Doug Casey: I’ve always been a hard-money person, a gold bug. Gold is money in its most basic form. Only a fool trusts a government with money, especially when the writing on the wall is so clear.
by Doug Casey
International Man: According to a recent Newsweek poll, 63% of Americans “strongly support” new government stimulus checks to combat inflation.
In other words, let’s fight the effects of money printing by doing even more money printing.
What’s your take on this?
Doug Casey: The nature of the US has been transformed. Americans have come to see the government as a cornucopia that can kiss everything and make it better—especially since the bailouts of the Biden Administration.
That attitude has become a cultural value and very hard to change. “Panem et circenses,” as the Romans said, has become necessary for both the government and its subjects. Remember that the prime directive of any entity—whether it’s an amoeba, an individual, a corporation, or a government—is to survive. The present government can’t survive without supporting more than half the population, which has become parasites. But the government itself is the biggest parasite of all. Can parasites live on each other forever? No. To use an overly fashionable word, it’s “unsustainable.”
Where will the US government get the money it needs to survive? It can no longer even remotely survive on its tax receipts; deficits of one to two trillion per year lie ahead for the indefinite future. It can no longer borrow adequate amounts from either American citizens or foreign governments—just rolling over the $32 trillion of existing debt, forget about trillions of new debt, at anything near current interest rates is hard enough. So there’s no alternative left for them but to print more money. And print they will (electronically, of course). The thousands of “economists” at the Federal Reserve and the Treasury Department have no more of a grip on sound economics than government economists in Argentina or Zimbabwe.
Disaster is absolutely written into the government’s DNA at this point. There’s no realistic way out.
International Man: As many Americans are now realizing, inflation has a way of perpetuating itself. However, many countries have been down this path before.
For example, Argentina has infamously been trapped in a perpetual cycle of hyperinflation and socialism from which it cannot escape.
Is the US now entering that same inescapable cycle?
Doug Casey: Money printing makes you think that you’re getting something for nothing. It’s dishonest, criminal actually, and leads to a moral collapse. It causes a war of all against all, as everyone in the country attempts to get his share of government money—which is to say, stolen money—before the next guy. It’s hard to see how you break the cycle short of defaulting on the national debt, cutting government spending very radically, disengaging from foreign wars, eliminating regulations wholesale, and replacing paper with gold as the national currency, among other things.
If those things happened, the economy would boom after a short albeit extremely deep adjustment. But the chances of all that happening are about zero. What we’ll likely get is a long-lasting and dismal depression overlaid with a police state and general chaos.
The US became the world’s freest and most prosperous country because it was a middle-class society. Middle-class people tend to be conservative, self-sufficient, and family-oriented. They’re future-oriented workers and savers. The problem is that the US middle class is being squeezed, as Lenin predicted, between the millstones of taxation and inflation. They’re being wiped out.
What’s left are the upper and lower classes. Very wealthy politically-connected types live in enclaves far above the plebs, viewing themselves as masters of the universe. These wannabe globalists essentially despise American values and traditions. Meanwhile, the lower classes basically live hand to mouth, assisted by numerous types of welfare. They think they can vote for a living. For that reason, I expect a Guaranteed Annual Income to be a major theme in the ’24 elections. “Something for nothing” will become official policy.
International Man: Historically, the government has fought the effects of excessive money printing by raising interest rates.
Today, however, the government’s debt load is much higher than in the past.
If interest rates were to rise to the level needed to combat today’s rising prices, it could bankrupt the US government—and everyone else.
What is going on here?
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