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July 14, 2019 - Freedomain Radio - Stefan Molyneux
33:30
The Death of America | Doug Casey and Stefan Molyneux
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Music Music Music Hi, everybody.
It's Stefan Molyneux from Freedom Aid Radio.
Following this is an interview I had with the enormously affable and charming Doug Casey.
He's an American-born free-market economist, best-selling financial author, and international investor and entrepreneur.
He is the founder and chairman of Casey Research, that's C-A-S-E-Y, a provider of subscription financial analyses about specific market verticals that he has focused his investing career around, including natural resources, metals, mining, Doug Casey Hi,
everybody. It's Stefan Molyneux from Freedom Aid Radio.
I am entirely honored to have the remarkable Doug Casey on the line.
Doug, I appreciate you taking the time.
I'm going to pepper you with a couple of questions, but really, people don't want to hear me.
They want to hear you. Go ahead, Stefan.
I'm sorry. I was going to say I can give you my opinion, and any opinion plus $20 will get you a cup of coffee in Tokyo.
Well, I think the thing that my listeners are most interested in is the argument that you have, which I think you have backed up with an extraordinary amount of empirical and rational evidence.
And if I understand it rightly, you're fairly embedded within the Austrian school or approach to economics and the business cycle, that America is not...
We're not going to bounce back from this recovery, but we are in a sense really at the beginning of a precipitous fall.
And I was wondering if you could lead people through the arguments that you have around that so that they can better prepare for what I agree with you is going to be a pretty catastrophic depression.
Well, yes. One could write a book on this subject, of course.
Essentially, in the real world, actions have consequences.
Cause has effect.
And for many years, the government has been inflating the currency.
And this has been successful early on.
But we've kind of reached the point of no return now, where the total amount of debt outstanding, and that's acknowledged debt, the $14 billion that the U.S. Treasury owes officially.
$100 billion, maybe as much as $200 billion off the book debt.
Even the $14 billion that's on the books can never be repaid.
And at this point, the trillion-dollar-per-year deficits that the U.S. government is running, the interest alone on those is not terribly...
Grave at the moment.
But that's only because the Federal Reserve is artificially suppressing interest rates, which they can do by buying bonds.
And buying bonds drives their price up and drives interest rates down.
So we're really at the cusp of an unparalleled disaster.
And it's not just the U.S. government.
It's all the Western European governments.
Eastern Europe is a different story.
Japan's a different story yet.
China's got its own problems.
So that I think what we're looking at is not just the biggest thing since the Depression in the 1930s.
This is the biggest thing since the Industrial Revolution.
Right. Or you could say the biggest thing since the collapse of the Weimar currency in Germany in the 1920s.
Oh, certainly. That's the case.
Yes. Now, a lot of people don't really understand and I mean this is part of sort of rational calculation of what's the point of understanding but I think it's really worth for people to understand the degree to which foreign debtors can bleed fixed assets outside of America.
I wonder if you can talk a little bit about the mechanics by which that is going to occur.
I mean obviously they don't want to depress the value of their dollar holdings but they want to trade them in for something that has real value rather than this fantasy fiat currency.
Yes, there's something like, and nobody knows for sure, because one of the reasons nobody knows for sure is that there are reputedly more $100 bills in circulation in Moscow alone than there are in the entire United States.
Is that right? Yes, this is what is said, but who knows what these numbers really are?
But It would seem that there's at least 7 trillion US dollars held outside the United States.
That's a gigantic amount of money.
That's several times the amount of the money supply inside the United States.
The US dollar is used as the de jure currency in about four countries around the world, Ecuador, Panama, Liberia, and I'm forgetting one other.
And the de facto currency in about 50 others.
Well, where I am here in Argentina at the moment, real estate is not bought and sold in the local peso.
It's bought and sold in dollars and generally in cash, in briefcases.
So if the dollar collapses, it's going to be a worldwide problem.
But it's more than that.
Although most people don't understand economics, they're actually not stupid.
And they understand that the cat's out of the bag.
They know that the Federal Reserve is printing up literally trillions of things.
And they know that they've got a hot potato.
But they don't want to all rush for the door once because they know that they're going to get crushed in the stampede.
So this is a real problem.
In other words, I think we're within...
A very short period of time, like a year of things coming unglued again.
We're in the eye of the hurricane right now.
We went through the first, the leading edge of the hurricane in 2008, and it's been papered over.
But when we come out the other side, it's going to be really catastrophic.
And the steps, of course, that are going to occur is the inflationary I love how governments think that if you invent a new phrase, you solve the problem.
We don't call it printing money.
We call it quantitative easing.
That is going to cause a collapse in the value of the U.S. currency.
I think the euro, of course, as we all know, is pretty much in trouble as it stands.
There really isn't a backup currency.
Certainly, the Japanese currency is not that valuable given the amount of debt.
I think it's over 200% of GDP, the debt that they have at the moment.
I think you've written, and rightly so, that in the supposed victory against communism, we've ended up in a situation where Chinese entrepreneurs face far lower taxes and fewer regulations and more opportunity for wealth creation.
I was wondering if you can talk about the effect that you think that the shift in capital to some of the more emerging markets might have an effect on accelerating perhaps the devaluing of the U.S. dollar.
Well, of course, I'm an American and I still spend time in the U.S., but I've been to 175 countries.
I've lived in 12 at this point.
And if I was going to open up a business, the U.S. would be fairly low on my list of places to go.
And I think most people feel that way these days.
China is a much more business-friendly place than the U.S. People say, oh, how can you say that?
It's communist China.
But the Communist Party is just a scam.
For the people that are members of it to rip off something off the top of everything that goes on.
It's a political swindle, but they've figured out it's better to tax things that exist than own 100% of something that's worth nothing, which was the case during Amala's days.
So, what are we saying here, really?
What I'm saying is that it's very sad, but the U.S. is a sinking ship at this point, and I think it's even too late to man the pumps.
I think it's time to man the lifeboats, and that's why I spend most of my time out of the U.S. In fact, I don't even like going back to the U.S. It makes my skin coral to have to deal with the customs and immigration people and then to deal with the TSA people.
There's a new burden every day and I can't believe I'm the only one that feels that way.
In fact, I know I'm not. I think that's very true.
I think that people get a very gut sense that something enormously bad has occurred.
I wonder if you could talk a little bit about – because people are sort of living inside this dream world created by cunningly skilled linguists who write about the US recovery as if it's a real possibility and fail to address the fundamental flaws both in the system and in the economic decisions that are being made in Washington.
It's really amazing to me that these people can say with a straight face that they're expecting a turnaround as if these deficits and debts aren't real and aren't occurring and especially with all the baby boomers retiring at the moment, how the system can be even conceived remotely as being sustainable.
What do you think is driving?
The pundits, other than the obvious economic interest, what do you think is driving all of the writers and the economists who are talking about the sustainability of the system?
Why are they deluding people and are they themselves deluded or they genuinely believe what they're saying?
It's hard to know. That's a very good question.
Are we dealing with knaves or fools?
Or is it perhaps a mixture of both?
But actually, it's not really a question of looking at To find evil, it's stupidity.
As Einstein said, after hydrogen, stupidity is the most common thing in the universe.
These people like Paul Krugman and so forth, they're totally wrongheaded.
Or Bernanke.
They have no understanding of anything.
And if you were to approach them on any basic philosophical issue, you'd have to just be at loggerheads and disagree with them about the very nature of man and the nature of what should and shouldn't be and so forth.
No, it's a hopeless situation.
I'm only...
I'm kind of fascinated in seeing how things reshape themselves when the current system collapses, because I think it is going to collapse.
And it's very problematical.
This is much worse than what happened in the 1930s, because this time around, all these currencies are going to lose value.
They're going to be wiped out.
And this is catastrophic because the productive people of society are the ones that produce more than they consume and save the difference.
But the way people save today is with dollars.
So it's going to be the productive people that are going to be wiped out as the dollar vanishes and with it all their savings, all their assets, their insurance policies, their bonds, and so forth.
Corporations that keep Hundreds of billions of dollars in cash.
I don't know what those corporate managers who aren't terribly sophisticated on these things are going to do when the dollar starts losing value daily.
You know, this is very serious.
And it's the people who are deeply in debt.
And who rely on the government, actually.
They're going to have their debts wiped out, but their checks from the government in some form, perhaps with some kind of new dollar, are still going to keep coming in.
So what we're talking about is not just an economic and financial catastrophe.
We're looking at a social catastrophe.
And since these people always look for somebody to blame, and it's easier to blame a foreigner, we're possibly looking at military catastrophes, too.
Well, certainly, war always seems to be the last refuge of inflationists.
And I think another thing that's different between now and the 1930s was in the 1930s, the government was so much smaller.
I mean, the Great Depression, at least according to the arguments of Rothbard, which I accept for what it's worth, It came about as a result of catastrophic manipulations of currency and interest rates and money supply by the Federal Reserve.
But in the 1930s, you didn't have these huge dependent classes hanging off the government where between a third and a half of the Americans get their income largely or entirely from the government.
That wasn't the case in the 1930s.
You had more flexibility to cut government without these kinds of catastrophes and riots and people can't get enough to eat.
That's not the case anymore.
The government has swollen to the point where there's so many people who are dependent on it that shrinking it is going to be extraordinarily difficult.
And I agree with you that I think it's beyond recovery at the time.
There's no politician who's got enough charisma and will to turn this thing around.
And so many people have become dependent on it that it really can't come back from the brink, I think.
No, you're totally correct.
And it's even worse than that.
Because even as late as the 1930s, most Americans lived on the farm.
Or if they didn't live on the farm, they were shortly off the farm.
People were much closer to the land.
Now everybody lives in cities or suburbs.
And if things break down now, it's going to be much more serious than what happened in those days for demographic reasons alone.
Yeah, I mean, cities are entirely dependent upon financial infrastructures and the free market to trade goods and services for food.
And when that begins to break down, it's not like I'm going to trade my skills as a media guy for some guy on the farm for potatoes.
It's much more sophisticated.
And when you take a wrecking ball to that machine, which is currently happening, yeah, I think it is a pretty catastrophic future and scenario.
Well, this is why you're talking to me right now.
I'm at the beach in Uruguay, Punta del Este.
But this is one of the reasons why I live down here, basically.
It's that all these South American countries have been through the meat grinder.
They've had their currencies destroyed.
But for that reason, there's no debt in these countries because nobody will lend anybody in these countries money.
It's the bright side, and they're very agricultural countries.
I've got a lot of farmland and so forth, and these governments are quite stupid, but nobody respects them.
Nobody likes the police or the army, unlike the U.S., where the army is put on a level above anything else, actually, at this point.
So I feel much better, much safer down here and a place that's not going to be as badly affected and it's likely to actually profit from the Greater Depression.
I think the U.S. is not a good place to be for the next five years.
No, I agree with that.
Now, if we can, you know, pretend that we're prognosticators and uncover our crystal ball.
When we look beyond the current catastrophe, if you had a magic wand to wave about what sort of society would emerge from the coming crisis, what would be your ideal solution or what do you think would be the best way to create a more sustainable financial, economic and social system than what has come before?
Well, of course, I don't believe in government as...
An entity. I don't believe that government, or I shall say the state, actually has an actual right to exist.
And I don't like to acknowledge it.
But look at this thing historically.
For many hundreds of thousands of years, people organized themselves on a tribal basis.
And at some point, starting with ancient Egypt, That you gave your loyalty not to your tribe, people that you knew, but that you gave your loyalty to a king.
And then, starting in the 1600s, 1700s, the nation-state arose.
And you no longer gave your loyalty to a king.
You gave it to a nation-state, an agglomeration of land with different people.
I think that the nation-state itself now is at the point of being overturned.
And... I think the nature of civilization is going to change as seriously over the next couple of generations as it did when kingdoms were overturned and before that when tribes were overturned.
But there's other things too.
I mean, Moore's Law, technology is advancing.
Very, very rapidly in about 50 significant areas.
And there are more scientists and engineers alive today that have lived in all of previous human history put together and they're making advances.
So while I'm pessimistic for the short run, I'm optimistic for the longer run.
But the problem is the state is going to be like a gigantic and very dangerous dinosaur thrashing around.
And in its death throes, it's going to take more and more power for itself because people are going to demand that the state do something to solve their problems.
They think of it as a cornucopia.
So I think things are going to get much worse before they eventually get better.
Yeah, it is.
Slow suicide by statism seems to be a depressingly repetitive pattern in all advanced human societies from ancient Greek to ancient Rome all the way through to the modern era.
It is one of these things.
It is a very hard delusion for people to give up, to think that we need a violent monopoly, a force to organize society.
I'm a reluctant anarchist as well.
I sort of eventually came to the conclusion that when you look at the morality and the evidence of the state, it really can't be allowed to continue.
Either the state survives or humanity does, but I don't see the two coexisting in a very positive way.
Was it a slow process for you coming to that conclusion?
Did it happen all at once?
Was there any particular piece of the puzzle that fell into place?
Well, I've got to say I took a conventional path because I remember when I was a kid, probably only about eight, nine years old, and Eisenhower was president of the U.S. And I lived in Chicago, and my mother and I went on a drive from one part of the city to another, and I saw all these horrible slums.
And let me tell you a true fact.
I actually dictated a letter to my mother to That she typed to President Eisenhower saying, Mr.
President, can you do something about these horrible slums that these poor black people have to live in?
That's a true story.
I actually did that.
So I guess I was a liberal at that point.
And it's actually because most of the liberals I've met have about the intellect of an eight-year-old, so I think that probably is about right.
That's my excuse for that episode.
But, of course, I started questioning these things as time went on, and then In the 60s, I read Barry Goldwater's book, The Conscience of a Conservative.
And this was the first thing of this type I'd read.
I said, oh, this makes sense.
I must be a conservative.
And idiotically, I stayed stuck in that stage for some years.
And then the next thing I read was Anne Rand's Virtue of Selfishness.
And after I read her book, I had to put it down after the first page because I was so shocked that someone had actually written what I'd always really believed and it crystallized it for me.
And so I went through a randite stage, which is kind of painful and it's a teething pain on the way up.
And what really – the next piece of my intellectual progress is I wrote a book by Morris and Linda Tannehill called The Market for Liberty.
And at that point I realized that I was an anarchist.
And of course I've gone beyond there at this point.
I'm not only an anarchist but an atheist libertarian with nihilist and solipsistic tendencies.
That really sounds like a bad diagnosis from your doctor, but I just wanted to reassure everyone that it is a glorious place to be intellectually.
It is. Unless you live in Aspen, Colorado, which I have for many years, and it's why I don't get invited to any dinner parties in Aspen, at least not more than once, because I can always do five minutes on the weather and the state of the roads with somebody sitting next to me, but then I like to talk about things that are of value, which means philosophy.
But what's practical and applied philosophy?
It happens to be religion and politics, which are the two things that you're never supposed to talk about.
So either I sit there and not say anything, or I piss all these people off.
So it's an uncomfortable position to be in.
Right, right. And I think the...
Yeah, I think anybody who's an anarchist and not an atheist is only getting half the equation.
Was there a progress?
Were you brought up religion? What was the progress towards atheism for you?
Well, I grew up in a cannibalistic death cult, which is to say I grew up as a Roman Catholic.
Yeah, I was going to say Catholicism.
Got it. But I've long since left that behind.
And... People say, how can you deny one of the fundamentals of Western civilization?
But I would say it's one of the anti-fundamentals of Western civilization.
I mean, Rand said it very well.
These people out there believe in the supremacy of Attila and the witch doctor.
And you've got to toss them both out.
Well, yeah, religion was something that the Western civilization survived.
It was not the foundation. When religion was at its height, the Western civilization was in almost a pre-Muslim phase.
If you look at sort of the Dark Ages and the early Middle Ages, when religion was at its height, we wouldn't recognize Western civilization compared to ancient Greece or ancient Rome, where religion was actually a fairly small deal before the advent of Christianity.
So yeah, people who say that Christianity is somehow foundational to Western civilization, don't really understand the classical roots of it and the degree to which it was eclipsed by religion during its darkest centuries.
You're quite correct, Stefan.
That's absolutely the case.
And this is one reason, incidentally, why conservatives are in many ways more dangerous than liberals are because...
Conservatives believe in both God and the state.
And the other thing is that at least liberals are quite honest about their intentions.
They don't want economic freedom, and everybody knows that they're just kidding when they say they want social freedom.
But conservatives actually say that they believe in freedom, and they're hypocrites.
And it discredits the whole freedom philosophy when you have these horrible people that say they're defenders of it, like George Bush.
Right.
Oh, yeah.
No, I went through a very short phase of endearment with U.S. conservatism before tripping over that cross, which is sort of in the middle of it and going, oh, that's not such a good feeling.
I completely agree with you.
I also find that debating with liberals can be a lot more productive than debating with religious conservatives because liberals can't pull out the wild card of faith.
I find I can win death by inches with liberals, but it really doesn't happen with conservatives because of the faith issue, which is really a short circuit of any kind of civilized conversation.
Actually, it's most enjoyable, if you're going to have an intellectual conversation, talking to an avowed socialist or an avowed communist, because at least then you know they take ideas seriously, even if they're bad ideas.
At least you have some common ground.
You can discuss ideas.
But when you're talking with Republicans or garden-variety Democrats, they don't take ideas seriously at all.
Their ideas... Their idea of what an idea is is something they'd read in a USA Today editorial or something.
Right. Now, I'd like to just pick your most enjoyable brain to try and get your thoughts about what people can do.
I know that's a really tough question, but I really try to constantly encourage my listeners to not feel like there's this giant eclipsing tsunami of change and doom coming their way that they just better hunker down like a bunch of hermit crabs before a tidal wave.
But what is it that you think people can do outside of obviously get some fixed assets, get out of debt or whatever?
What is it that people can do from a philosophical standpoint to hopefully not avert the change that is coming but turn it towards a more productive result in the long run?
Well, what I do for a living, I mean, we publish newsletters and this type of thing, so that's fine.
I do that for a living. But what I really do for a living is I'm a speculator.
And a speculator is one that capitalizes on politically caused distortions in the marketplace, okay?
And in the years to come, it's going to be a speculator's delight because it's going to be one politically caused distortion after another.
It's going to be a very tough time for people to try to save, certainly save with dollars.
They're in big trouble.
It's going to be very tough for people to invest because the more the state intervenes, the more unpredictable the results of investments are going to be and the harder it's going to be to create capital, which is what an investor does.
But for a speculator, it could be quite good if you diagnose these things.
So I'm not sure that to respond to your question...
I'm not sure there's anything that we can do to change the world because you've got to change the psychology of six billion chimpanzees out there.
And that's not possible.
There's just too many psychological aberrations you've got to deal with.
And they're ingrained in the way they relate to each other and the social structure.
So I'd say the charity begins at home, okay?
So the best you can do is to Accumulate as many assets as you have and look out for number one and other people that feel the same way that you do.
So that's the way I address this thing.
I have a weekly blog, which I guess you probably get stuff on, right?
Mm-hmm. Okay, but I don't try to convince anybody of anything there.
I do that for my own entertainment and amusement, but not because I think I'm going to change the world, because that's just not going to happen.
I'd like to see the world change in a favorable way, but it's just not going to, because we're dealing with the psychology of the human animal, and it's just too degraded at this point to expect massive change.
So, I expect things are going to get worse, not better.
The best you can do is use the French phrase, sauve kippur, let he who can save themselves.
Right, right. Now, the last question that I just read a little bit about this is a very tantalizing speech you gave in 2009 about privatizing a country.
I was wondering if you could talk a little bit about your goals and plans and also I'd like to give you my address so that you can mail a passport which isn't necessary because I'm sure it will be a perfectly free country.
But what's happening with that project?
Well, of course, I don't believe in passports.
No, indeed. I mean, it's a completely ridiculous legal fiction to have a passport.
But my hobby for the last 30 years has been going around the world.
And I've had some wonderful adventures in nine different countries where I've tried to convince the government to, in effect, overthrow themselves.
And sometimes I've come...
At least it seemed that way at the time.
Pretty damn close to being successful, but it's never worked.
So that's my hobby.
And even as we speak, I'm still playing with a place in the North Pacific, an island country.
I don't know.
I could go to a very obscure country in Africa where The guy that really owns and controls the country.
I get along with them.
But this is for amusement.
This is for entertainment. So anyway, that's my hobby.
You're quite correct. Well, I certainly will keep your blog on my radar so that I can find out when you achieve this, as I hope that you do, because I certainly would like to breathe free air before I die.
And the way that the smoke is gathering around these statist pyres of the world, it doesn't look like that's happening anytime soon.
So it would be great to breathe really free air before, because I think that we are at the beginning of a multi-generational change, like getting rid of slavery took 150 to 200 years, rights of women about the same.
It just seems to be That time-consuming to make these kinds of changes and, of course, we don't have that kind of timeframe given the way that the U.S. economy and other economies in Europe are going at the moment.
So I certainly wish you the very best with that endeavor and I'll definitely be pestering you if it ever occurs to be the second off the boat.
I hope I'm there to receive you, yes.
Well, thank you so much for your time.
I will, of course, put your contact information and website out on this.
I really do appreciate it, and I hope that you have an absolutely wonderful – it's not even a vacation where you are, right?
I mean, you're just kind of there for the duration, right?
You know, I still travel a lot, but I really like Argentina and Uruguay as places.
Stephen, are you there? Yes.
We just got a nice little hiccup, but we're still good.
Okay. I really like Argentina and Uruguay as places to hang out.
It's a high standard of living.
It's a low cost of living.
It's a low population.
It's got everything going for it.
I've analyzed this, but we're Where do you want to be on this ball of dirt floating around in this obscure, nothing-nowhere solar system in this small galaxy?
And of all the places on the planet that I've thought about, these seem to me about the best to be.
Well, I tell you, I just...
I'm just – I'm standing in my, I guess, home studio, you could say.
I'm looking out at the street and I'm in Canada and it is January.
So I'm looking at a massive road filled with slush and people struggling along to walk their dogs as their dogs are sort of belly deep in slush.
And I must say that I'm going to look a little bit more into Uruguay because it does look relative to where I'm standing and what I'm looking at right now.
I bet you have a bit more of a picturesque view and that's really something to be envied.
I'd like to see you actually follow up on that.
Make that more than just an idle thought, okay?
I certainly will. I'll look you up if I get down.
And thanks again so much. You're welcome back anytime.
Thank you. Bye.
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