Doug Casey: What to Do in 'The Greater Depression'

Bullion and oil appear in the lineup of power players that Doug Casey thinks investors can count on as the world slips deeper and deeper into what he calls the “Greater Depression.” Despite the raging economic storm and Doug’s doubts that Western civilization’s governments will take the actions needed to quell it, though, the Chairman of Casey Research is nowhere close to calling the game. In fact, he sees silver lining in the clouds of crisis—opportunity—and expresses optimism that technological advances, coupled with capital rebuilding once over-consumption runs its course, will prevail eventually. The Gold Report caught up with the peripatetic author, publisher and professional international investor between polo matches in New Zealand, one of several nation-states he calls home from time to time.

The Gold Report: You’ve been discussing what you’re calling “crisis and opportunity,” and in fact have a summit by that same name coming up in Las Vegas next month. Could you give us a high-level overview of what you foresee?

Doug Casey: We’ve definitely entered what I describe as the Greater Depression. It’s not coming; it’s here. It’s going to get much, much worse as far as I’m concerned and unfortunately, it’s going to last a long time. It doesn’t have to last a long time, but the root cause is government intervention in the economy and everything they’re doing now is not just the wrong thing, it’s the opposite of what they should be doing. It’s almost perverse.

The distortions and misallocations of capital and the uneconomic patterns of production and consumption that have been going on for over a generation need to be liquidated and changed, but everything the government’s doing is trying to maintain these patterns. So it’s going to be horrible. In addition, the government is necessarily directing more power toward itself with all of its actions. If I were you, I’d rig for stormy running for a good long time.

TGR: By “a long time,” do you mean a couple of years, a decade, a generation?

DC: This is, in some ways, uncharted territory. Let me say that for the long run I’m very optimistic. Why? Two things act as the mainsprings of progress. Number one is technology and that’s going to keep advancing, so that’s very good. Second is capital and savings. Individuals will solve their own problems and, therefore, they will stop consuming more than they produce, which is what they’ve been doing for years, and they’ll again start producing more than they consume. The difference is savings; that builds capital.

So technology and capital are going to solve the depression. But the government can do all kinds of stupid things to make it worse. Look at the Soviet Union. They suffered a depression that lasted 70 years from its founding. Look at China. The whole reign of Mao was one long economic depression. That could certainly happen in the U.S., too, where the government misallocates capital in such a way that technology doesn’t advance as it could and people can’t build individual capital the way they would. I’m optimistic, but anything can happen.

TGR: But didn’t China and the Soviet Union have governmental structures very different from those in Western Europe and the U.S., and those structures allowed for more intervention? Are you projecting that we might slip into an era where Western civilization will allow their government to run themselves like the Soviet Union and China did?

DC: It seems to be going in that direction. Of course, Europe is going to be hurt much worse than the U.S. Europeans are much more heavily taxed and much more heavily regulated. The average European is much more reliant upon the state psychologically as well as economically. So it’s all over for Europe and this doesn’t even count the problems that they’re going to have in the continuing war against Islam, which are much more serious for Europe than they are for the U.S. So, no, Europe is fated to be nothing but a source of houseboys and maids for the Chinese in the next generation.

TGR: So do you think that societies in Western Europe—and even the U.S.—will allow themselves to be governed in the same fashion as the Soviet Union and China were during their depressions?

DC: Oh, totally. I don’t see why that would not be the case. Even Newsweek says we’re all socialists now. That seems to be the reigning ideology. In addition, psychologically, the average American—just like the average European—looks to the government to solve things. This is very bad. Most people are unaware that Homeland Security, which is one agency that should be abolished post-haste, is building a 400-acre campus in southeast Washington, D.C., where initially they’re going to put 25,000 employees. That’s as many as the Pentagon has and with 400 acres, Homeland Security has a lot more room to grow. Ironically, the property is at the site of St. Elizabeth’s Hospital, the first federal insane asylum in the United States. Once a bureaucracy has a piece of real estate and builds buildings, it’s game over. They’re just going to accrete and grow and grow, so that’s one indication. The trend is clearly in motion.

It’s all over for the U.S. In fact, let me say this. America doesn’t exist anymore. What is left is not even these United States. That was decided in the 1860s. It’s the United States. America, which is basically an idea, a concept, is dead and gone. The United States is just another of 200 awful little nation-states that have spread across the face of the earth like a skin disease. There’s no longer any difference that I can tell between the U.S. and any other country.

TGR: How would you describe the concept that America was based on that is now gone? And is there another country in the world embracing that concept? Will there be a new America?

DC: No, there is no other place. I’ve been to 175 countries and lived in 12. My feeling is that the best thing that you can do is set your life up so that you’re not to be considered the property of any one government. You might have a passport or several passports and, therefore, that government thinks they own you. But if you don’t spend time in a country, practically speaking, there’s nothing they can do about it.

So, no, there is no real haven for freedom in the world today. The best you can do is go where the governments are so unorganized that they can’t control you effectively. That’s one reason I like to spend time in Argentina. They have an incredibly stupid government, but they’re also very inefficient and ineffective. So it’s wonderful as a place to live. I also spend time in Uruguay, because it’s a tiny little country with no ambitions to conquer the world. The nice thing about New Zealand, where I am now, is that it’s a small country, only 4 million people, lots of open land. It’s got some severe problems, but it’s pleasant. I think the U.S. is going to be the epicenter of a lot of problems in the years to come.

TGR: Few of our readers are probably in positions where they could live in 12 different countries, but they have amassed assets here in the United States. What advice would you give them to safeguard those assets?

DC: The key is to remember that we’re going to have a long and deep depression, so most things that worked well over the last 20 years are unlikely to work well in the future. I’d been predicting the real estate collapse for a long time. It’s still got a way to go, too, because a lot of real estate debt remains that has to be liquidated. There’s a lot of leverage out there and there’s been a huge amount of overbuilding. So it’s far too early to get into real estate, at least in North America or Europe.

It’s also way too early to get into the general stock market, for all kinds of reasons. Dividend yields are still extremely low. Earnings are going to collapse. Government bonds are perhaps the worst single thing to be in, because with the government printing up money literally by the bushel basket, the dollar is going to start losing value radically and interest rates are going to start going up radically at some point. So you have to rule out most stocks.

I’m afraid that the most intelligent thing you can do is to own a lot of gold, preferably gold coins in your own possession. And I think speculation in gold stocks makes sense at this point, because gold stocks are about as cheap as they’ve ever been relative to other assets, really, in history. Now is an excellent time to do that as well. But that’s in terms of speculation.

Investment risk is tough enough, but the biggest problem is political risk. That’s what you have to watch out for. That means you have to diversify internationally. This is harder for most people, harder psychologically, and it takes more assets to make international diversification viable. But if you’re in a position to do it, it’s the most important thing you can do.

TGR: Since you mentioned having coins in your own possession, should we assume you’re not a big fan of the ETFs or some of these other paper gold promises, if you will?

DC: ETFs are okay for the convenience that they offer and for significant amounts of money, but gold coins should be first on your list, no question about that. If you’re only talking about $50,000 or $100,000, or $200,000, coins are fine to keep in your own possession. They won’t take up much room and you can put them in some safe place (which, incidentally, is not a bank safe deposit box).

TGR: Are you recommending putting all of your investment in gold into the bullion or are you also recommending some portion in producing junior and explorations?

DC: Both, but look at the stocks as being speculative. Most of your money should be in gold with a bit of silver, too. Silver is basically an industrial metal, but it has monetary characteristics. Now is the time to be very overweight in the metals and I think owning gold stocks is a good idea. They’re very cheap.

TGR: Anything else investors can do to preserve whatever may remain of their wealth?

DC: Owning real estate in some foreign countries is a very good idea—from a lifestyle point of view, an asset diversification point of view, and a possible capital gains point of view, too. They can’t make you repatriate foreign real estate. Having some U.S. dollar cash while we’re going through this deflationary period is very wise as well, but that’s not going to last. Eventually the U.S. dollar is going to reach its intrinsic value.

TGR: Not that you have a crystal ball, but how would you see the rest of ’09 playing out?

DC: Nothing goes straight up or straight down, but it seems that ’09 is going to see much higher gold prices and much lower stock prices and much lower bond prices, too. But remember, the worst is yet to come.

You haven’t heard an awful lot about people losing their pensions yet, but that’s going to happen because what are pensions invested in? They’re mostly invested in stocks and bonds and commercial real estate. All three of those things are disaster areas, and bonds are the big disaster area yet to come. So I think it’s going to be nothing but bad news in 2009. What happened in 2008 was just an overture to what I think is going to happen in ’09 and ’10.

TGR: Even into 2010?

DC: Yes. This isn’t going to be cured overnight, mainly because of what the government’s doing. As I said, it’s perversely exactly the opposite of what they should be doing, which is abolishing all the agencies and freeing up the economy. They’re passing lots of new regulations, they’re going to have to raise lots of taxes eventually, and they’re inflating the currency. So it has to last, at least into 2010. It’s going to be quite dismal, actually.

TGR: And what happens with the unfunded Medicare liabilities?

DC: They’re not going to be funded. They’re going to be defaulted on and, actually, that’s the best thing that could happen. That’s one of the things that should be done now; the U.S. government should default on its debt. This is shocking for people to hear, but it wouldn’t be the first time the U.S. government has done that. It did that almost at its founding in continental days.

This debt represents a tax liability that’s being foisted off on the next generations who have no moral obligation to pay and should not pay. I think as an ethical point, the U.S. should default on this debt. It’s impossible to pay it back, and it won’t be paid back. It’s more honest to acknowledge that bankruptcy now as opposed to pretend it’s going to be paid back. Defaulting even might forestall runaway inflation in the dollar, which would be a catastrophe of the first order. So it’s the smart and moral thing to do, and it’s going to happen eventually anyway. All the real wealth will still be here; a lot of it will just change ownership. The big losers will be those who lent to the State, thereby enabling its depredations, and they deserve to be punished.

But even a default tomorrow will do no good unless you put the U.S. government into reverse and disband all of these ridiculous, destructive agencies that have grown like a cancer for years. Taxes should be cut 50% to start with, just out of hand. And the defense establishment—it’s a misnomer; it’s not defense at all but rather foments wars around the world—should be cut hugely. Not with a butcher knife; but a chain saw. But none of this is going to happen; in fact, just the opposite. That’s why I’m so pessimistic now that the tipping point’s finally been reached.

TGR: Are we at the tipping point?

DC: Yes, we’ve absolutely gone over the edge. The consumer is no longer in a position to consume. Everybody is going to cut consumption to the bone and hopefully find something to produce instead. It would be better for people to start viewing themselves as producers than consumers. That would be a step in the right direction to get them psychologically more in line with reality.

TGR: In last fall’s meltdown, gold held up, but the stocks didn’t. Quite a few producers and soon-to-be producers, and some companies making discoveries, seem to have bottomed out in November and December. But worry persists in the market. Suppose another shoe drops or another black swan appears? Richard Russell (Dow Theory Letters) and others have been talking about the Dow going down to 5,000. What would that do to the gold stocks?

DC: Gold stocks are also stocks, and the best environment for gold stocks historically has always been when both gold and the stock market are going up. But since the last gold stock bull market came to an end, I think it’s entirely possible to see a bubble develop in gold stocks with all the money being created. I certainly hope so. I’m actually optimistic for gold stocks just because they’re so cheap relative to everything else.

TGR: They have been beaten down.

DC: Yes. And that fact, along with the waves of money being printed around the world and the much higher gold prices we are going to see, could cause a speculative mania to develop in the gold stocks. Nobody’s even thinking about that possibility right now, because they’re so battered. But this is the time to get into the right ones because it’s likely to happen in the future.

TGR: The ’29 crash—which was really the preamble, because ’30, ’31, ’32 and ’33 were certainly bigger—is when gold stocks such as Homestake did their best. How do you see that playing out this time around? Is it different this time or do you expect a similar pattern?

DC: You know what they say, “History doesn’t repeat itself, but it rhymes.” I think that, first of all, the gold mining industry is a much worse industry now than it’s ever been in the past, because just as all the easily defined light sweet oil basically has been discovered, all the easy-to-find high-grade gold basically has been discovered. Most mines that are going into production are low-grade, which means that you have to move a lot of dirt, which means that they’re much more capital-intensive than in the past. So gold mining’s a worse industry from that point of view.

Also, politically speaking, with the rise of the green movement, there are people who don’t want any oil burned, any dirt moved, any trees cut. They don’t want to see anything happen. This makes it much harder to do gold from a permitting and political point of view. We’re in a much higher tax environment than in the past. So it’s a tough industry. It really is. It’s just a 19th century choo-choo train type of industry that interests me only as a speculative vehicle. You’ll notice that gold went from lows of about $300 to highs of about $900 and none of these gold companies are making any money because their costs actually went up faster than the price of gold. So I’m not saying gold mining is a great business. It’s not. It’s a crappy business. Still, we could have a bubble in the stocks. I’m hoping we do.

TGR: Aren’t we going to see a change in that in ’09? Oil, which is one of the large components of that cost, has come down dramatically. A lot of these producers must be locking in oil at these lower prices. Won’t that translate into year-over-year earnings increases for the gold producers?

DC: That’s possible. The producers actually may show increases for the next couple of years. I don’t doubt that. But I don’t think oil will stay where it is. I think oil’s eventually headed back to $150 a barrel or more.

TGR: So why wouldn’t you own oil as well as gold?

DC: It’s a good idea, but we weren’t really talking about oil. I’d say that oil is a good thing to own. Oil is a real buy now. It’s as good a buy at $40 as gold is at $900 right now. Maybe a better buy; who knows?

TGR: If we go into worldwide depression, will oil continue to be a good buy or will it self-regulate around this $40 a barrel?

DC: I am bullish on oil. Although I’m philosophically not very sympathetic to the peak oil theory, I think it’s a geological fact. Also, China and India and the other developing parts of the world don’t use a whole lot of oil now. As they develop, they will to want—and almost need—to use a lot more oil. That’s going to keep pressure up on the demand side. But the supply side actually finally is constrained, so it’s going to mean higher prices. In a depression-type environment, U.S. and Western oil consumption could drop a lot, but the third world would take up most of that slack. So I have to be bullish on oil.

TGR: Are you bullish on any other sectors or commodities?

DC: I’m bullish on agricultural commodities. They ran way up last year and then collapsed again. I think a good case can be made that most of the soft commodities are quite cheap and will go higher, so I’d look at those, too. I think gold definitely, oil in the years to come has the potential to go much, much higher, and the agricultural commodities have a lot of potential.

TGR: Gold appears to be uncoupling from the dollar. Historically, when the dollar was strong, gold would be weak. But we’ve had a couple of recent instances in which both the dollar and gold have been strong. Obviously, we’ve seen a total decoupling of gold from oil. It used to be when oil was running, gold was running and vice versa, but that no longer seems to be the case. Is that just an old wives’ tale or is something going on?

DC: I’ve never seen any necessary relationship between gold and oil, just like there’s no necessary relationship between rice and natural gas, or nickel and soybeans. All these commodities tend to move together, all the currencies tend to move together and stock markets tend to move together, but they all have their own dynamics. I think it makes sense to compare the relative prices of various commodities and see what may be cheap or dear relative to other things based on the fundamentals.

On any given day, somebody may have to buy or somebody may have to sell a huge amount of almost anything. It’s unpredictable and you can’t tell what constraints are out there in the market. I don’t even pay attention to day-to-day fluctuations because they’re just random noise. I watch the big trend. It’s been shown that if you just made one correct trade and stuck with it at the beginning of every decade for the last four decades, you would have realized something like 1,000 times on your money. To me, this is the proper approach to the markets, not to try to second-guess from day-to-day what’s going to happen. That’s foolish because you get chewed up with commissions and bid-ask spreads and double-thinking your own psychology and so forth.

I really just like to look at long-term trends. In terms of long-term trends, you’ve got to be long gold, long silver, long oil; you’ve got to be short bonds. I think that’s really all you need to know. The other things we mentioned such as agricultural commodities and so forth are worthy of attention. But, as I said, I’m not a day-to-day trader. I think that’s very foolish.

TGR: Are these the themes that you and your group of speakers will focus on in Las Vegas?

DC: They are. I certainly want to invite anybody who reads this interview to join us. We put on very small, very classy seminars. They’re not gigantic mob scenes, so it’s possible to get to know individual speakers and fellow attendees in a very collegial atmosphere. I think it’s something that anybody who’s seriously interested in these kinds of things should consider.

The Casey Research Crisis & Opportunity Summit, will be held March 20 - 22, 2009, at the Four Seasons Resort in Las Vegas.

A citizen of the world in more ways than most of us can imagine, Doug Casey, Chairman of Casey Research, LLC, is the international investor personified. He’s spent substantial time in about 200 different countries so far in his lifetime, living in 12 of them (currently New Zealand and Argentina). And Doug’s the one who literally wrote the book on crisis investing. In fact, he’s done it twice. After The International Man: The Complete Guidebook to the World's Last Frontiers in 1976, Doug came out with Crisis Investing: Opportunities and Profits in the Coming Great Depression in 1979. His sequel to this groundbreaking book, which anticipated the collapse of the savings-and-loan industry and rewarded readers who followed his recommendations with spectacular returns, came in 1993, with Crisis Investing for the Rest of the Nineties. In between, his Strategic Investing: How to Profit from the Coming Inflationary Depression (Simon & Shuster, 1982) broke records for the largest advance ever paid for a financial book. Bill Bonner (The Daily Reckoning) describes Doug as “smart, hard-working, and extremely knowledgeable” with “an instinct about investments that has made him and many of those around him very rich.”

Doug, who now spends more time as an expatriate than he does on American soil, has appeared on NBC News, CNN and National Public Radio. He’s been a guest of David Letterman, Larry King, Merv Griffin, Charlie Rose, Phil Donahue, Regis Philbin and Maury Povich. He’s been the topic of numerous features in periodicals such as Time, Forbes, People, US, Barron’s and the Washington Post – not to mention countless articles he’s written for his own various websites, publications and subscribers.

Comments

[Perky]

I make no judgment on the investing advice offered here, but the political analysis is worse than foolish -- it's (to quote Mr. Casey) "almost perverse." To compare the United States in 2009 to the Soviet Union is a fine example of the way ideological commitments trump intelligence. I wonder why Mr. Casey lives in New Zealand, with its "socialist" medical system? Please . . .

2009 Feb 25 09:50 AM

[bluesmoke]

Good interview. Mr Casey always presents an interesting viewpoint. Thanks.

2009 Feb 25 10:00 AM

[Mad Hedge Fund Trader]

Gold finally hit a wall just above $1,000, and instantly melted $50. For many traders who got in just above $700 three months ago, it’s time to say thank you very much to Mr. Market and either wait for a substantial pull back, or go on to the next trade. It was taking increasingly larger purchases of physical gold by ETF’s and coins by individuals to push the price up. CME statistics showed the speculators’ position soared to a net long of 215,661 contracts ($21.5 billion). The SPDR Gold Trust ETF (GLD) added five tonnes of the barbaric relic to 1,029 tonnes in just one day. The turnaround neatly sets up a double top on the long term charts with the high set last year. It may take a couple of more runs, and more bad news, which seems in abundant supply, to get the yellow metal to a true new high.

2009 Feb 25 11:36 AM

[nana1]

A lot of contradicting statements and wrong.
Statement that "producing more than consuming more" will improve situation is wrong.
Also statements that consuming more than producing more is wrong too.

The best statement would be that production = equals consumtion. It menas balance.
The best is balace , supply = demand
Balance budget, balance trade and so on. Who is contradicting that?
Supplying more causes deflation - see prices of houses going down.
Consuming more is causing inflation as it was seen in Real Estate buble.
Note that in USA we produced more housing than we can consume as a result of increased demand where consumption is more than supply.
No other country in the world can produce so much at such speed and lowest possible cost due to technological advancement.
No country is able to compete with USA. We have capital and knowledge and freedom, technological advancement.
USA, we consume all word- this is imports, it means USA capital is allocated on the global scale and these countries are getting reacher at the cost of USA.
If USA capital will come back to USA, reduced imports, USA economy will bloom, I mean import must be equal = to exports . Balance trade again.
Other countries , mainly exporters have a lot too loose when they export less. We USA have the best position.

Banlance trade
balance budget
supply = demand.

All above are statement that should be but they are not and hard to accomplish.
But this is the fact and this free market is working this way to correct by itself - recession) and the help with government.
Why government help?
This is the question I am asking myself.
Because nobody is perfect and nothing is balanced I thing that someone has to watch and regulate how capital or taxes are allocated to the benefit of all people.
Government should be small and efficient and serve the people.
Now we are in ressesion again as a result of excessive production in real estate. Prices went down to the balance level. There is cost to it , people who made wrong decision are paying for this , people who are buying now , they will gain. , so losses = gain, and this is balance.
We are about to come back to balanced economy again. Recession is almost over.
USA- we are the power, we have resources, we the best, nobody will be ever able to compete with us , becuse it is not enough to have money for example from oil like Russia or OPEC country. They will always consume and fail because their system is not able to create and produce anything in such efficient way, excessive consumption always and inflation, lack of investments and production almost in all areas.
I am asking , is there any country in the world that produced so many houses at such low cost. Is there any country were you can buy a house at such low price?.
Answer - none of the above.

2009 Feb 25 12:07 PM

[Jake2]

Take all of this talk of Armageddon and gold with a grain of salt.

2009 Feb 25 12:08 PM

[nana1]

Gold- gold price will go down to 500 -600. The theory is if something goes up in 90 degrees level up , it must correct to 20 degrees. See this on the graph.
Long term is up, but not in such speed and amount like Real Estate.
Remember my words, and look at real estate, oil prices, other commodity prices , stock prices

2009 Feb 25 12:17 PM

[Jubilee Year]

I commend Mr. Casey for the calling U.S. debt default a moral obligation. He is correct. It is immoral to sell your children into slavery. Instead of paying for their own lives and problems, the current political class is trying to foist such payment off on their children.

As for calling the US more socialist than the Communists, he is correct. In China today, for example, individual citizens have to pay for their own healthcare and retirement. Thus, they save, providing their economy and government the capital to invest in their future strength.

Meanwhile, the U.S. government is planning on increasing social expenditures, tripling the deficit, while expanding socialized medicine, while attempting to "jump-start" debt-based consumerist spending, in the teeth of a Greater Depression.

The root of every hyperinflation is the same: a government that refuses to face economic reality. Tell me how we are not there?

2009 Feb 25 12:53 PM

[cylin]

1. I observed: volatility of oil > volatility of oil company stocks; volatility of gold < volatility of gold company stocks. Is this true?
2. Can anyone explain #1 to me?

2009 Feb 25 02:50 PM

[Conan the Barbarian]

In the 70s Doug Casey and others felt that the CFR was a secret society intent on making Corporations the behind the scenes controllers of all Governments throughout the world but specifically in the USA.

A world bank and currency to match would end the distinction between Governments.

At least, that's the way I remember it. But its been 30 some years, and I thought he was dead.

2009 Feb 25 03:44 PM

[TERN]

The debt of today foisted on the next generation of taxpayers.

Even without the homeland security concentration camps that Doug Casey may see just around the corner, the advice to own real estate in several not too over-regulated countries around the world makes good sence.

It allows those hapless taxpayers of the future to vote with their feet.

2009 Feb 25 05:14 PM

[Bad Dog]

I agree. This interview was just laughable in its political analysis and its economics. Truly a waste of good internet.


On Feb 25 09:50 AM Perky wrote:

> I make no judgment on the investing advice offered here, but the
> political analysis is worse than foolish -- it's (to quote Mr. Casey)
> "almost perverse." To compare the United States in 2009 to the Soviet
> Union is a fine example of the way ideological commitments trump
> intelligence. I wonder why Mr. Casey lives in New Zealand, with
> its "socialist" medical system? Please . . .

2009 Feb 25 07:32 PM

[jljamup]

My comment on this article is that the truth can be found, if you just read the poem, CASEY AT THE BAT. I SUGGEST YOU GIVE IT A GOOGLE. if this generation had that attitude the problems of today would be solve themself .

2009 Feb 26 02:51 AM

[Roman_Fiddler]

Very interesting interview, thank you. While not everyone will agree with Mr Casey's view, I think there is certainly merit in his recommendation to own some gold (at home), and to diversify in other countries if possible. It never hurts to at least attempt to have some form of insurance/nest-egg.

2009 Feb 26 03:43 AM

[akapital]

No comments on Gold but the political, social, and economic view points are just crazy. But I like it. I think it is great that we get to ready some totally off the wall stuff on SA. You're not going to find this stuff in mainstream so why not. I think we all hold some pretty wacky views of our own...and some of the statements in the interview are indeed wacky...but makes you think anyway.

2009 Feb 26 07:20 AM

[Conan the Barbarian]

Think in terms of Insurance. Never be fully out of Gold/Silver, preferably Gold.

Leave trading to others, "Never leave home without out it". ( the commercial was on American Express but I am applying to Insurance.)

It doesn't do any good to reinstate your Insurance Policy after the Crash.

2009 Feb 26 07:28 AM

[Beach Bubba]

I, for one, agree with some of Casey's meandering rant...I am rather underfunded (poor) in any opinion; yet, I live in both Mexico and Texas legally (I have lived in several Central America countries). I find the third world has sub-economies or local economy, if you will, that allow the folks living there little change in life style when their economies experience distress. There is no problem to go to rice and beans when that is your constant diet.

I buy silver coins minted in Mexico by the rolls as insurance against a runaway inflation that often happen in banana lands,,,see Argentina. I buy mining stock and etfs....I plan to survive until I die....no more than that. Land in Mexico has never gone down....nor will there ever be a housing bubble. Real estate takes the place of CDs....if there is an emergency sell a lot or two....it is done that way here by rich and poor alike. I feel your pain. Eat Mo Mango.

2009 Feb 26 07:40 AM

[Conan the Barbarian]

Does anyone remember Richard Ney? The Stock Market Observer. He always believed in a Specialist Conspiracy.

It took some 20+ years but he was proved right on Specialist Front running.

2009 Feb 26 08:28 AM

[Vegasjoe]

That the 21st century belongs to China is an understatement becasue as they sit on $1.6 trillion of US securities, and are awash in trade surplus, they launch a true catalyst not paid for with debt, a $700 billion infrastructure package to stimulate jobs, the 20 million lost so far, and boy they could benefit from US know how in building homes near quake fault lines, factories that do not pollute as much, and an interstate highway system rivaling the USA. Why did Casey not mention TIPS? Printing large amounts of money we do not have normally results in hyper inflation sometime down the road, right?

2009 Feb 26 08:45 AM

[Dean M]

Forget economics, if we 'hired' the debt, then we have a moral obligation to pay it. Casey is critical of the current morality but his prescription to cut taxes 50% and walk away from our debt is emblematic of the pervasive attitude in this country, ie lack of responsibility. How about we do the right thing, tighten our belts and leave our kids a country in as good shape as the one we got instead of trying as he suggests to grab what we can before the ship sinks.

2009 Feb 26 09:17 AM

[TomF75]

Not to play Devil's advocate here, but in the last paragraph where it mentions the authors previous books:

Crisis Investing: Opportunities and Profits in the Coming Great Depression in 1979...in 1993, with Crisis Investing for the Rest of the Nineties. In between, his Strategic Investing: How to Profit from the Coming Inflationary Depression (Simon & Shuster, 1982) broke records for the largest advance ever paid for a financial book.

It seems to me that whenever this guy comes out with a book about "crisis investing" the crisis is pretty much over.

Great Depression in 1979...umm don't think I recall that one?

Crisis investing for the 90's...yeah with the exception of that LTC/Asian blip in '98 I think that was a pretty good decade for equity investors

Coming Inflationary Depression in 1982...Does it count if the author is 28 years to early?!?!? I mean a broken clock is right two times a day after all.

I don't deny that the US and Western Europe have some serious structural deficiencies to deal with, but it seems like if you followed this guys investing advice you would've had to hawk your possessions at the nearest pawn shop a long time ago.

2009 Feb 26 09:49 AM