that’s a very good argument. My only point of disagreement is I think that—I think the market could go lower. But, maybe it is not important, because right now, interest rates are artificially suppressed by the government, and from Fannie and Freddie, which should be put out of existence.
JASON HARTMAN: Of course, they definitely should. I’d love to see them go away, because there’d be a lot more renters.
DOUG CASEY: While they’re still there, and they’re giving away money—yes, you should borrow it, and that loan will be wiped out in the future. So, yes. I think it’s a very cogent point you make.
JASON HARTMAN: It would just be so nice if you could acquire those dead assets against other things, like a business. I always say, or precious metals, even—that real estate is the most debt-favored asset. They’ll give you more debt on it at lower rates than on anything else. Unless you’re part of the Federal Reserve scam. Then you get to borrow for nothing also, and you get to borrow against nothing.
DOUG CASEY: Well, my guess is that after this crisis bottoms, and I don’t know when that’s going to be, but I would think at least three or four years from now. Then at that point, mortgage money isn’t going to exist in the US at that point. And the market in the US is going to be more like it is here in Argentina. Or, for that matter, most of South America or Africa or Asia or anywhere! Except for Europe, at this point. And that means if you want a piece of property, you pay cash for it. And that means that the prices are real. They’re not inflated by a bunch of borrowed currency units.
JASON HARTMAN: Right, right. But what surprises me is that when you have to pay cash, I mean, I was in Argentina, I was in Buenos Aires a couple years ago, and it is not inexpensive there! And there is no financing! I mean, you pay $300,000 US for a little, like a little apartment! And it’s old, and it’s, there’s no financing at all, you know?
DOUG CASEY: See, but it depends on where you look. The place I’m sitting in right now—it’s a penthouse apartment in the best part of the city. It’s a building with a 24 hour concierge, and a doorman. This apartment has decks, and verandas, and it’s 5500 square feet, 14 foot ceilings and all this type of thing, and three years ago I paid $900,000 for it. Now, if I tried to buy this apartment in New York, I promise you I would pay—
JASON HARTMAN: You’d pay $14 million for it, or something like that.
DOUG CASEY: I would say in that area at least, yes. Yeah. So, you know, you’ve gotta look for these—you’ve gotta look for these things. And so, since I bought it, this place has about doubled. But still, for what I got, $2 million is like free, by comparison with other major cities in the world.
JASON HARTMAN: So, it has doubled since you bought it 5 years ago, and mortgage financing went away. I mean, before the crisis—
DOUG CASEY: No, there’s no mortgage here. Forget about it.
JASON HARTMAN: There was some mortgage financing before the crisis, right?
DOUG CASEY: No. No, there hasn’t been mortgage financing in Argentina for years and years and years. I don’t know when the last time you could get—I mean, maybe a seller will give you financing for two years, to get the deal done. But that’s about it.
JASON HARTMAN: The last thing I want to ask you about, and this Argentina, obviously, had quite a situation with this one, is the retirement accounts. As our hungry, intrusive, overbearing spendthrift government in the US looks for money to feed its machine of handouts and vote buying, I am very much thinking that one of the places it’s going to start looking very soon is to nationalize people’s retirement accounts.
DOUG CASEY: You’re absolutely correct. That’s what they did here in Argentina. This government here is—this government here is way ahead of the US in tricks like that. In fact, it’s almost like the US is taking—is taking lessons.
JASON HARTMAN: They’re using the Argentinean playbook.
DOUG CASEY: Yes. Exactly. So, yes. I think if you have an H.R. 10, or these different kinds of pension funds you’re going to find in the US, that they’re going to say, we’re going to make it a law you have to buy half, or more, in government debt. For your own safety, of course. And it’s just a scam to finance their budget. So your pension is in great danger. Let me point something out; there are ways around this. We talk about this on our website where it’s possible still to internationalize your pension, and to buy real estate in a foreign country, and they can’t nationalize that; they can’t make you—it’s very hard to make somebody sell real estate. So, yes. But you’re quite correct. This is a huge shoe waiting to drop, for the average American that has a pension, or thinks he has a pension.
JASON HARTMAN: Yeah, no question. And the way I feel they’ll probably pull it off, Doug, is they’ll manufacture some sort of financial crisis. And not that we don’t have enough of those. But they’ll manufacture a fraud, or something, and they’ll say, well, just like Social Security, the government needs to step in to protect the people. And they’ll say, well, because too many people—of course, the left will come out with people dying, being broke in retirement, and you know, all of these types of things, which of course, they’re broke anyway, because their retirement’s been inflated away—
DOUG CASEY: Of course. Social Security is nothing but a Ponzi scheme anyway.
JASON HARTMAN: Yeah, couldn’t agree more, couldn’t agree more. Well, it’s pretty amazing. And that’s one of the reasons I think if people take and they create a self-directed plan, as did I a couple of years ago, through one of these custodians like Entrust, or any of the other companies out there that do it. A self-directed plan where they can buy real estate, or they can invest in trust deeds within that plan—that’s awfully hard to nationalize, but all of the suckers who are in the stock market, that’s just a paper transaction. That can be nationalized very, very easily. And if you’re gonna have a plan, a retirement plan like that, I say, get it as a self-directed plan, because it’ll be a lot harder for the government criminals to nationalize it.
DOUG CASEY: No, that’s right, Jason. Because of course, people, unfortunately, conflate the US government with US society. But they’re two different things. And the government has a life of its own, and interests of its own. And it looks out for itself first, and it’s got nothing to do with the average American citizen, who they treat as a milk cow. And if they have to, they’ll treat you as a beef cow.
JASON HARTMAN: Boy, that’s ugly. A milk cow versus a beef cow. I get the metaphor there, no question about it.
DOUG CASEY: Incidentally, I’ve gotta say, that’s one of the investments that I do like, and that I’ve gotten into quite a bit in recent years, is cattle ranching. Cattle is a business that nobody’s made any money on. Most places, for decades, it’s been a horrible business.
JASON HARTMAN: And you’re talking about dairy, or meat? Or beef cows?
DOUG CASEY: Especially beef. Especially beef, but I have dairy too. So what I decided to do was get into the cattle business down here, which I did about five years ago, and we’ve built our herd up to about 1600 breeding heifers at this point. We’re going to take it to 10,000 breeding heifers. And I think that one commodity that I am bullish on—that’s why I got into the business—is beef, for a lot of reasons we don’t have time to go into now, but I’d draw your listeners’ attention to that particular area. I’m not talking about speculating in commodity contracts. I’m talking about owning the land, and growing cows on it. And of course, down here, our cows are all grass fed, and we don’t put them in feedlots full of—
JASON HARTMAN: Pump them full of hormones and stuff like that.
DOUG CASEY: Steroids, and antibiotics, and horrible conditions—that’s not the way it works down here.
JASON HARTMAN: Well, it works in a much more natural way. And you know, Argentina’s famous for their beef, and it’s fantastic down there, I must say. Definitely agree with that. Well, Doug, I want you to give out your website, but I want to ask you one more thing just before you go, and I appreciate you spending so much time with us today. Your thoughts on the Occupy Wall Street movement?
DOUG CASEY: You know, it’s very interesting. They have a very justifiable beef, because there’s so much criminality in the stock market, and in Wall Street at this point. Wall Street’s about 10 times larger than it serves any useful purpose for being, and this is largely because of the government and so forth. And executives in businesses that they didn’t found, are essentially ripping them off with gigantic salaries and bonuses and stock options.
JASON HARTMAN: It’s disgusting.
DOUG CASEY: Yeah. Because they can. So, these people are justifiably angry. I understand that. On the other hand, they’re rather inchoate in their rage, and their solutions seem to be exactly the wrong thing. The idea is to make the government smaller, which will collapse all these parasites on Wall Street, as opposed to try to regulate them even more, and tax them even more, which is what these people seem to want. So, you know, I understand the point of their rage, but they’re counterproductive.
JASON HARTMAN: Yeah, they just don’t get it. And you know, one of the things that the rage is about, is so many of these just total Wall Street scams, and I noticed that on CaseyResearch.com, you’ve got an article about MF Global. Any thoughts on that, before you go?
DOUG CASEY: Yeah, this was a shocking thing to me. I can’t wait until the truth comes out on this. This is really almost unprecedented, that a commodity firm went down and took all of its customers with it. We haven’t heard the end of this, and this is really shocking. It means that you really can’t trust any financial institution with your money today. That’s really what it means. So, we’re in for stormy weather. We’re just barely going into the storm now.
JASON HARTMAN: Very good point, very good point. And one of the things I have thought for a few years now is that the Comex exchange is a Ponzi scheme, potentially. Who knows if there’s any real metals behind that, with all these ETFs, and hedge funds—it’s just crazy! It’s probably all fiat money.
DOUG CASEY: No, you’re right. This is corruption, just rules the day, throughout the financial markets. So, the wisest thing you can do it have some gold and silver in your own possession, and own some real estate. Good idea. Diversify internationally. But corruption is rampant everywhere.
JASON HARTMAN: It sure is. And take on a lot of debt. That’s the other thing you didn’t mention. But have a lot of long term fixed rate debt.
DOUG CASEY: But make sure it’s long term fixed interest rate debt, which I’m sure you would have mentioned.
JASON HARTMAN: Couldn’t agree more. Well Doug, thank you so much for joining us today. www.caseyresearch.com is your website; did you want to give out any others, tell people where they can get your books, or anything?
DOUG CASEY: No, if people go to www.caseyresearch.com, we have free blogs, and all kinds of stuff that I think they’ll find of interest. And Jason, I want to thank you. This has been most pleasant, talking with you.
JASON HARTMAN: Well, likewise. And thank you so much for joining us, and you have a great holiday.
DOUG CASEY: Thanks. You too.
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Transcribed by David
The Jason Hartman Team
Episode: CW 231: Forecasting America’s Economic Future with Doug Casey of Casey Research
Guest: Doug Casey
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