01/17/14 – Doug Casey – The Scott Horton Show

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All right, y'all, welcome back to the show.
I'm Scott Horton, this is my show, The Scott Horton Show.
And next up is Doug Casey, zillionaire, anarchist, investor, author, keeper of the website InternationalMan.com.
Doug Casey's International Man is the site.
Welcome back to the show.
How are you doing, Doug?
It's been years and years, actually.
Hello.
Great, Scott.
It's nice to talk to you.
I'm currently, as you know, in Punta del Este, Uruguay, so we have a pretty clear connection nonetheless.
Yeah, well, you must be at a high elevation, because we seem to have a clear line of sight to you there.
All right, well, good.
So I appreciate you joining us.
Actually, I'm not.
I'm at the beach.
Uruguay is a quiet, backward little country.
And what happens is people from Argentina, mainly, and I mainly live in Argentina, come over here for the summer season to go to the beach, and that's what I'm doing here.
I see.
Well, nothing wrong with that, certainly couldn't complain.
All right, well, so I'm very happy to have you on the show.
From time to time, people say, Ben, you ought to get Doug Casey on.
And I always agree with them, but then, for some reason, I hadn't gotten around to it in a while.
So it'd be good to pick your brain a little bit about what's going on.
First of all, well, we just had this conversation with this reporter about the civil war in Syria, where America's clearly been taking the Saudi-Sunni side against the Iranian-Shiite axis or whatever.
But on the other hand, we have the possibility, it looks like, of a real warming and opening up of America's relationship with Iran, and by that I mean the main outstanding issue is this bogus controversy over their nuclear program, which Obama seems to be trying pretty hard to negotiate an end to.
And then I wonder whether you think that that could be the star, whether you anticipate, you know, maybe something positive in the Middle East for a change, and an end of the American-Iranian Cold War.
What do you think about that?
Well, I always hope for the best, but unfortunately, it's the nature of the state, it's the nature of government to get into conflicts and wars.
I mean, these things have been going on for 5,000 years of recorded history, so that especially when things get tough domestically, the government looks for somebody else to blame, some foreigner, to unite the people.
So I'd say the odds of things getting better with Iran are low, actually.
All we really know is what we read in the paper and hear on the news.
And I really read the paper for entertainment, not for information.
The main thing that the U.S. has going for at this point is a gigantic military.
And when all you have is a gold-plated hammer, which is what I equate the military to, everything starts looking like a nail.
So the chances are good they're going to use it.
So I'm hoping for the best, but I'm not expecting the best.
Yeah, well, that's what I thought you were saying.
I pretty much feel the same way, but I don't know, I was looking at the fight in the Senate where the president seemed to really be leaning on the congressman for a change, which he doesn't usually do that on anything, and he seemed to really be telling them to back off these sanctions and let him do his thing without screwing it up.
And it seemed to have worked.
And so I don't know if that means he really wants to get the final deal done, but at least it means he doesn't want them screwing it up right now, and that's kind of something.
Well, you know, my view on that is that the U.S. government is sticking its nose into absolutely everybody's business, everybody else's business.
We've got combat troops in a hundred countries around the world, and the natives don't appreciate it.
So if Obama or any other president wanted to do something for the good of the American people, he'd withdraw all of the military personnel that the U.S. has all around the world.
Not only would it keep us out of trouble and make us less enemies, but it would forestall the impending bankruptcy of the U.S. government, because the security establishment and the military probably cost about a trillion dollars per year, and we get very, very little return on that malinvestment.
Well, but, you know, I guess it is the war party, but others repeat it, too, like they believe it, that, you know, all this militarism, yeah, it's big, but as a percentage of GDP, it's really not that big of a deal, not when you compare it to Medicaid or Medicare or Social Security or whatever it is.
And so don't worry about it, really, you know, like Bill Kristol would say.
Get over it.
Let's have some more wars.
Well, he's a complete fool, of course, and it's true, in a perhaps a $16 trillion economy, a trillion dollars of pure waste doesn't look that bad.
But my view is that not only should the military be cut down probably about 90 percent, because of course the U.S. spends as much on its military and security, so-called, as every other country in the world put together does, but Medicaid and Medicare should be abolished.
And I've got to say that that should happen to Social Security, too, although unfortunately there are now tens of millions of people that have been defrauded into relying on it.
So I don't know how you handle that program.
I guess the next generation is just going to have to be turned into a limited serf to pay for that obligation, but very little that the U.S. government does these days serves a useful purpose.
Yeah.
Well, that was the Ron Paul tradeoff in his presidential campaign, right, was even though he is a hardcore libertarian, how about we just abolish the empire completely and then we use those savings to shore up Social Security for the people who desperately need it?
That seems like a pretty fair compromise, right?
Well, I suppose under the circumstances, you have to do something because you've got tens of millions of people that have been induced, fraudulently, to rely on this giant Ponzi scheme called Social Security.
So the U.S. government's gotten itself, it's just one more pickle that the U.S. government's gotten itself into.
So I suppose, but there's so much more that needs to be done to slow the descent of the empire at this point.
I mean, the U.S. dollar is in a state of collapse.
It's rotten to the core.
All of the regulations and so forth that the U.S. government has and puts on more every day is faultifying economic growth.
It's very problematical.
I question whether things could be turned around even if Ron Paul had been elected.
I don't think it would have gotten us anywhere because I suspect the first thing that would have happened was that he would have been that he would have been visited by the heads of all of our praetorian agencies like the NSA and the CIA and the FBI and the rest of them.
And of course, a bunch of generals and admirals.
And he would have had a severe talking to telling him that he simply can't change these things when these guys have all the guns.
And even then, the Congress would have impeached him.
And if that hadn't worked, the average American would have turned out into the streets to riot because he thinks that the government is a magic cornucopia.
So I actually think that the situation is beyond redemption at this point.
Yeah, well, and you seem to be saying that the empire is coming down one way or the other at this point, too.
It doesn't how much longer can it last if we don't roll it back deliberately, do you think?
Well, look, you're fighting against the second law of thermodynamics and what that holds is that entropy overcomes everything.
All systems wind down.
And that's what's happening politically as well.
The larger and the more complex a structure becomes, the more energy input it takes to maintain it.
And that's really where we are with the U.S. government at this point.
I don't I don't see them taking it apart slowly.
I think what we're going to have to wait for is for it all to collapse at once.
We'll be right back, everybody, with more with Doug Casey from the international man dot com after this.
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All right, y'all, welcome back to the show.
I'm Scott Horton.
This is my show, The Scott Horton Show.
We're on the Liberty Express.
And Scott Horton dot org, and we're talking with Doug Casey, zillionaire, anarchist, investor, author, writer, world traveler, and we're talking about the bankruptcy of the empire.
And you know what?
Let me ask you, Doug, because as an economist, I'm basically good at foreign policy, you know, armchair economist at best.
I like good economists, but I don't really read their books.
But so what I do know is my whole life, I've been hearing that there's way too much national debt in the Reagan years, that Reagan and the Democrats, they left us with a four trillion dollar debt.
The collapse of our society is imminent.
And I've heard that this whole time.
And I wonder whether, hey, aren't these guys the the brilliant scientists they claim to be?
And and yeah, we've had some pretty severe corrections from time to time.
But it doesn't seem like the dollar itself is falling apart.
And can't they just keep printing money forever or what?
It seems like they can.
Well, that's a very good question, Scott.
As far as the debt is concerned, let's let's take a look at the concept of debt.
When you have debt.
It means that you're you're taking earnings from the future and mortgaging them so you can spend them now or you're borrowing capital that others have saved in the past and using it now.
So debt is a sign that you're living above your means, at least consumer debt.
And most of the debt we have is for consumption as opposed to use to create new wealth.
Savings, on the other hand, means that you've been producing, producing more than you you're consuming.
And that difference is savings.
Now, it's really very simple.
Savings is good.
Debt is bad.
And there's no way around that.
I don't think there's any arguing with it because debt shows that you've been consuming more than you've been producing.
The problem is this, is that the productive people in the U.S. and the world are basically saving in currency.
They're saving in dollars.
But unfortunately, the dollar is a floating abstraction.
It's not backed by anything.
It doesn't represent anything.
It's basically an IOU nothing on the part of the U.S. government, which itself is bankrupt.
So the real problem that we have is that the savers.
Who are the ones that are producing more than they're consuming are exactly the ones that are going to be penalized in the future because they're saving in dollars.
So what's going to happen to the value of the dollar?
It's going to reach its intrinsic value, which is essentially nothing.
So we're looking at a real financial and economic and also social catastrophe from a number of points of view.
All right, so at one point, are you talking about there will be a crack up boom or just everyone realizes that the dollar is just as fake as you realize it is and no one will expect that they'll be able to trade with them tomorrow and that'll just be the end of that on, you know, Black Tuesday coming up one day or how's that work?
Well, it's it's hard to predict exactly what's going to happen.
But right now, the U.S. government through the Fed buying debt in the market is creating about 80 billion new dollars every month.
This is a huge amount of paper.
Now, most of us just sitting in the banks right now, most of it isn't going out into society to bid for goods and services.
Some of it is and prices are rising gradually across the board.
But will we have a crack up boom?
Well, if all that money exits from the institutions where it's sitting and goes out and starts buying stuff, yeah, it could be a phony boom, the kind of thing that happened in Germany in 1922.
But there's actually even more to it than that.
And it's worse than that because the main export of the U.S. for a couple of decades has been dollars.
And right now there are we don't know exactly, but there's probably about a trillion U.S. dollars that are outside the U.S.
And unlike Americans who have to use dollars by law to settle accounts, foreigners don't have to.
They only use dollars because they're liquid and convenient.
And at some point when the dollar, which rests on nothing other than confidence, when that confidence goes away, the foreigners are going to dump their dollars.
And at that point, they're all going to come back to the U.S.
Inflation has been relatively low in the U.S. because we've been exporting those dollars abroad and importing Mercedes and Sony's and stuff like that.
So we've had less purchasing media and more goods.
But at some point when the confidence vanishes on the part of foreigners, the dollars are going to come back and the titles to land and companies and real goods are going to go out of the U.S.
So that could be rather catastrophic.
All right.
But now all the Democrats in D.C. say that, no, because they're experts and they know what they're doing.
And so and that you you're you're looking at it.
It sounds perhaps like you're oversimplifying it.
And in truth, no, we can keep making the Chinese make stuff for us for real cheap and we don't have to work.
And it's it's all, you know, you call it debt that will be, you know, saddled on the backs of coming generations.
They call it a bookkeeping trick.
That means that they can get away with it.
It has nothing to do with the saddling anybody with anything.
Don't worry about it, they say.
Yeah, no, that's true.
I guess you really can get a free lunch.
You really can get something for nothing in the world.
At least that's been the case so far.
But it's very problematical what's happening here in the U.S.
I mean, governments, just the institution of government, it's coercive, it's stupid.
And essentially, although I know most people don't see it this way, it really serves no useful purpose.
There's nothing that the government can make that the market would not and could not and should not make.
But the big problem is that the whole world relies on the U.S. and its currency.
The whole world owns the debt of the U.S. government, although the Federal Reserve here in the U.S. owns more and more of it.
So when things blow up here in the U.S., it's much more serious than when things blow up in Argentina or Zimbabwe or France, which is the next place in Europe.
I think we're going to have a crisis.
But it's not just in the U.S., there are other big economies.
I mean, the Japanese economy is a gigantic accident waiting to happen at this point.
The same is true of China.
They're inflating their yuan even faster than we're inflating the dollar.
I wouldn't touch a yuan at this point.
And in Europe, in another couple of generations, the Europeans are mainly going to be a source of housepoisoning for the Chinese after the Chinese recover from the financial catastrophe that they're facing.
In other words, we're going through a real period of turmoil, I think, over the next decade.
And I don't know exactly how it's going to come out.
But it's going to be most interesting to watch it unfold.
All right, now, real quick, I've got this theory that Ron Paul finally got through to Ben Bernanke a little bit after all those years of Hector and him, and that he did, he came up with, and you named the scam earlier, where he creates all this new money to make all the banks whole on all their bad bets.
But then he pays them to keep the money at the Fed and not loan it out.
And after all, the economy sucks.
So there's no good bets out there in the economy to loan the money out for.
So the fractional reserve rate is not kicking in and that widespread inflation is not kicking in.
So wouldn't we have to have a real recovery of some kind for to to set the domino, to knock the dominoes over and cause that terrible inflation that you're fearing?
And hadn't Bernanke sort of headed that off by making sure that we all stay unemployed and that all the pressure on prices stays low for that reason?
Well, you may be giving him more credit for understanding something about the economy that he deserves.
I give Bernanke credit for being extremely lucky because he's gone from being an academic, a college professor, to having been one of the most powerful men in the world.
And now he's escaped before the collapse.
So he's going to get his personal payoff, which is probably going to be about 50 million dollars in book contracts, corporate directorship, consulting fees, speaking engagements.
So then Bernanke is going to be just fine for the rest of his life.
I pity that poor fool, Janet Yellen, who's picked up from him.
But no, it's going to be tough times any way that you cut it.
I really don't see any way out of it.
Put it this way, Scott, if we entered a gigantic financial hurricane in 2007.
And we went through the leading edge of it in 2008 and 2009.
Now, for the last few years, we've been in the eye of the storm, a big eye, because it's a big storm.
But I think this year we're going to go out to the trailing edge of the hurricane and it's going to be much more severe and much longer lasting than the leading edge that we experienced in 2008 and 2009.
Here's scary as a local cop, make me want to flee, pack up my meager possessions and flee to Uruguay.
I think there's a lot of people in the audience saying me too, man, right now.
Well, this is a quiet and backward, but peaceful little country.
I usually prefer to be across the Plate River in Argentina, which is a lot more fun.
But it's summertime down here.
So I'm doing what most of the Argentines who are in a position to do so can do.
All right.
Well, it's great to talk to you again.
I sure appreciate you joining us on the show today, Doug.
OK, talk to you later.
All right.
Everybody, that is Doug Casey.
Zillionaire, anarchist, author and inventor and prognosticator and very interesting man, internationalman.com.
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