[Rushtalk] Doug Casey on How Fascism Comes to America
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Wed May 20 14:49:28 MDT 2020
Doug Casey on How Fascism Comes to America
By Doug Casey May 8, 2020 Print
Editor’s note: If you’ve been following along in the Dispatch, you know
our founder, Doug Casey, believes that the U.S. is well on its way to
becoming a police state. And with the recent coronavirus scare
triggering more economic uncertainty, plenty of Americans fear this is
an opportunity for the government to seize more control of our lives.
So today, Doug digs into some of the factors that caused the government
to become more aggressive… and the actions you can take to protect your
money – and your freedom.
By Doug Casey, founder, Casey Research
Doug CaseyI think there are really only two good reasons for having a
significant amount of money: To maintain a high standard of living and
to ensure your personal freedom. There are other, lesser reasons, of
course, including: to prove you can do it, to compensate for failings in
other things, to impress others, to leave a legacy, to help perpetuate
your genes, or maybe because you just can’t think of something better to
do with your time.
But I’ll put aside those lesser motives, which I tend to view as
psychological foibles. Basically, money gives you the freedom to do what
you’d like – and when, how, and with whom you prefer to do it. Money
allows you to have things and do things and can even assist you to be
something you want to be. Unfortunately, money is a chimera in today’s
world and will wind up savaging billions in the years to come.
As you know, I believe we’re well into what I call The Greater
Depression. A lot of people believe we’re in a recovery now; I think,
from a long-term point of view, that is total nonsense. We’re just in
the eye of the hurricane and will soon be moving into the other side of
the storm. But it will be far more severe than what we saw in 2008 and
2009 and will last quite a while – perhaps for many years, depending on
how stupidly the government acts.
Real Reasons for Optimism
There are reasons for optimism, of course, and at least two of them make
The first is that every individual wants to improve his economic status.
Many (but by no means all) of them will intuit that the surest way to do
so is to produce more than they consume and save the difference. That
creates capital, which can be invested in or loaned to productive
enterprises. But what if outside forces make that impossible, or at
least much harder than it should be?
The second reason for optimism is the development of technology – which
is the ability to manipulate the material world to suit our desires.
Scientists and engineers develop technology, and that also adds to the
supply of capital. The more complex technology becomes, the more outside
capital is required. But what if sufficient capital isn’t generated by
individuals and businesses to fund further technological advances?
There are no guarantees in life. Throughout the first several hundred
thousand years of human existence, very little capital was accumulated –
perhaps a few skins or arrowheads passed on to the next generation. And
there was very little improvement in technology – it was many millennia
between the taming of fire and, say, the invention of the bow.
Things very gradually accelerated and improved, in a start-stop-start
kind of way – the classical world, followed by the Dark Ages, followed
by the medieval world. Finally, as we entered the industrial world 200
years ago, it looked like we were on an accelerating path to the stars.
All of a sudden, life was no longer necessarily so solitary, poor,
nasty, brutish, or short.
I’m reasonably confident things will continue improving, possibly at an
accelerating rate. But only if individuals create more capital than they
consume and if enough of that capital is directed towards productive
Real Reasons for Pessimism
Those are the two mainsprings of human progress: capital accumulation
and technology. Unfortunately, however, that reality has become obscured
by a morass of false and destructive theories, abetted by a world that’s
become so complex that it’s too difficult for most people to sort out
cause and effect.
Furthermore, most people in the OECD world have become so accustomed to
good times, since the end of WW2, that they think prosperity is
automatic and a permanent feature of the cosmic firmament. So although
I’m very optimistic, progress – certainly over the near term – isn’t
These are the main reasons why the standard of living has been
artificially high in the advanced world, but don’t confuse them with the
two reasons for long-term prosperity.
The first is debt. There’s nothing wrong with debt in itself; lending is
one way for the owner of capital to deploy it. But if a society is going
to advance, debt should be largely for productive purposes, so that it’s
self-liquidating; and most of it would necessarily be short term.
But most of the scores of trillions of debt in the world today are for
consumption, not production. And the debt is not only not
self-liquidating, it’s compounding. And most of it is long term, with no
relation to any specific asset. A lender can reasonably predict the
value of a short-term loan, but debt payable in 30 years is impossible
to value realistically.
All government debt, mortgage debt, consumer debt, and almost all
student loan debt does nothing but allow borrowers to live off the
capital others have accumulated. It turns the debtors into indentured
servants for the indefinite future. The entire world has basically
overlooked this, along with most other tenets of sound economics.
The second is inflation. Like debt, inflation induces people to live
above their means, but its consequences are even worse, because they’re
indirect and delayed.
If the central bank deposited $10,000 in everyone’s bank account next
Monday, everyone would think they were wealthier and start consuming
more. This would start a business cycle. The business cycle is always
the result of currency inflation, no matter how subtle or mild. And it
always results in a depression. The longer an inflation goes on, the
more ingrained the distortions and misallocations of capital become, and
the worse the resulting depression.
We’ve had a number of inflationary cycles since the end of the last
depression in 1948. I believe we’re now at the end of what might be
called a super-cycle, resulting in a super-depression.
The third is the export of dollars. This is unique to the U.S. and is
the reason the depression in the U.S. will in some ways be worse than
most other places.
Since the early ’70s, the dollar has been used the way gold once was –
it’s the world’s currency. The problem is that the U.S. has exported
perhaps $10 trillion – but nobody knows – in exchange for good things
from around the world. It was a great trade for a while. The foreigners
get paper created at essentially zero cost, while Americans live high on
the hog with the goodies those dollars buy.
But at some point quite soon, dollars won’t be readily accepted, and
smart foreigners will start dumping their dollars, passing the Old Maid
card. Ultimately, most of the dollars will come back to the U.S., to be
traded for titles to land and businesses. Americans will find that they
traded their birthright for a storage unit full of TVs and assorted
tchotchkes. But many foreigners will also be stuck with dollars and
suffer a huge loss. It’s actually a game with no winner.
These last three factors have enabled essentially the whole world to
live above its means for decades. The process has been actively
facilitated by governments everywhere. People like living above their
means, and governments prefer to see the masses sated.
The debt and inflation have also financed the growth of the welfare
state, making a large percentage of the masses dependent, even while
they’ve also resulted in an immense expansion in the size and power of
the state over the last 60-odd years.
The masses have come to think government is a magical entity that can do
almost anything, including kiss the economy and make it better when the
going gets tough. The type of people who are drawn to the government are
eager to make the state a panacea. So they’ll redouble their efforts in
the fiscal and monetary areas I’ve described above, albeit with
increasingly disastrous results.
They’ll also become quite aggressive with regulations (on what you can
do and say, and where your money can go) and taxes (much higher existing
taxes and lots of new ones, like a national value-added tax and a wealth
tax). And since nobody wants to take the blame for problems, they’ll
blame things on foreigners. Fortunately (the U.S. will think) they have
a huge military and will employ it promiscuously. So the already
bankrupt nations of NATO will dig the hole deeper with some serious –
but distracting – new wars.
It’s most unfortunate, but the U.S. and its allies will turn into
authoritarian police states. Even more than they are today. Much more,
actually. They’ll all be perfectly fascist – private ownership of both
consumer goods and the means of production topped by state control of
both. Fascism operates free of underlying principles or philosophy; it’s
totally the whim of the people in control, and they’ll prove ever more
So where does that leave us, as far as accumulating more wealth than the
average guy is concerned? I’d say it puts us in a rather troubling
The general standard of living is going to collapse, as will your
personal freedom. And if you’re an upper-middle-class person (I suspect
that includes most who are now reading this), you will be considered
among the rich who are somehow (this is actually a complex subject
worthy of discussion) responsible for the bad times and therefore liable
to be eaten. The bottom line is that if you value your money and your
freedom, you’ll take action.
There’s much, much more to be said on all this. I’ve said a lot on the
topic over the past few years, at some length. But I thought it best to
be brief here, for the purpose of emphasis. Essentially, act now,
because the world’s combined economic, financial, political, social, and
military situation is as good as it will be for many years… and a lot
better than it has any right to be.
What to Do?
No new advice here, at least as far as veteran readers are concerned.
But my suspicion is that very few of you have acted, even if you
understand why you should act. Peer pressure (I’m confident that you
have few, if any, friends, relatives, or associates who think along
these lines) and inertia are powerful forces.
That said, you should do the following:
1. Maintain significant bank and brokerage accounts outside your
home country. Consider setting up an offshore asset protection
trust. These things aren’t as easy to do as they used to be. But
they’ll likely be much less easy in the future.
2. Make sure you have a significant portion of your wealth in
precious metals and a significant part of that offshore.
3. Buy some nice foreign real estate, ideally in a place where you
wouldn’t mind spending some time.
4. Work on getting official residency in another country, as well
as a second citizenship/passport. There’s every advantage to
doing so, and no disadvantages. That’s true of all these things.
One more thing: Don’t worry too much. All countries seem to go through
nasty phases. Within the lifetime of most people today, we’ve seen it in
big countries such as Russia, Germany, and China. And in scores of
smaller ones – the list is too long to recount here. The good news is
that things almost always get better, eventually.
Founder, Casey Research
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