'U.S. Empire Is Collapsing': Famed Investor Reveals Crisis Investing Assets To Surge | Doug Casey
Summary
Market Outlook: The guest expects prolonged geopolitical tensions and higher interest rates, creating a difficult backdrop for bonds, real estate, and richly valued U.S. equities.
Commodities: He is heavily long commodity stocks, arguing commodities are historically cheap relative to financial assets and should outperform in this environment.
Precious Metals: Bullish on gold and silver as hedges against currency debasement and policy constraints, favoring physical ownership and noting silver’s multi-year supply deficit.
Oil: Sees oil moving higher despite current backwardation due to damaged refining and pumping capacity; prefers oil stocks with limited Gulf exposure and downplays a $1 Strait of Hormuz toll as immaterial.
Copper: Positive on copper and copper miners due to rearmament demand and large capital requirements limiting new supply, despite short-term volatility.
Regional Theme: Favors East Asia long term, citing better tax/debt dynamics, cultural cohesion, and fewer welfare burdens versus a declining West.
Companies Mentioned: Ford (F) and General Motors (GM) were discussed as potential defense suppliers, but he is not bullish on U.S. stocks broadly.
Risks & Strategy: Warns of inflation, higher taxes, and forced speculation; maintains positions in commodities and precious metals while avoiding long-duration bonds and leveraged real estate.
Transcript
Trump, as wild and crazy as he is, might actually counterattack with with nuclear weapons against them. It's entirely possible. The US is a uh flailing and failing empire doing destructive things to try to maintain its uh its role at the top of the world using the military more than anything else. Like I think the world is going to go back to using gold as money because uh you can't trust fiat currencies. I'm pleased to welcome back to the show Doug Casey, best-selling author, founder of Crisis Investing and the Crisis Investing Newsletter. Doug was the bestselling author of Crisis Investing and Crisis Investing for the rest of the '90s and the preparation. We'll be talking about what is next for the global world order. Doug, welcome back to the show. Good to see you. >> It's nice to be back here with you, David. And uh as the last time I'm still at my farm in Uruguay, which is uh peaceful and out of harm's way, unlike much of the rest of the world. Do you think that you have chosen a life away from I guess the center of attention um and that this peacefulness that you talked about will last for you in your part of the world? Well, that's a good question. Uh, I think this part of the world is out of harm's way. There are no uh obvious military targets down here. Uh, all Argentina and Uruguay do is produce lots of food and everybody wants food. So, um I think this part of the world is going to do relatively well in the future, especially since although he's making a lot of stumbles along the way, which concerns me, uh Malay is the best thing that's happened on the world's political scene for the last 50 years, maybe forever, quite frankly, because he's the world's only avowed anarcho capitalist, which is quite unusual. He wants to disband the Argentine government. He's not succeeding as well as I'd hoped. But anyway, yeah, I'm pretty happy down here most of the year. Although for the northern summer, I'm going to return to the US to uh the Chesapeake Bay in Virginia. I enjoy the uh I enjoy the climate and the oysters and the crabs and the water. >> Currently, as we speak, the US and Iran are signaling that they're ready for another round of talks. Although last night I read that Iran has uh rejected uh further negotiations in Islamabad Pakistan. Uh Trump has signaled today that he is ready to go back to war should a deal not be reached and the street of Hormuz toggles between um open and closed uh depending on the time of the day. So right now I think they've reopened uh previous night it was closed. Uh oil, WTI oil is currently back up above $90 a barrel, but still much lower than $100 uh just a week and a half ago or two weeks ago. Doug, has anything permanently changed in the world since February 28th, or do you think that these tensions will abate and life will return to normal for everybody in the everybody in the world shortly after? >> I certainly I certainly hope it does because I prefer like everybody prosperous times to uh non-prossperous times. And uh I certainly don't want to see a war, but I don't see how now that Trump has uh whacked the hornets's nest. I don't see how this is going to end uh peaceibly entirely apart from the fact that Trump is acting like a schizophrenic. On again, off again, closed again. Everything's going great. uh we're going to blow up your civilization tomorrow morning. Uh how can you trust or negotiate with a person such as that? In fact, the last time they had uh serious negotiations, Trump used it as uh as an excuse to launch a sneak attack on the Iranians. And it's not that I'm defending the Iranian government. It's a it's a a criminal uh government. But that's true of at least 20 or 25 other governments around the world that are just as bad as that as of Iran. But frankly uh the US is running around acting as an international gangster at this point uh unpredictably using its military to uh get what Trump wants. Trump, Biden, I mean these these are all sociopathic characters. It's too bad that uh uh they're calling the shots in the world today. >> Where does this end? How does it end? >> Well, where does it end in Iran? Uh with a straight of Hormuz. Uh at this point, the Iranians really can't back down. Uh the US and Israel, and I think that uh the US is really acting as Israel's cats paw on this. The US has no interest in that part of the world. the other other side of the world. Uh in my opinion, the US should withdraw from that part of the world where it can only get itself into trouble uh sticking its nose into Hatfields and McCoy battles between the different countries in this this part of the world. But at this point, so much damage has apparently been done to the Iranians that they'll be quite justified in asking for reparations for all the damage that was done because it was an unprovoked attack against them. Uh unprovoked people would say yes, it was the fact that you know decades ago they were running around saying death to America and so forth. Well, what do you expect after the US overthrows uh a popularly elected regime in 1953, not a regime I would have approved of, uh replaces it with the Shaw, uh who did some good things for Iran, but was a nasty character with a nasty secret police. Then it gets taken over by another set of dictators. Look, we don't understand what's going on in Iran. Uh, and the best thing to do is not launch a war against a place that you don't understand. It's not going to end. The Iranians are not going to back down. Okay? Uh, they want reparations. They're going to try to collect reparations both directly from the US and Israel, which isn't going to pay anything, but also by charging tolls of ships going through the straight. But then the US says, "If you pay a toll to Iran, we're going to stop you," which they've been doing. So, uh, I don't know how you get out of this pickle that, uh, the US has gotten itself into at this point. >> According to some analysts, gold doesn't need the Fed to cut rates to move higher. What it needs is exactly what we already have right now. A Fed that's frozen, real wages that are shrinking, 13 consecutive months of downward payroll revisions, and a debt load that Fed chair Drew Pow himself said will not end well. That's not a bearish take. Those are the Fed chair's own words. >> It's it's really important that we get back to we don't have to pay the debt down. We just need to to to have, you know, primary balance and and begin to have the economy actually growing better, growing more quickly than the economy. It will it will not end well if we don't do something fairly soon. When real economic conditions deteriorate and policy cannot respond, gold and silver have historically been where sophisticated investors go. Not paper gold, but physical metal you actually own. Now, I've been covering precious metals for a long time. I know the space. And if you're listening to the show, you're likely not new to the gold conversation as well. You've probably been pitched by a dozen gold dealers already. But here's what's different about Priority Gold. Today's sponsor, Priority Gold, they show you how to add a physical gold and silver to your retirement portfolio tax and penalty-free. And they actually walk you through it. You get a free portfolio review with no pressure and no rush. They are not trying to close you on a call. They have thousands of five-star reviews from people who have been through the process and appreciated that approach. They handle all the paperwork and right now they're offering up to $10,000 in free silver on qualifying purchases. So, scan the QR code here on the screen right now or click on the link in the description down below to get your free precious metals playbook. >> Have you heard any suggestions? >> Do I have any suggestions? >> Have you heard any? >> Oh, I've heard any suggestions. Um, it seems to me that uncertainty is now the new certainty when it comes to what's next. And so I I I am not entirely sure that even the Trump administration is uh fully certain of what's next. I I I do think that perhaps, and I'll get your opinion on this, oil's price going forward will now permanently bake in a toll fee from the uh Street of Hormuz, unless the um the exporters of oil from the GCC region will find a way to bypass that straight uh in the in the future. But for now, I think there could be like I I I was reading probably it comes out to about a dollar a barrel. If you if you if you if you if you charge a tanker a million dollars, then that comes out to roughly a dollar per barrel. So perhaps WTI and Brent or more specifically, I think more more Brent than WTI will have a $1 additional spread on it. I that's what do you think? Well, to use the uh currently fashionable word that is sustainable uh on a $90 product, a dollar a barrel is is a rounding error, especially since oil prices fluctuate the way they do. But it seems to me that oil is underpriced uh right now at $90 a barrel. If you look at the futures markets, both Brent and uh uh WTI, uh they're in backwardation. In other words, you look at oil several months ahead, it's a lot cheaper than it is on the on on the front month, which seems to be saying that the market thinks that uh oil itself is going to get cheaper. That 6 months from now it's going to be $80 or $70 a barrel, something like that. I don't think so. I think that it's actually going to go much higher because uh so much in the way of refining capacities uh have been destroyed in the war and pumping capacities throughout the Gulf have been severely damaged. The longer this goes on, the harder it's going to be to get them going again. Uh so that's the way I'm playing it. uh I remain long uh oil stocks that are not too involved in that region and I'm still long uh gold and and other commodity stocks uh commodities relative to the uh financial end of the market are very very very cheap historically cheap actually so uh I like to buy things that are cheap sell things that are dear and I'm I'm still heavily heavily involved in commodities and commodity stocks for that reason. >> Let me come back. >> This war is not this war is not going to go away. I don't see an easy solution to it. I mean, the Iranians cannot back down. They won't. And and Trump, of course, is pigheaded uh and surrounded by idiots. I mean, people like Pete Hexth and this woman that he just fired, Nomi Christine Gnome, and where does he find these people? for God's sake. >> How does the war positively impact commodity prices besides oil? This is copper for example. And as you can see, uh shortly after the war broke out in Iran, uh copper actually, uh fell in the in the in the months uh following February, sorry, in the weeks following February 28th and it was only recently in the last 3 weeks that copper started to recover. Uh this is also true of gold and silver. So I why have what is the market signaling here? Why have commodities, raw materials, critical minerals fallen on the back of a war? Well, there are always conflicting things. For instance, with gold and silver, uh since the US is in a position where it has to print money to finance the war, it really can't borrow money for all kinds of reasons. has got about $10 trillion of past debt that it's got to roll over plus 2 to 3 trillion of new debt that it's got to finance this year. So, in effect, it's printing money to finance its debt. The dollar is going to get weaker. This is why people want gold and silver. But on the other hand, you've got the uh countries in the Gulf that are under a lot of pressure uh to meet their obligations. They may be forced to sell gold and silver. Oh, well, I'm sure China will buy all that they want to sell. So, war war is something that causes you to be optimistic for gold because it's going to destroy currencies. As far copper, for instance, uh perhaps copper took a a little dive a few months ago because uh there would be less consumer spending when things like automobiles and new houses use copper. But on the other hand, uh weapons which the whole world is creating now, not just the US which is reloading and the Iranians that are reloading, but the Europeans have all about doubled their war expenditures. The whole world is doing that. This is why the whole world rearming. Rearming against what? Against whom? >> Yeah, that's a good question. uh I don't see China as being the great devil uh that's uh we should rearm against in fact rearm for the US to rearm uh is provocative to China which it seems to me is concentrated on building its economy and minding its own business basically. Uh I listen I I see the US and I'm very sad to say this because um the US used to be America which was truly unique among the world's countries. The only country in world history that was founded on the principles of of uh free minds, free markets. Uh and that's pretty well vanished uh at this point. So it seems that the US is a uh flailing and failing empire uh doing destructive things to try to maintain its uh its role at the top of the world using the military more than anything else. Like look, it's military uh biggest military in world history and Trump has increased the military budget by 50%. which is a lot. Uh but what are we buying with that? We're buying very expensive weapons. Th those Shahed drones that the Iranians are using very effectively. It's said that they cost $35,000 a piece. Well, I've seen estimates people trying to put together these things informally under the circumstances that the Iranians would use. They cost including their explosive payload payload more like $7,000 a piece, but we shoot them down with the million dollar or $3 million missiles. That uh once again using that popular word is unsustainable. The aircraft carriers that we send over there cost about 105 billion a piece plus their air wings. But they can't go any anywhere near Iran because when the what was it was the um it was the Ford went near there. They said they had a laundry problem or their toilets weren't working so they had to run away. >> Yeah. >> But but but at the same time there are indications that Iranian missiles or drones did some serious damage to it. So we have all this expensive junk which can't be used anywhere. not not with the new method of warfare, drones and um and uh missiles. So, uh I think the US is um I hate to say this, the Europe is actually a a rapidly sinking ship, but the US is taking on water, too. Speaking of weapons production, take a look at um the Pentagon seeks help from Ford and GM. So, uh, Pete Hex actually met with Ford and General Motors executives and, uh, talked about whether or not their plans could start producing weapons components, not entire weapon systems, uh, just components. No specific projects are currently being negotiated. This is still very early stage. This is the first time, this would mark the first time an automaker would be producing weapon systems or even components for weapons since World War II for the government. >> Well, this is very disturbing because it shows that the uh the US government is looking for more wars and producing massive weapons to fight them. And it's amazing just having raised the defense budget, like I said, by 50%. I mean, who are they going to use those weapons on? Just Iran? Well, at the moment, it looks like just Iran. But Iran is an isolated third world country, and we shouldn't have any beef with Iran. Yes, I know their regime is, you know, runs around saying using harsh language and so forth, but uh Iran's not our problem. Iran is Israel's problem. And it's like the Trump regime is trying to make Israel the 51st state of the US. which makes no sense. So, you know, I I Yeah, it's a problem. I mean, what kind of weapons can Ford and GM produce? Uh they shouldn't be producing weapons that are uh equivalent or usable the way these $7,000 drones that the the Iranians have. But no, we're going to produce more multi-billion dollar or or at least multi-million dollar weapons. It's a good way to bankrupt further an already bankrupt government, namely the US. >> Would you be long for GM stocks if Pentagon were to make a deal with them? >> I wouldn't be long I wouldn't be long really any US stocks at this point because by all parameters uh of what constitutes cheap and dear uh the US stock market is at or around an all-time high. Uh so I really have no interest in it. I'd like to have an interest in it and bargains will arise from time to time but um you know when um when the tide goes out uh everything goes out with it. So that even if you pick bargains in the US market right now uh if if we have another uh real like we did in 2008 you can lose 50% of your capital easily and of course this can happen to people that are invested like people like myself investing in commodity stocks too. It's a very tricky and dangerous uh environment we're dealing in financially >> when there is a war in the Middle East. it may be appropriate to pull out and dust off the covers of your book Crisis Investing, which was a bestseller in the late '80s. Now, my question is, is it a crisis for the US and American investors? Obviously, there's a crisis in the Middle East, but for those of us sitting in North America, does this apply to us? The principles of your book, are we in a crisis today just because there's a war halfway around the world? >> Uh, yes. Yes, we are. Because among other things, interest rates, which I point out, have been going down after reaching a peak in the early 80s, which as you'll recall were 15 to 18% for a US government paper. They've been going down and have gone down until 2022 when they reached almost negative levels. They've been going up since then. And my prediction, and I hesitate to predict the d direction of interest rates, uh, but I think in the coming years, we're going to see interest rates go back to the levels they were in the early 80s and beyond. So, you don't want to own bonds for that reason because bonds fluctuate inversely with interest rates. Uh, and they have other risks, too, like they're denominated in dollars, and the dollar is going to lose value in addition. And of course there's a default risk as well. Uh at least on everything other than US government bonds, although that's an open question at this point. So uh bonds are not good. But real estate real estate floats on a sea of debt. If you can't borrow money, you really can't buy or sell a house or anything else. But what's going to happen if I'm right about interest rates going up? Well, real estate's in trouble as well. So, okay, bonds, real estate doesn't look good. And the stock market, uh, I'm still of the opinion that the profleagy of governments for many years is going to result in a real depression. I call it the greater depression. That's not good for stocks. So, what are you what are you going to do to maintain your wealth? Well, it's a real problem because uh I think the whole world has been living above its means. It's been progressing tremendously with technology. I love technology. It's I'm a technophile. But um still uh even with good things like that happening, I think the general standard of living of the average guy is going to head down. Why? Because all the debt in the world means we've been living above our means. you've been borrowing from past production and mortgaging future production. That's what the debt is all about. And uh we're reaching the point where it's hard to service and hard to pay back. So that means the standard of living is going to go down. People have to start producing way more than they consume, which is not what they've been doing recently. That's shown by the fact that people just aren't saving anything. And the average guy they say is living paycheck to paycheck. So yeah, I take kind of a a a gloomy look on on on the world economy which makes me unhappy because at the same time as Ray Kerszswwell has said for years, we're at the edge of the singularity which is going to change everything. So there there's lots of contradictory indications out there. >> Okay. Well, the mobilization of um civilian infrastructure to produce munitions. Let's go back to that for just one minute. Uh is necessary because it's widely known amongst military circles that the US uh does not have the adequate munitions to fight a sustained conventional war. We are on borrowed time, said John Ferrari, retired army general who is now a non-resident fellow at the American Enterprise Institute. The Russians, the Chinese, the Iranians, everybody knows that we don't have enough munitions. This article from the New York Times later highlights the fact that during World War II, uh the plants around Detroit famously produced weapons, what Roosevelt called the Arsenal of Democracy. At its peak, the uh factory in uh that Ford owned produced one B24 liberated bomber an hour, but that was because uh engineers designed planes and other weapons to be built with the machines that Ford already owned. So, I'm not sure if that's applicable today. So, going back to your question, what are the solutions? They want to have any solutions. I think they need to figure out how to create bombs and munitions first. That's what the >> Yeah. Well, I'm not sure that that's the answer cuz what's the big war right now? It's Iran. Of course, the war between Russia and the Ukraine, which is again none of our business, I don't think. Uh, look, creating tanks. Okay. Use those to fight a ground war. Is that really is that really the up-to-ate technology in in their recent invasion of Lebanon? The Israelis have lost about 100 Marava tanks. That's interesting cuz the uh the Hezbollah fighters don't have any tanks, but the Israelis have lost 100 maravas presumably with most or all of their crews. So, I'm not sure tanks are something that GM and Ford should be manufacturing. That's like the last generation of weapons. And uh in the Navy, it's um uh aircraft carriers are the centerpiece of our battle fleets. We have a dozen more or less of them. But those things are equivalent to battleships before World War II. I mean, they're sitting ducks. They really can't be used and they're unbelievably expensive. Uh, so what kind of things are Ford and GM going to manufacture? Because you're fighting against people that are using very effectively $7,000 drones and missiles that are much cheaper than ours. Oh, and hypersonic missiles besides. So um the the whole character of war is is changing uh you know it's like that movie uh what was it where uh the computer came up with the answer the only way to win is not to play and surely the Pentagon has made a calculus as to what the pros and cons the the benefits and the cost would be. What benefit does this war have on the American taxpayer? >> Only a negative benefit. uh you build something and then you destroy it. That's real wealth that's used in building something and then destroying it. That's real wealth that could be used for productive things, a new factory of some type or a new consumer product of some type, but it's but it's blown up. Uh nobody nobody really wins in a war. Uh it reduces the overall standard of living. Yes, of course there's some technologies that get developed in in war, but that capital that's used to develop that would still be out there. Uh >> so the the the common I guess rationale for instigating this war is that Iran is a terrorist state. It's the world's largest sponsor of state funed terrorism. Well, that's what they say, David. That's that's that's what they say. >> That's what they say. >> But I don't I don't think it's true. Uh what has what has Iran really done? Uh yes, they blew up the Marine barracks in Lebanon, but wait a minute, what were 250 Marines doing in Lebanon? Uh it was Hezbollah, not Iran. But yes, Hezbollah is said to be uh guided by Iran. But what are American soldiers doing in these countries? I mean uh and I I think the most that they can put together over the last 50 years of people that have died directly and indirectly because of Iran or Hezbollah. It it's a very small number of people and and a vanishingly small number of Americans. And the Americans have brought this on themselves by whacking a hornet's nest in a part of the world they don't belong in. saying that it's the world's greatest uh sponsor of terrorism. That's just a meme that's uh floated by wararm mongers. >> Do the rationale what I'm getting with the rationale for going and given by the Pentagon and the White House press is that this is for national security. Do you feel safer? Do you personally feel safer now that the Iran uh the Iranian regime has been struck by US and Israeli forces? I think it's just the opposite of fighting terrorism. They're um the main way that the Iranians can fight back against high-tech powers is by using asymmetrical warfare and that will be styled terrorism. So what's going on in the uh straight of Hormuz right now is about the only response that the Iranians can effectively use. They are not so far uh sending teams to the US to blow up infrastructure, which they could do and will do if they're pushed far enough. But I think they're holding off on that because Trump, as wild and crazy as he is, might actually uh uh counterattack with with nuclear weapons against them. It's entirely possible. And incidentally, they say that they they're fighting this war partially to uh keep Iran from getting nuclear weapons. But this is this has been said for decades and they don't have nuclear weapons yet. But they will now because they can see that nuclear weapons are the only way they can basically hold off uh people from attacking them anyway. Anybody can get nuclear weapons. The North Koreans, the poor poorest country in the world, got them. Israel has had them for uh against intern all dictates of international law. They're not supposed to have them for 60 years. Uh Pakistan has them. This is kind of letting the cat out of the bag where where smaller countries say we need nuclear weapons. Otherwise, the big guys are going to walk all over us. So, this has been counterproductive from that point of view. What does your book Crisis Investing tell us about investing during times of distress and heightened uncertainty, which is exactly what we have now? No one knows how this will end or how long this world will last. No one knows how long the street of Hormuz will be closed and how high oil can go or how long it will stay high which by the way directly affects monetary policy from the Federal Reserve. >> Well, that book recommended precious metals and that's worked out really really well for the people that uh followed that portion of the advice in the book. But uh one thing that the book recommended is just as a philosophical mention is that the cause for the problems we're having is the expansion of the state. Uh it's been said for a long time that war is the health of the state and when any war is fought the government grows. It sets up new agencies. It sets up new controls. sets up new dictates in the national interest to win its war. But um and as states have grown and states have taken ever larger parts of the national income, you know, a 100 years ago, which is not that long ago, it's just there people still alive from from 100 years ago. uh the US government lived exclusively on excise taxes basically on alcohol and tobacco and import duties which were much less than the excise taxes. Now it basically controls the economy and this is true of all governments in the world. Canada is in even worse shape than the US from this point of view even though it doesn't have this giant military that it feeds. So the prognosis is not good. What we have to realize is it's the state is the state the institution of the state and the crazy kind of people that want to get into it. People that want to control other people that's the real enemy. It's not the Iranians for God's sake. They're just another country with some goofballs running it, which as I said, there's at least 20 or 25 other states in the world that are just as crazy. >> So your book in the 80s recommended gold is a safe haven. Uh go is gold still a safe haven especially after what we what the market saw with gold shortly after uh February 28th which is go down not up on the brink of on the brink of conflict. >> I'm not worried about fluctuations. Look the dollar itself is the unsecured liability of a bankrupt government. So, you don't want to own dollars and gold is the only financial asset that is not simultaneously somebody else's liability. You can make an argument for Bitcoin that way, but it's a relatively new asset that hasn't really stood the test of time yet, although I'm favorable towards Bitcoin for a lot of reasons. So look, gold is gold at $5,000 or 4,800, wherever it is today, is not the same investment or same asset, I should say, cuz it's not an investment. An investment is something that produces more wealth. Gold doesn't itself produce more wealth. It's money. Like a $100 bill doesn't produce more more wealth. uh at $4,800, it's not the same asset that it was at $40 an ounce. So, you have to take that into consideration. But where else are you going to put your capital with the problems that I've outlined in bonds and property and stocks? Where are you going to go at this point? >> I I guess cash. If inflation is not a concern, >> that's that's okay. except you you're you're going to lose the value of your cash by five and probably soon 10% per year. So that's not a good alternative either. This is why uh people are actually being forced to become speculators just to stay in the same place. They're forced to second guess what what's going to go up, what's going to go down in a desperate attempt to stay in the same place. Uh there's more activity uh from the retail public in the financial markets today probably than there ever has been in the past. Everybody's got a Robin Hood account, you know, uh instead of saving money, they put it in their Robin Hood or the equivalent and try to guess which stocks are going up. Well, they're not investing in stocks today or speculating in stocks actually because they're productive businesses that are going to grow. They're speculating in in them because they're thinking over the short term various forces will take the stock price up or down. Very different from uh the Graeme Dodd philosophy of Warren Buffett, which is another problem I I see in the market. >> What's what's the other problem, Doug? the fact that the the world is over financialized at this point >> and and and the average guy is actually forced to try to second guessess the market to stay ahead of inflation and the problems in bonds and stocks. >> Well, perhaps the safety play is to speculate, meaning go risk on right now. Go into stocks, go into tech stuff, go into, you know, uh mining equities. Maybe that's what's going to help you beat inflation in the long run. What do you think? Yeah, I listen I agree because that's what I do for a living is >> right >> I mean I'm a speculator by trade actually it's that um it's that a lot of things are pretty overpriced relative to other with all the debt in the world and all of the speculation people trying to stay ahead of inflation and beat the market somehow it it makes for an unstable environment A stable environment is one where people work to produce more than they consume and save the difference. But you really can't save today in fiat currencies, Canadian dollars, US dollars. I mean, you're forced to speculate. But most people are not suited to be a speculator. Most people confuse speculating with gambling. Uh they're two very different things, although they look the same. uh to to to the uh to the tyro to the beginner which most people are. I mean most people that are playing around in Robin Hood accounts and the equivalent uh have not taken the time to study the market. They've only heard that you can make money playing with these things and you can but they're using it as a casino not as a vehicle for creating more capital. I mean, that's the point I'm trying to make. >> Okay. If you were a long-term investor, not a short-term speculator, you'd probably want to know what the ne what the world order is going to look like in the next 20 to 30 years, or at least imagine how the world may change in the next couple of decades such that you can allocate your assets accordingly. Perhaps you might want to diversify internationally and go into jurisdictions that have the most growth as opposed to the ones that are most indebted and growing the least. Um, where is America in the next 20 to 30 years? What is America's role in the world in the next 20 to 30 years? In the last 70 years, the world was dominated by one hedgemon that basically policed the world and some would argue enforced stability and and allowed global trade to uh to happen without interruption. Um, this is now coming to an end according to some. I don't know if you agree with that view, but I want to broadly get your take on how >> Yes. Yes, I do. Because uh it's expensive to be uh an unplay unpaid policeman and patrol the world sea lanes and keep pirates from uh attacking shipping. Um, yeah. And the US can't do that anymore because the US government and large sections of the US society are actually bankrupt. They're like wy coyote that's walked off the cliff but hasn't fallen yet. And I think it's pretty much the same thing. So where should you go and what should you should you do? Uh I believe for the long term I think China is going to continue to rise and that's true of East Asia generally speaking. Uh their tax situation is much better than it is in the west. Their debt situation is much better. uh they don't have in any of these countries really uh a welfare system to support people that don't work. Uh they're sociologically homogeneous. Uh they're not taking in masses of migrants from alien cultures with alien values. So these things really augur well for East Asia uh at this point. And I hope that uh the US and Canada can turn themselves around, but the trend is still downhill. And it's really hard when you have a snowball rolling downhill and gaining momentum rolling downhill, which is what these governments have been doing. It's really hard to stop it until the uh giant snowball smashes the village at the bottom of the valley and then people have to, you know, pick up and start over again. But the bright side is Europe is in much worse shape than the US and Canada at this point. So uh I guess that's kind of a plus for us but um not really because the problem is western civilization itself is in decline. The values of western civilization are being washed away and denigrated and disparaged. And I don't know how you turn that around either because a lot of this comes through the education system where people absorb these you know uh Marxist values. So I think the current trend we're seeing in the world is going to continue and accelerate for some time. >> Would you be long US government bonds? >> Negative. Negative. I'd be short US government bonds. >> Do you think that Well, look at the long-term I think you alluded to this earlier. The long-term trend of the long end of the curve has been down. This has been a secular bull market for the bond market uh for several decades now. And um >> right since the early 80s. That's right. >> Are is this is this on the cusp of reversing, Doug? Well, if we look at that chart you've got up, David, I think that we're talking about 1920 2022 2022. Yeah. >> Is where we hit the bottom and it's been going up since then. So, yeah, we're headed back up towards the level of the left side of the chart. >> You you you have to wonder as a bond investor when the 10-year yield hits nearly 0% under 1%, what do you do at that point? Because the 10ear yield can't go negative. Do you do you It's literally rock bottom. >> Do you That's a paradigm shift in the 604 6040 portfolio doctrine entirely. >> Yeah. Well, I forget about the 6040 portfolio do doctrine. Um for the foreseeable future, bonds are a speculative vehicle. They're not something that you should put away and hold. Once again, the reason is that they're denominated in a currency, a dollar, and that currency is going to continue losing value at five, probably close to 10% per year in the future. So, you're losing ground faster than the bond is paying you interest. And uh it makes no sense. This is a relic of the past. Okay. >> Yeah. >> So, >> okay. What what >> lot of these a lot of these bonds are going to be defaulted on >> either directly because corporations can't pay them or indirectly uh which is what the US government is going to do by inflating its debt out of existence cuz look remember that the prime directive of every living thing from amiebas up to governments and especially governments is to survive any way that it can and the way governments survive is by taxing and inflation is a form of taxation in addition to direct taxation. So, uh you can expect taxes and inflation both to go up as big as the governments are today. >> So, if the bond market, specifically government bonds, are a relic of the past. Give us just end on this note. Give us a few ideas for the future besides gold. >> There's a tungsten mine. I'm not going to mention it that I'm thinking of investing and nobody's thought about tungsten, but tungsten's exploded upwards in value. It's a war mineral among other things. So, I look at that. I think the price of copper is a good place to be. Uh is telling me copper is a good place to be, I should say. And because copper mines are immensely uh capital inensive billions of dollars uh there's a certain agitation on on the part of mining companies to build copper mines because governments then treat them and NOS's too and NATO groups to treat them as milk cows. Uh and you can't move that copper mine the billions of dollars you put there still there. So, uh, I'm speculating in copper mines regardless of those downsides that I've just mentioned. Where else to be? Uh, uh, silver has been in deficit for the last five or 6 years. It's likely to stay in deficit for quite a while, and it's a high-tech mineral. It's the most reflective uh, of all minerals and the most conductive of all minerals. So that um silver has a place in the world other than in jewelry um and gold. I think the world is going to go back to using gold as money because uh you can't trust fiat currencies. So what are you going to use as a money as a medium of exchange? Well, gold has peculiar characteristics that make it uniquely well suited to be money. Yeah. So, I'll remain long gold. Look, but I can't wait for the time which will come. I hope I'm still alive when the world stabilizes and I can dump all this stuff and just buy common stocks and productive businesses. That's the way it should work. That's the way the world should work. >> Tell us where you can find your work, Doug. I mentioned the Duck Casey um crisis investing newsletter, which I can show on the screen right now. a lot of topical issues that you talk that you cover on a on a daily basis. >> Yeah, there's three things actually. One is internationalmen.com. Another is I have a YouTube channel called Doug Casey's Take. I've got a lot of things on YouTube. And the third is our paid subscription newsletter. The other two things are free, of course. Uh it's called Crisis Investing, crisisinvesting.com. So people should go there and browse around, see what they think. to all three of those things. >> Okay, great. Appreciate your thoughts, Doug. Thank you very much for coming on the show and I look forward to having you back on again. Take care for now. >> Thank you, David. I I hope you don't get too much hate mail because of the things that I've said. >> Uh that usually means you're doing something right. So, uh I don't I don't uh encourage people to shy away from hate mail. I do encourage people to keep the comments civilized in the comment section, please. But thank you anyway for watching. Please do reach out to Doug and check out Doug's work. links down below. I'll see you next time, Doug. And I'll see you next time to the audience. Thanks for watching. Don't forget to like and subscribe.
'U.S. Empire Is Collapsing': Famed Investor Reveals Crisis Investing Assets To Surge | Doug Casey
Summary
Transcript
Trump, as wild and crazy as he is, might actually counterattack with with nuclear weapons against them. It's entirely possible. The US is a uh flailing and failing empire doing destructive things to try to maintain its uh its role at the top of the world using the military more than anything else. Like I think the world is going to go back to using gold as money because uh you can't trust fiat currencies. I'm pleased to welcome back to the show Doug Casey, best-selling author, founder of Crisis Investing and the Crisis Investing Newsletter. Doug was the bestselling author of Crisis Investing and Crisis Investing for the rest of the '90s and the preparation. We'll be talking about what is next for the global world order. Doug, welcome back to the show. Good to see you. >> It's nice to be back here with you, David. And uh as the last time I'm still at my farm in Uruguay, which is uh peaceful and out of harm's way, unlike much of the rest of the world. Do you think that you have chosen a life away from I guess the center of attention um and that this peacefulness that you talked about will last for you in your part of the world? Well, that's a good question. Uh, I think this part of the world is out of harm's way. There are no uh obvious military targets down here. Uh, all Argentina and Uruguay do is produce lots of food and everybody wants food. So, um I think this part of the world is going to do relatively well in the future, especially since although he's making a lot of stumbles along the way, which concerns me, uh Malay is the best thing that's happened on the world's political scene for the last 50 years, maybe forever, quite frankly, because he's the world's only avowed anarcho capitalist, which is quite unusual. He wants to disband the Argentine government. He's not succeeding as well as I'd hoped. But anyway, yeah, I'm pretty happy down here most of the year. Although for the northern summer, I'm going to return to the US to uh the Chesapeake Bay in Virginia. I enjoy the uh I enjoy the climate and the oysters and the crabs and the water. >> Currently, as we speak, the US and Iran are signaling that they're ready for another round of talks. Although last night I read that Iran has uh rejected uh further negotiations in Islamabad Pakistan. Uh Trump has signaled today that he is ready to go back to war should a deal not be reached and the street of Hormuz toggles between um open and closed uh depending on the time of the day. So right now I think they've reopened uh previous night it was closed. Uh oil, WTI oil is currently back up above $90 a barrel, but still much lower than $100 uh just a week and a half ago or two weeks ago. Doug, has anything permanently changed in the world since February 28th, or do you think that these tensions will abate and life will return to normal for everybody in the everybody in the world shortly after? >> I certainly I certainly hope it does because I prefer like everybody prosperous times to uh non-prossperous times. And uh I certainly don't want to see a war, but I don't see how now that Trump has uh whacked the hornets's nest. I don't see how this is going to end uh peaceibly entirely apart from the fact that Trump is acting like a schizophrenic. On again, off again, closed again. Everything's going great. uh we're going to blow up your civilization tomorrow morning. Uh how can you trust or negotiate with a person such as that? In fact, the last time they had uh serious negotiations, Trump used it as uh as an excuse to launch a sneak attack on the Iranians. And it's not that I'm defending the Iranian government. It's a it's a a criminal uh government. But that's true of at least 20 or 25 other governments around the world that are just as bad as that as of Iran. But frankly uh the US is running around acting as an international gangster at this point uh unpredictably using its military to uh get what Trump wants. Trump, Biden, I mean these these are all sociopathic characters. It's too bad that uh uh they're calling the shots in the world today. >> Where does this end? How does it end? >> Well, where does it end in Iran? Uh with a straight of Hormuz. Uh at this point, the Iranians really can't back down. Uh the US and Israel, and I think that uh the US is really acting as Israel's cats paw on this. The US has no interest in that part of the world. the other other side of the world. Uh in my opinion, the US should withdraw from that part of the world where it can only get itself into trouble uh sticking its nose into Hatfields and McCoy battles between the different countries in this this part of the world. But at this point, so much damage has apparently been done to the Iranians that they'll be quite justified in asking for reparations for all the damage that was done because it was an unprovoked attack against them. Uh unprovoked people would say yes, it was the fact that you know decades ago they were running around saying death to America and so forth. Well, what do you expect after the US overthrows uh a popularly elected regime in 1953, not a regime I would have approved of, uh replaces it with the Shaw, uh who did some good things for Iran, but was a nasty character with a nasty secret police. Then it gets taken over by another set of dictators. Look, we don't understand what's going on in Iran. Uh, and the best thing to do is not launch a war against a place that you don't understand. It's not going to end. The Iranians are not going to back down. Okay? Uh, they want reparations. They're going to try to collect reparations both directly from the US and Israel, which isn't going to pay anything, but also by charging tolls of ships going through the straight. But then the US says, "If you pay a toll to Iran, we're going to stop you," which they've been doing. So, uh, I don't know how you get out of this pickle that, uh, the US has gotten itself into at this point. >> According to some analysts, gold doesn't need the Fed to cut rates to move higher. What it needs is exactly what we already have right now. A Fed that's frozen, real wages that are shrinking, 13 consecutive months of downward payroll revisions, and a debt load that Fed chair Drew Pow himself said will not end well. That's not a bearish take. Those are the Fed chair's own words. >> It's it's really important that we get back to we don't have to pay the debt down. We just need to to to have, you know, primary balance and and begin to have the economy actually growing better, growing more quickly than the economy. It will it will not end well if we don't do something fairly soon. When real economic conditions deteriorate and policy cannot respond, gold and silver have historically been where sophisticated investors go. Not paper gold, but physical metal you actually own. Now, I've been covering precious metals for a long time. I know the space. And if you're listening to the show, you're likely not new to the gold conversation as well. You've probably been pitched by a dozen gold dealers already. But here's what's different about Priority Gold. Today's sponsor, Priority Gold, they show you how to add a physical gold and silver to your retirement portfolio tax and penalty-free. And they actually walk you through it. You get a free portfolio review with no pressure and no rush. They are not trying to close you on a call. They have thousands of five-star reviews from people who have been through the process and appreciated that approach. They handle all the paperwork and right now they're offering up to $10,000 in free silver on qualifying purchases. So, scan the QR code here on the screen right now or click on the link in the description down below to get your free precious metals playbook. >> Have you heard any suggestions? >> Do I have any suggestions? >> Have you heard any? >> Oh, I've heard any suggestions. Um, it seems to me that uncertainty is now the new certainty when it comes to what's next. And so I I I am not entirely sure that even the Trump administration is uh fully certain of what's next. I I I do think that perhaps, and I'll get your opinion on this, oil's price going forward will now permanently bake in a toll fee from the uh Street of Hormuz, unless the um the exporters of oil from the GCC region will find a way to bypass that straight uh in the in the future. But for now, I think there could be like I I I was reading probably it comes out to about a dollar a barrel. If you if you if you if you if you charge a tanker a million dollars, then that comes out to roughly a dollar per barrel. So perhaps WTI and Brent or more specifically, I think more more Brent than WTI will have a $1 additional spread on it. I that's what do you think? Well, to use the uh currently fashionable word that is sustainable uh on a $90 product, a dollar a barrel is is a rounding error, especially since oil prices fluctuate the way they do. But it seems to me that oil is underpriced uh right now at $90 a barrel. If you look at the futures markets, both Brent and uh uh WTI, uh they're in backwardation. In other words, you look at oil several months ahead, it's a lot cheaper than it is on the on on the front month, which seems to be saying that the market thinks that uh oil itself is going to get cheaper. That 6 months from now it's going to be $80 or $70 a barrel, something like that. I don't think so. I think that it's actually going to go much higher because uh so much in the way of refining capacities uh have been destroyed in the war and pumping capacities throughout the Gulf have been severely damaged. The longer this goes on, the harder it's going to be to get them going again. Uh so that's the way I'm playing it. uh I remain long uh oil stocks that are not too involved in that region and I'm still long uh gold and and other commodity stocks uh commodities relative to the uh financial end of the market are very very very cheap historically cheap actually so uh I like to buy things that are cheap sell things that are dear and I'm I'm still heavily heavily involved in commodities and commodity stocks for that reason. >> Let me come back. >> This war is not this war is not going to go away. I don't see an easy solution to it. I mean, the Iranians cannot back down. They won't. And and Trump, of course, is pigheaded uh and surrounded by idiots. I mean, people like Pete Hexth and this woman that he just fired, Nomi Christine Gnome, and where does he find these people? for God's sake. >> How does the war positively impact commodity prices besides oil? This is copper for example. And as you can see, uh shortly after the war broke out in Iran, uh copper actually, uh fell in the in the in the months uh following February, sorry, in the weeks following February 28th and it was only recently in the last 3 weeks that copper started to recover. Uh this is also true of gold and silver. So I why have what is the market signaling here? Why have commodities, raw materials, critical minerals fallen on the back of a war? Well, there are always conflicting things. For instance, with gold and silver, uh since the US is in a position where it has to print money to finance the war, it really can't borrow money for all kinds of reasons. has got about $10 trillion of past debt that it's got to roll over plus 2 to 3 trillion of new debt that it's got to finance this year. So, in effect, it's printing money to finance its debt. The dollar is going to get weaker. This is why people want gold and silver. But on the other hand, you've got the uh countries in the Gulf that are under a lot of pressure uh to meet their obligations. They may be forced to sell gold and silver. Oh, well, I'm sure China will buy all that they want to sell. So, war war is something that causes you to be optimistic for gold because it's going to destroy currencies. As far copper, for instance, uh perhaps copper took a a little dive a few months ago because uh there would be less consumer spending when things like automobiles and new houses use copper. But on the other hand, uh weapons which the whole world is creating now, not just the US which is reloading and the Iranians that are reloading, but the Europeans have all about doubled their war expenditures. The whole world is doing that. This is why the whole world rearming. Rearming against what? Against whom? >> Yeah, that's a good question. uh I don't see China as being the great devil uh that's uh we should rearm against in fact rearm for the US to rearm uh is provocative to China which it seems to me is concentrated on building its economy and minding its own business basically. Uh I listen I I see the US and I'm very sad to say this because um the US used to be America which was truly unique among the world's countries. The only country in world history that was founded on the principles of of uh free minds, free markets. Uh and that's pretty well vanished uh at this point. So it seems that the US is a uh flailing and failing empire uh doing destructive things to try to maintain its uh its role at the top of the world using the military more than anything else. Like look, it's military uh biggest military in world history and Trump has increased the military budget by 50%. which is a lot. Uh but what are we buying with that? We're buying very expensive weapons. Th those Shahed drones that the Iranians are using very effectively. It's said that they cost $35,000 a piece. Well, I've seen estimates people trying to put together these things informally under the circumstances that the Iranians would use. They cost including their explosive payload payload more like $7,000 a piece, but we shoot them down with the million dollar or $3 million missiles. That uh once again using that popular word is unsustainable. The aircraft carriers that we send over there cost about 105 billion a piece plus their air wings. But they can't go any anywhere near Iran because when the what was it was the um it was the Ford went near there. They said they had a laundry problem or their toilets weren't working so they had to run away. >> Yeah. >> But but but at the same time there are indications that Iranian missiles or drones did some serious damage to it. So we have all this expensive junk which can't be used anywhere. not not with the new method of warfare, drones and um and uh missiles. So, uh I think the US is um I hate to say this, the Europe is actually a a rapidly sinking ship, but the US is taking on water, too. Speaking of weapons production, take a look at um the Pentagon seeks help from Ford and GM. So, uh, Pete Hex actually met with Ford and General Motors executives and, uh, talked about whether or not their plans could start producing weapons components, not entire weapon systems, uh, just components. No specific projects are currently being negotiated. This is still very early stage. This is the first time, this would mark the first time an automaker would be producing weapon systems or even components for weapons since World War II for the government. >> Well, this is very disturbing because it shows that the uh the US government is looking for more wars and producing massive weapons to fight them. And it's amazing just having raised the defense budget, like I said, by 50%. I mean, who are they going to use those weapons on? Just Iran? Well, at the moment, it looks like just Iran. But Iran is an isolated third world country, and we shouldn't have any beef with Iran. Yes, I know their regime is, you know, runs around saying using harsh language and so forth, but uh Iran's not our problem. Iran is Israel's problem. And it's like the Trump regime is trying to make Israel the 51st state of the US. which makes no sense. So, you know, I I Yeah, it's a problem. I mean, what kind of weapons can Ford and GM produce? Uh they shouldn't be producing weapons that are uh equivalent or usable the way these $7,000 drones that the the Iranians have. But no, we're going to produce more multi-billion dollar or or at least multi-million dollar weapons. It's a good way to bankrupt further an already bankrupt government, namely the US. >> Would you be long for GM stocks if Pentagon were to make a deal with them? >> I wouldn't be long I wouldn't be long really any US stocks at this point because by all parameters uh of what constitutes cheap and dear uh the US stock market is at or around an all-time high. Uh so I really have no interest in it. I'd like to have an interest in it and bargains will arise from time to time but um you know when um when the tide goes out uh everything goes out with it. So that even if you pick bargains in the US market right now uh if if we have another uh real like we did in 2008 you can lose 50% of your capital easily and of course this can happen to people that are invested like people like myself investing in commodity stocks too. It's a very tricky and dangerous uh environment we're dealing in financially >> when there is a war in the Middle East. it may be appropriate to pull out and dust off the covers of your book Crisis Investing, which was a bestseller in the late '80s. Now, my question is, is it a crisis for the US and American investors? Obviously, there's a crisis in the Middle East, but for those of us sitting in North America, does this apply to us? The principles of your book, are we in a crisis today just because there's a war halfway around the world? >> Uh, yes. Yes, we are. Because among other things, interest rates, which I point out, have been going down after reaching a peak in the early 80s, which as you'll recall were 15 to 18% for a US government paper. They've been going down and have gone down until 2022 when they reached almost negative levels. They've been going up since then. And my prediction, and I hesitate to predict the d direction of interest rates, uh, but I think in the coming years, we're going to see interest rates go back to the levels they were in the early 80s and beyond. So, you don't want to own bonds for that reason because bonds fluctuate inversely with interest rates. Uh, and they have other risks, too, like they're denominated in dollars, and the dollar is going to lose value in addition. And of course there's a default risk as well. Uh at least on everything other than US government bonds, although that's an open question at this point. So uh bonds are not good. But real estate real estate floats on a sea of debt. If you can't borrow money, you really can't buy or sell a house or anything else. But what's going to happen if I'm right about interest rates going up? Well, real estate's in trouble as well. So, okay, bonds, real estate doesn't look good. And the stock market, uh, I'm still of the opinion that the profleagy of governments for many years is going to result in a real depression. I call it the greater depression. That's not good for stocks. So, what are you what are you going to do to maintain your wealth? Well, it's a real problem because uh I think the whole world has been living above its means. It's been progressing tremendously with technology. I love technology. It's I'm a technophile. But um still uh even with good things like that happening, I think the general standard of living of the average guy is going to head down. Why? Because all the debt in the world means we've been living above our means. you've been borrowing from past production and mortgaging future production. That's what the debt is all about. And uh we're reaching the point where it's hard to service and hard to pay back. So that means the standard of living is going to go down. People have to start producing way more than they consume, which is not what they've been doing recently. That's shown by the fact that people just aren't saving anything. And the average guy they say is living paycheck to paycheck. So yeah, I take kind of a a a gloomy look on on on the world economy which makes me unhappy because at the same time as Ray Kerszswwell has said for years, we're at the edge of the singularity which is going to change everything. So there there's lots of contradictory indications out there. >> Okay. Well, the mobilization of um civilian infrastructure to produce munitions. Let's go back to that for just one minute. Uh is necessary because it's widely known amongst military circles that the US uh does not have the adequate munitions to fight a sustained conventional war. We are on borrowed time, said John Ferrari, retired army general who is now a non-resident fellow at the American Enterprise Institute. The Russians, the Chinese, the Iranians, everybody knows that we don't have enough munitions. This article from the New York Times later highlights the fact that during World War II, uh the plants around Detroit famously produced weapons, what Roosevelt called the Arsenal of Democracy. At its peak, the uh factory in uh that Ford owned produced one B24 liberated bomber an hour, but that was because uh engineers designed planes and other weapons to be built with the machines that Ford already owned. So, I'm not sure if that's applicable today. So, going back to your question, what are the solutions? They want to have any solutions. I think they need to figure out how to create bombs and munitions first. That's what the >> Yeah. Well, I'm not sure that that's the answer cuz what's the big war right now? It's Iran. Of course, the war between Russia and the Ukraine, which is again none of our business, I don't think. Uh, look, creating tanks. Okay. Use those to fight a ground war. Is that really is that really the up-to-ate technology in in their recent invasion of Lebanon? The Israelis have lost about 100 Marava tanks. That's interesting cuz the uh the Hezbollah fighters don't have any tanks, but the Israelis have lost 100 maravas presumably with most or all of their crews. So, I'm not sure tanks are something that GM and Ford should be manufacturing. That's like the last generation of weapons. And uh in the Navy, it's um uh aircraft carriers are the centerpiece of our battle fleets. We have a dozen more or less of them. But those things are equivalent to battleships before World War II. I mean, they're sitting ducks. They really can't be used and they're unbelievably expensive. Uh, so what kind of things are Ford and GM going to manufacture? Because you're fighting against people that are using very effectively $7,000 drones and missiles that are much cheaper than ours. Oh, and hypersonic missiles besides. So um the the whole character of war is is changing uh you know it's like that movie uh what was it where uh the computer came up with the answer the only way to win is not to play and surely the Pentagon has made a calculus as to what the pros and cons the the benefits and the cost would be. What benefit does this war have on the American taxpayer? >> Only a negative benefit. uh you build something and then you destroy it. That's real wealth that's used in building something and then destroying it. That's real wealth that could be used for productive things, a new factory of some type or a new consumer product of some type, but it's but it's blown up. Uh nobody nobody really wins in a war. Uh it reduces the overall standard of living. Yes, of course there's some technologies that get developed in in war, but that capital that's used to develop that would still be out there. Uh >> so the the the common I guess rationale for instigating this war is that Iran is a terrorist state. It's the world's largest sponsor of state funed terrorism. Well, that's what they say, David. That's that's that's what they say. >> That's what they say. >> But I don't I don't think it's true. Uh what has what has Iran really done? Uh yes, they blew up the Marine barracks in Lebanon, but wait a minute, what were 250 Marines doing in Lebanon? Uh it was Hezbollah, not Iran. But yes, Hezbollah is said to be uh guided by Iran. But what are American soldiers doing in these countries? I mean uh and I I think the most that they can put together over the last 50 years of people that have died directly and indirectly because of Iran or Hezbollah. It it's a very small number of people and and a vanishingly small number of Americans. And the Americans have brought this on themselves by whacking a hornet's nest in a part of the world they don't belong in. saying that it's the world's greatest uh sponsor of terrorism. That's just a meme that's uh floated by wararm mongers. >> Do the rationale what I'm getting with the rationale for going and given by the Pentagon and the White House press is that this is for national security. Do you feel safer? Do you personally feel safer now that the Iran uh the Iranian regime has been struck by US and Israeli forces? I think it's just the opposite of fighting terrorism. They're um the main way that the Iranians can fight back against high-tech powers is by using asymmetrical warfare and that will be styled terrorism. So what's going on in the uh straight of Hormuz right now is about the only response that the Iranians can effectively use. They are not so far uh sending teams to the US to blow up infrastructure, which they could do and will do if they're pushed far enough. But I think they're holding off on that because Trump, as wild and crazy as he is, might actually uh uh counterattack with with nuclear weapons against them. It's entirely possible. And incidentally, they say that they they're fighting this war partially to uh keep Iran from getting nuclear weapons. But this is this has been said for decades and they don't have nuclear weapons yet. But they will now because they can see that nuclear weapons are the only way they can basically hold off uh people from attacking them anyway. Anybody can get nuclear weapons. The North Koreans, the poor poorest country in the world, got them. Israel has had them for uh against intern all dictates of international law. They're not supposed to have them for 60 years. Uh Pakistan has them. This is kind of letting the cat out of the bag where where smaller countries say we need nuclear weapons. Otherwise, the big guys are going to walk all over us. So, this has been counterproductive from that point of view. What does your book Crisis Investing tell us about investing during times of distress and heightened uncertainty, which is exactly what we have now? No one knows how this will end or how long this world will last. No one knows how long the street of Hormuz will be closed and how high oil can go or how long it will stay high which by the way directly affects monetary policy from the Federal Reserve. >> Well, that book recommended precious metals and that's worked out really really well for the people that uh followed that portion of the advice in the book. But uh one thing that the book recommended is just as a philosophical mention is that the cause for the problems we're having is the expansion of the state. Uh it's been said for a long time that war is the health of the state and when any war is fought the government grows. It sets up new agencies. It sets up new controls. sets up new dictates in the national interest to win its war. But um and as states have grown and states have taken ever larger parts of the national income, you know, a 100 years ago, which is not that long ago, it's just there people still alive from from 100 years ago. uh the US government lived exclusively on excise taxes basically on alcohol and tobacco and import duties which were much less than the excise taxes. Now it basically controls the economy and this is true of all governments in the world. Canada is in even worse shape than the US from this point of view even though it doesn't have this giant military that it feeds. So the prognosis is not good. What we have to realize is it's the state is the state the institution of the state and the crazy kind of people that want to get into it. People that want to control other people that's the real enemy. It's not the Iranians for God's sake. They're just another country with some goofballs running it, which as I said, there's at least 20 or 25 other states in the world that are just as crazy. >> So your book in the 80s recommended gold is a safe haven. Uh go is gold still a safe haven especially after what we what the market saw with gold shortly after uh February 28th which is go down not up on the brink of on the brink of conflict. >> I'm not worried about fluctuations. Look the dollar itself is the unsecured liability of a bankrupt government. So, you don't want to own dollars and gold is the only financial asset that is not simultaneously somebody else's liability. You can make an argument for Bitcoin that way, but it's a relatively new asset that hasn't really stood the test of time yet, although I'm favorable towards Bitcoin for a lot of reasons. So look, gold is gold at $5,000 or 4,800, wherever it is today, is not the same investment or same asset, I should say, cuz it's not an investment. An investment is something that produces more wealth. Gold doesn't itself produce more wealth. It's money. Like a $100 bill doesn't produce more more wealth. uh at $4,800, it's not the same asset that it was at $40 an ounce. So, you have to take that into consideration. But where else are you going to put your capital with the problems that I've outlined in bonds and property and stocks? Where are you going to go at this point? >> I I guess cash. If inflation is not a concern, >> that's that's okay. except you you're you're going to lose the value of your cash by five and probably soon 10% per year. So that's not a good alternative either. This is why uh people are actually being forced to become speculators just to stay in the same place. They're forced to second guess what what's going to go up, what's going to go down in a desperate attempt to stay in the same place. Uh there's more activity uh from the retail public in the financial markets today probably than there ever has been in the past. Everybody's got a Robin Hood account, you know, uh instead of saving money, they put it in their Robin Hood or the equivalent and try to guess which stocks are going up. Well, they're not investing in stocks today or speculating in stocks actually because they're productive businesses that are going to grow. They're speculating in in them because they're thinking over the short term various forces will take the stock price up or down. Very different from uh the Graeme Dodd philosophy of Warren Buffett, which is another problem I I see in the market. >> What's what's the other problem, Doug? the fact that the the world is over financialized at this point >> and and and the average guy is actually forced to try to second guessess the market to stay ahead of inflation and the problems in bonds and stocks. >> Well, perhaps the safety play is to speculate, meaning go risk on right now. Go into stocks, go into tech stuff, go into, you know, uh mining equities. Maybe that's what's going to help you beat inflation in the long run. What do you think? Yeah, I listen I agree because that's what I do for a living is >> right >> I mean I'm a speculator by trade actually it's that um it's that a lot of things are pretty overpriced relative to other with all the debt in the world and all of the speculation people trying to stay ahead of inflation and beat the market somehow it it makes for an unstable environment A stable environment is one where people work to produce more than they consume and save the difference. But you really can't save today in fiat currencies, Canadian dollars, US dollars. I mean, you're forced to speculate. But most people are not suited to be a speculator. Most people confuse speculating with gambling. Uh they're two very different things, although they look the same. uh to to to the uh to the tyro to the beginner which most people are. I mean most people that are playing around in Robin Hood accounts and the equivalent uh have not taken the time to study the market. They've only heard that you can make money playing with these things and you can but they're using it as a casino not as a vehicle for creating more capital. I mean, that's the point I'm trying to make. >> Okay. If you were a long-term investor, not a short-term speculator, you'd probably want to know what the ne what the world order is going to look like in the next 20 to 30 years, or at least imagine how the world may change in the next couple of decades such that you can allocate your assets accordingly. Perhaps you might want to diversify internationally and go into jurisdictions that have the most growth as opposed to the ones that are most indebted and growing the least. Um, where is America in the next 20 to 30 years? What is America's role in the world in the next 20 to 30 years? In the last 70 years, the world was dominated by one hedgemon that basically policed the world and some would argue enforced stability and and allowed global trade to uh to happen without interruption. Um, this is now coming to an end according to some. I don't know if you agree with that view, but I want to broadly get your take on how >> Yes. Yes, I do. Because uh it's expensive to be uh an unplay unpaid policeman and patrol the world sea lanes and keep pirates from uh attacking shipping. Um, yeah. And the US can't do that anymore because the US government and large sections of the US society are actually bankrupt. They're like wy coyote that's walked off the cliff but hasn't fallen yet. And I think it's pretty much the same thing. So where should you go and what should you should you do? Uh I believe for the long term I think China is going to continue to rise and that's true of East Asia generally speaking. Uh their tax situation is much better than it is in the west. Their debt situation is much better. uh they don't have in any of these countries really uh a welfare system to support people that don't work. Uh they're sociologically homogeneous. Uh they're not taking in masses of migrants from alien cultures with alien values. So these things really augur well for East Asia uh at this point. And I hope that uh the US and Canada can turn themselves around, but the trend is still downhill. And it's really hard when you have a snowball rolling downhill and gaining momentum rolling downhill, which is what these governments have been doing. It's really hard to stop it until the uh giant snowball smashes the village at the bottom of the valley and then people have to, you know, pick up and start over again. But the bright side is Europe is in much worse shape than the US and Canada at this point. So uh I guess that's kind of a plus for us but um not really because the problem is western civilization itself is in decline. The values of western civilization are being washed away and denigrated and disparaged. And I don't know how you turn that around either because a lot of this comes through the education system where people absorb these you know uh Marxist values. So I think the current trend we're seeing in the world is going to continue and accelerate for some time. >> Would you be long US government bonds? >> Negative. Negative. I'd be short US government bonds. >> Do you think that Well, look at the long-term I think you alluded to this earlier. The long-term trend of the long end of the curve has been down. This has been a secular bull market for the bond market uh for several decades now. And um >> right since the early 80s. That's right. >> Are is this is this on the cusp of reversing, Doug? Well, if we look at that chart you've got up, David, I think that we're talking about 1920 2022 2022. Yeah. >> Is where we hit the bottom and it's been going up since then. So, yeah, we're headed back up towards the level of the left side of the chart. >> You you you have to wonder as a bond investor when the 10-year yield hits nearly 0% under 1%, what do you do at that point? Because the 10ear yield can't go negative. Do you do you It's literally rock bottom. >> Do you That's a paradigm shift in the 604 6040 portfolio doctrine entirely. >> Yeah. Well, I forget about the 6040 portfolio do doctrine. Um for the foreseeable future, bonds are a speculative vehicle. They're not something that you should put away and hold. Once again, the reason is that they're denominated in a currency, a dollar, and that currency is going to continue losing value at five, probably close to 10% per year in the future. So, you're losing ground faster than the bond is paying you interest. And uh it makes no sense. This is a relic of the past. Okay. >> Yeah. >> So, >> okay. What what >> lot of these a lot of these bonds are going to be defaulted on >> either directly because corporations can't pay them or indirectly uh which is what the US government is going to do by inflating its debt out of existence cuz look remember that the prime directive of every living thing from amiebas up to governments and especially governments is to survive any way that it can and the way governments survive is by taxing and inflation is a form of taxation in addition to direct taxation. So, uh you can expect taxes and inflation both to go up as big as the governments are today. >> So, if the bond market, specifically government bonds, are a relic of the past. Give us just end on this note. Give us a few ideas for the future besides gold. >> There's a tungsten mine. I'm not going to mention it that I'm thinking of investing and nobody's thought about tungsten, but tungsten's exploded upwards in value. It's a war mineral among other things. So, I look at that. I think the price of copper is a good place to be. Uh is telling me copper is a good place to be, I should say. And because copper mines are immensely uh capital inensive billions of dollars uh there's a certain agitation on on the part of mining companies to build copper mines because governments then treat them and NOS's too and NATO groups to treat them as milk cows. Uh and you can't move that copper mine the billions of dollars you put there still there. So, uh, I'm speculating in copper mines regardless of those downsides that I've just mentioned. Where else to be? Uh, uh, silver has been in deficit for the last five or 6 years. It's likely to stay in deficit for quite a while, and it's a high-tech mineral. It's the most reflective uh, of all minerals and the most conductive of all minerals. So that um silver has a place in the world other than in jewelry um and gold. I think the world is going to go back to using gold as money because uh you can't trust fiat currencies. So what are you going to use as a money as a medium of exchange? Well, gold has peculiar characteristics that make it uniquely well suited to be money. Yeah. So, I'll remain long gold. Look, but I can't wait for the time which will come. I hope I'm still alive when the world stabilizes and I can dump all this stuff and just buy common stocks and productive businesses. That's the way it should work. That's the way the world should work. >> Tell us where you can find your work, Doug. I mentioned the Duck Casey um crisis investing newsletter, which I can show on the screen right now. a lot of topical issues that you talk that you cover on a on a daily basis. >> Yeah, there's three things actually. One is internationalmen.com. Another is I have a YouTube channel called Doug Casey's Take. I've got a lot of things on YouTube. And the third is our paid subscription newsletter. The other two things are free, of course. Uh it's called Crisis Investing, crisisinvesting.com. So people should go there and browse around, see what they think. to all three of those things. >> Okay, great. Appreciate your thoughts, Doug. Thank you very much for coming on the show and I look forward to having you back on again. Take care for now. >> Thank you, David. I I hope you don't get too much hate mail because of the things that I've said. >> Uh that usually means you're doing something right. So, uh I don't I don't uh encourage people to shy away from hate mail. I do encourage people to keep the comments civilized in the comment section, please. But thank you anyway for watching. Please do reach out to Doug and check out Doug's work. links down below. I'll see you next time, Doug. And I'll see you next time to the audience. Thanks for watching. Don't forget to like and subscribe.