There are many signs of an economic collapse. The United States controls the world’s currency supply, but that’s a situation that won’t last forever as our government continues to grow beyond control and eventually destroys the dollar. Once the dollar’s gone, panic will ensue, and we may well see a depression of unprecedented proportions.
Sounding that alarm this past week was financial writer Doug Casey, who’s the best-selling author of such works as “The International Man” and “Crisis Investing,” when he appeared as a guest on the “Creating Wealth” podcast show.
Casey discussed what he sees as America’s signs of an economic collapse with real estate investing expert Jason Hartman, the host of “Creating Wealth,” as the pair sat down to chat in Aspen, Colorado. In what was the first part of a two-part show, the men, in addition to discussing the dollar’s demise, offered a bit of commentary about Aspen itself, which they both admittedly adore but say strongly emits a “NIMBY”—as in “not in my back yard”—sort of attitude.
Read on for more of what you as a real estate investor will learn from listening to this latest “Creating Wealth” show produced by Hartman and his Platinum Properties Investors Network.
Meet Doug Casey, “The International Man”
Before authoring his best-selling books and a popular longtime newsletter, and then founding Casey Research, with which he’s still involved, Casey always has believed “that you don’t want to live like a medieval peasant where you’re born in one place, you grow up there, and then you die there.”
Rather, “I think it’s incumbent upon any free individual to make the world his oyster.”
As a result, he has been to 155 countries over the course of his life and career and has lived in 10 of them. He currently spends a few months each year in Aspen and divides the rest of his time in Argentina and Uruguay, having also lived in such places as the Orient and Europe. “I just wish that there was one place on this planet that was a truly free country, perhaps some day.”
Casey, in essence, agrees with Hartman that the United States has gotten too big for its britches because of the growth of its government, a possible sign of an economic collapse.
“It’s a universal law that all entities—whether amoeba, an individual, a company, or government—want to survive and grow, and you survive by growing,” Casey says.
“The problem with government is that, since it’s a coercive institution, it’s the only institution that can hold a gun to your head legally, so it has a tendency to grow much faster than other things in society. It’s cancerous by its nature, and government inevitably draws the wrong kind of people working for it. Not the best and the brightest people, but people that want to control other people.”
Casey’s first book in 1976 was “The International Man,” which he calls a “guidebook to how to make the most of your personal freedom and financial opportunity around the world.” It was followed a couple of years later by The New York Times’ best-selling “Crisis Investing.”
But now, Casey says, “I find there are things you can say in fiction, things you can say in novels, that you’d really better not say in non-fiction, so I’ve embarked on writing a series of seven novels.”
The first novel was “Speculator,” published last year, in which “I’m reforming the unjustly besmirched representatives of highly politically incorrect occupations.”
“So, our hero in ‘Speculator’ is a 23-year-old guy who goes to Africa, gets involved in a gold-mining fraud not his fault, gets involved in a bush war, makes $200 million and has it stolen from him by the government.”
The second book in the Casey series, the recently released “Drug Lord” (which, like “Speculator” is co-written with John Hunt), talks about getting into the drug business, both legal and illegal, how to do it, what happens and what it’s like dealing with various government agencies, “so I think people like both of those books.”
Casey Has Watched an Economic Hurricane, Doesn’t Like What He Sees
Asked by Hartman what economic misfortunes he might see ahead for the world, Casey says he likes to preface any comments about the economy by noting that most of what he reads and thinks about is history and science. Thus, he thinks western civilization itself peaked in 1913, just before World War I, “and it’s been going down since then.”
“The United States,” he continues, “as a country within western civilization, peaked in the mid-1950s when all of the world’s skyscrapers, 75 percent of the world’s cars, airplanes, everything happened in the U.S. then.”
“That was our peak, and we’ve been going down in absolute terms since the 1970s when Nixon devalued the dollar. It used to be that America was something special and different from any other country in the world, but now, the United States, which is different from America, is just another of 200 countries in the world, so this is the general context I’m talking about.”
It’s Casey’s view that we started riding “a gigantic hurricane” economically in 2007 and that we went through the leading edge of that hurricane with the real estate and stock market crashes of 2008 and 2009.
“The government has created trillions and trillions, not just the United States government, but all of the governments in the world—Chinese, European, Japanese and all the little governments—have created trillions and trillions of currency units to pour oil in the water” of the hurricane, Casey says.
“I think now, as we speak, we’re riding the trailing edge of the hurricane, and it’s going to be much worse, much longer lasting and much different than what happened in ‘08 and ‘09, which was unpleasant, as you recall.”
Hartman asks Casey to expound on the earlier remark that “the United States, which is different from America, is just another of 200 countries in the world.”
“America was exceptional,” Casey says, “and it was actually unique, because it was the only country in the world’s history that was founded upon the principles of individualism, freedom of speech, freedom of movement, free markets. America was a totally unique concept.”
But, “We’ve drifted away from that. And now, what the ‘United States’ has devolved into is really just a political entity, and no longer a very stable one, either. I’m very loyal to the concept of America, not so loyal to the concept of the United States.”
What the country has devolved into is “something of an empire, quite frankly,” Casey adds. “Not an empire like the Roman empire or the British empire; actually, historically, it’s more like the Athenian empire. We don’t actually go out and conquer countries so much, although we have combat troops in 100 different countries around the world.”
The United States is an empire in the sense that it controls the world’s currency system, Casey says.
“The U.S. dollar is the numeracy for all other currencies in the world. Every other country in the world has a central bank, like the Federal Reserve here in the United States, and the major assets of most of these central banks are U.S. dollars.”
The major exports of the United States are not wheat or Boeings, Casey says.
“We don’t produce any of that stuff in quantity anymore. And that’s why we run gigantic trade deficits with the rest of the world now. Our major export is dollars. We send those dollars abroad, and those nice foreigners send us Mercedes and Sonys and cocaine, and all of these other things.”
“In other words,” Hartman asks, “we export the paper (money) or credit and we get the real hard assets back, the Mercedes, the BMWs, the Audis, Walmart from China—we get real stuff for our fake stuff, that’s a pretty good deal, isn’t it?”
“Precisely,” Casey replies, “but it can’t go on forever, because there are tons of trillions of U.S. dollars outside the United States. They’re the assets of foreign central banks. In 50 countries around the world the dollar is used more than their own currency. But you keep doing this, and the dollar is going to start losing value radically.”
This Economic Hurricane Will Leave Panic in Its Wake
“Foreigners don’t have to accept U.S. dollars the way U.S. citizens do,” Casey notes.
“So, at some point, there’s going to be a panic out of dollars, and what’s going to happen? Those dollars are going to come back to the United States, and they’re going to buy all kinds of American assets, so we’re going to get our own paper back, and inflation’s going to explode within the United States.”
Who’ll be panicking, Hartman asks: Governments, central banks, foreign countries or foreigners in general?
“You’re going to have panic right here in the United States,” Casey says. Statistics show that about half of the U.S. population has no net assets “and what’s left of the middle class are basically saving dollars.”
“In other words, what everybody tries to do, we’re genetically like squirrels. We know we have to produce more than we consume and save the difference, because winter’s coming, eventually. The problem is the average American only saves dollars, but if the U.S. government destroys the dollar, it means the assets of the average American and the capital they saved vanishes—poof, up in smoke—so, it’s very, very serious.”
As such capital “dies and goes to heaven,” Casey adds, “the remaining dollars become worth relatively more so you could have a deflation, like what happened in 1929, where there’s a stock market crash, a bond market crash, a real estate market crash. And that’s a deflation, not the same thing as a depression.”
“Or, if the government keeps printing up more and more and more money to allow people to service the debt, then eventually the dollar loses all value and that’s even worse than a deflation.”
“Either way, we’re headed for a depression, a period of time when most people’s standard of living drops dramatically.”
Welcome to Aspen: Home of ‘NIMBY’ and ‘Environmental Racism’
Before Hartman and Casey debated signs of an economic collapse and the current state of economic affairs, they got in a few digs about the very place from which the “Creating Wealth” podcast with Casey was produced: Aspen, Colorado.
Both men admittedly admire Aspen.
Casey, as noted earlier, lives in the Rockies a few months out of the year, and Hartman had just visited “this beautiful place” for several days, attending its annual popular jazz festival where two non-jazz artists he likes, Keith Urban and Maroon 5, had performed.
However, Hartman also calls Aspen “that liberal bastion in the mountains,” and Casey dubs it “the people’s republic of Aspen.”
When producing a previous podcast there, Hartman coined yet another phrase as a result of the popular ski resort: “environmental racism.”
“The concept is the same as the ‘NIMBY’ concept—‘not in my back yard,’” Hartman says in his latest podcast from the mountains.
“Aspen is the poster child for this, if you ask me. Irvine, California and Orange County, where I’m from, are kind of a poster child for it, too, where, as soon as people with money get into a community, they try to create all kinds of restrictions on building, under the guise of protecting the environment. Which is part of it, but not ‘the thing,’ which is ‘we got ours, let’s not let anybody else in.’”
“I think that’s especially true here in Aspen,” Casey says, “because this has always been a town where the wealthy people have been drawn to, but now the billionaires are driving all of the millionaires out of town, or the valley. In Aspen proper, you’ve only got people who live in the so-called ‘employee housing,’ or welfare housing subsidized by the city.”
Hartman says there are 3,000 employee housing units in Aspen, which Casey finds “shocking, because Aspen itself only has 7,000 residents, so half of them are people who are living off the tax revenues of rich people there.”
Casey has observed that there’s also “an active environment of class warfare where the people living in welfare housing, so-called ‘employee housing,’ want more, and they’re the ones who do all of the voting because the rich guys just generally have second homes there.”
“Yeah, it’s an interesting concept,” Hartman says.
“It’s always under the idea of ‘let’s protect the environment’ where the general, left-wing, liberal idea is ‘shouldn’t we be more inclusive,’ ‘shouldn’t we let everybody in,’ ‘shouldn’t we give people more stuff’ and ‘shouldn’t we have more diversity.’ That’s what they say till it comes to their own neighborhood.”
He adds, with a laugh: “Aspen’s like the most lily-white place I’ve been in my entire life.”