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OfflineYrat
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Registered: 11/08/07
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Doug Casey: How To Prepare For When Money Dies
    #15142970 - 09/27/11 05:06 PM (12 years, 4 months ago)

Quote:

An eye-opening interview with renowned speculator Doug Casey, conducted by Karen Roche and JT Long of The Gold Report. Doug explains why fiat currencies around the world are destined for collapse… and what investors can, and should, do to protect themselves. 

Doug CaseyIf dollar-dumping turns from a trickle into a flood, look out. Exploding prices (aka exorbitant inflation) resulting from the devaluation of the dollar will compound the problems we saw in 2007–2009. Catastrophe will come when everybody realizes that the dollar is an "IOU nothing." That's the downside in the decade(s) ahead, according to Casey Research Chairman Doug Casey. But an optimist at heart, in this exclusive interview with The Gold Report, Doug also identifies some reasons to be hopeful.

The Gold Report: You've been talking about two ticking time bombs. One is the trillions of dollars owned outside the U.S. that investors could dump if they lose confidence. And the other is the trillions of dollars within the U.S. that were created to paper over the crisis that started in 2007. Are these really explosive circumstances that will bring catastrophic results? Or will it just result in a huge, but manageable, hangover?

Doug Casey: Both, but in sequence. One thing that's for sure is that although the epicenter of this crisis will be the U.S., it's going to have truly worldwide effects. The U.S. dollar is the de jure national currency of at least three other countries, and the de facto national currency of about 50 others. The main U.S. export for many years has been paper dollars; in exchange, the nice foreigners send us Mercedes cars, Sony electronics, cocaine, coffee—and about everything you see on Walmart shelves. It has been a one-way street for several decades, a free ride—but the party's over.

Nobody knows the numbers for sure, but foreign central banks, and individuals outside the U.S., own U.S. dollars to the tune of something like $6 or $7 trillion. Especially during the recent crisis, the Fed created trillions more dollars to bail out the big financial institutions. At some point, foreign dollar holders will start dumping them; they are starting to realize this is like a game of Old Maid, with the dollar being the Old Maid card. I don't know what will set it off, but the markets are already very nervous about it. This nervousness is demonstrated in gold having hit $1,900 an ounce, copper at all-time highs, oil at $100 a barrel—the boom in commodity prices.

Some countries are already trying to get out of dollars, but it could become a panic if the selling goes from a trickle to a flood. So, yes, it's a time bomb waiting to go off, or maybe a landmine waiting to be stepped on. If a theatre catches fire and one person runs out, soon everybody rushes toward the door and they all get trampled. It's a very serious situation.

TGR: If panic erupts on the U.S. dollar, would products manufactured in the U.S. become super-cheap or super-expensive?

DC: They would become super-cheap. Everybody says that devaluing the dollar will stimulate U.S. industry because the products will become cheaper and foreigners will buy them. This is a huge canard everybody repeats and nobody thinks about. Yes, it is true for a while, but if devaluation were the key to prosperity, Zimbabwe should be the most prosperous country in the world as it has already collapsed its currency.

A strong currency is essential for a strong economy. Sure, a strong currency can hurt exporters for a while. But, a strong currency encourages manufacturers to invest in technology, and become more efficient. It rewards savings and results in the growth of capital that's critical for prosperity. A strong currency allows businessmen to buy foreign companies and technologies at bargain prices. It results in a high standard of living for the country, and yields social stability as a bonus. The idea that decreasing the value of currency to stimulate exports is a short-lived, stupid and counterproductive solution to the problem. People seem to forget that while the German currency was rising about sixfold from its level of 1971, and the Japanese yen about fourfold, those countries became the world's greatest export economies. It didn't happen despite a strong currency, but in large measure because of it.

TGR: Given that the U.S. is the world's biggest consuming nation, wouldn't fleeing the dollar create a big consumer vacuum in the international community? Doesn't the rest of the world want to keep up the high level of exports to these U.S. consumers?

DC: That's exactly why the U.S. is in such trouble; it's idiotically focused on consumption, while only production can create prosperity. The world doesn't need to stimulate consumption. This is another canard, because everybody has an infinite desire for goods and services. I know for myself, I'd like not just a car, but 10 Ferraris, a couple of Gulfstreams and 10 houses around the world. So, by myself, I have an infinite desire for goods and services. Multiply that by 7 billion other people. The only way to gratify those desires is by producing enough to trade with other people to give you what you want. When so-called "economists" think the problem is that we don't have enough consumption, that shows that the profession itself is bankrupt. It's actually quite embarrassing.

TGR: But other countries currently produce enough of what the U.S. wants. With U.S. dollars, that trade won't look good on their side eventually.

DC: The problem is the U.S. doesn't produce enough in return. The U.S. has been lucky to have a currency that has, so far, been accepted by everybody. But when everybody realizes that the dollar is an "IOU nothing" on the part of a bankrupt government and a society that doesn't really produce anything anymore, it's going to create a worldwide catastrophe. Those $7 trillion held by foreigners are going to become instant hot potatoes.

TGR: Considering what you said a moment ago, that the world doesn't need to stimulate consumption, you must find some irony in the Obama administration's plan to stimulate consumption again in the U.S. as a way to spur some economic growth.

DC: I'm afraid that after being counseled by the fools that surround him, Obama talking about economics is like the blind leading the doubly dismembered. They want to spend $450 billion trying to create new jobs—but these are government jobs, where you have people digging holes during the day and filling them up at night to create the appearance of employment. No government has any idea what the market really wants and needs. There should be zero government involvement in this. The government cannot and should not even try to create jobs. If Obama wants to stimulate the economy, he can decrease the size of the government. I would say a 90% reduction would be a good starting figure.

TGR: But that will create even more unemployment. That's one of the big concerns. States laying off employees could increase unemployment even more.

DC: It is wonderful that states are starting to lay off employees. Once they lose their state jobs, which suck wealth from taxpayers, maybe those people can find real, productive jobs providing goods and services that people actually want and will pay for voluntarily. So I'd argue that getting rid of state employees is essential to a sound recovery plan.

TGR: You warned early on in the 2008–2009 economic crisis that it would really be more of a hurricane. In the last year or so, we've been in the eye of the hurricane and there's more turmoil to come. Will the other side of the storm be worse than the first? And given the recent economic news, do you think we have moved out of that eye?

DC: Yes, I think we are moving out of the eye and going into the other side of the storm. This storm will be much more severe because we haven't solved any of the problems that caused the hurricane in the first place. The fact that governments all over the world have created trillions of currency units has only aggravated those problems. Now, I expect exploding prices to compound the problems that we saw back in 2007, 2008 and 2009. That will devastate the prudent people in society who saved money. They saved it in the form of currency, and wiping out their savings will be catastrophic.

TGR: Will this affect only North America and Europe?

DC: Mostly North America and Europe, but it's going to be very serious in Japan, too. It could be even more disastrous in China. The Chinese real estate market bubble is very inflated, driven by the lending of Chinese banks that won't be able to recover their loans. They will all go bankrupt, taking out the Chinese populace's savings with them. At the same time, those who own real estate will find it worth vastly less than what they paid for it. Those problems will create social disruptions in China, leading to riots, perhaps even revolution, and who-knows-what. The fallout is going to be terrible.

TGR: Many pundits and economists still project growth in China, albeit at a lower rate, and anticipate further expansion of the middle class.

DC: The 21st century will be the Chinese century, but the distortions and misallocations of capital that have occurred over the last 30 years—notwithstanding the truly phenomenal progress the country has made—are serious and have to be washed out. I am a huge bull on China for lots of reasons, but I am bullish for the long run. I think it is going to go through the meat grinder over the next 10 years. I don't know how it will come out; maybe China will break up into five or six different countries. Actually, that would be a good thing. Most of the world's nation-states are artificially constructed and too big to be manageable as political entities.

TGR: Your outlook on China fits right in with something you've been saying for years—about this being the "Greater Depression," which is also the topic of your upcoming presentation at the sold-out Casey Research/Sprott Inc. "When Money Dies" summit next month in Phoenix. Your opening general session talk is entitled, "The Greater Depression Is Now." We are now four years into it, based on your 2007 start date.

DC: Actually, depending on how long a historical scale you look at, you could say that, for the working class in the U.S. anyway, the depression started in the early 1970s. After inflation, after taxes, their take-home pay hasn't risen in real terms for 40 years. But the definition of a depression that I use is "a period of time during which most people's standard of living drops significantly."

Net savings shows that you're living within your means and putting aside capital for the future. In the U.S., people have been living above their means for many years—that is what debt is all about. Debt means that you are borrowing against future production, which is exactly what the U.S. has been doing.

TGR: So, how long will this Greater Depression last?

DC: It doesn't have to last long at all. It could be quite brief if the U.S. government, which is basically the root cause, retrenches vastly in size and defaults on the national debt, which is essentially an enormous mortgage, an albatross around the neck of the next several generations of Americans. The debt will be defaulted on one way or another, almost certainly through inflation. I simply advocate an honest, overt default; that would serve to punish those who, by lending to the government, have financed its depredations. Distortions and misallocations of capital that have been cranked into the economy for many years need to be liquidated. It could be unpleasant but brief. The government is likely to do just the opposite, however. It will try to prop it up further and make it worse—compounding the problem by expanding the wars. So, it could last a very long time. In that sense, I'm not optimistic at all. I think there is little cause for optimism.

On the other hand, I'm generally optimistic for the future. There are only two causes for optimism. First, smart individuals all over the world continue, as individuals, to produce more than they consume and try to save the difference. That will build capital, which is of critical importance. They should just save by holding paper currency. Second, expanding and compounding technology will increase the standard of living. Remember that there are more scientists and engineers alive today than have lived in all previous history combined. Those two factors countervail the government stupidity around us. Whether they will be overwhelmed and washed away by a tsunami of statism and collectivism, I don't know.

TGR: You say that the U.S. government is the root cause of this problem. Isn't that putting too much blame for a worldwide problem on one nation?

DC: The institution of government itself is the problem, and the problem is metastasizing like a cancer all over the world. But, sad to say, the U.S. is the most serious offender because it is currently both the most powerful and the most aggressive nation-state. It has been greatly abetted by the fact that the U.S. currency has been accepted globally. The U.S. dollar is, in effect, the reserve that backs all the other currencies in the world. That is why the U.S. government has been the most destructive from an economic point of view. Furthermore, military spending—which in the U.S. equals that of all the other militaries in the world combined—is purely destructive. It serves no useful economic purpose at all. The military is no longer "defending" anything—least of all liberty. It's actively creating enemies and provoking conflict. So, yes, I think the U.S. government is actually the most dangerous force roaming the world today.

TGR: Do you see that changing after the next election?

DC: No. I think the chances of Obama being reelected are high, simply because more than half of Americans are big net recipients of state largesse. The U.S. has turned into a larger version of Argentina politically, where the electorate is effectively bribed to vote for the biggest thief. It is likely to turn out much worse than Argentina, however. Unlike the Argentines, the U.S. government is fairly efficient. And, unlike Argentina, the U.S. is rapidly turning into a police state.

Electing a Republican might be even worse, though. With the exception of Ron Paul and Gary Johnson, the potential Republican candidates absolutely make my skin crawl. So, no, there is no help on the horizon. The U.S. government is spending about $1.5 trillion more this year than it takes in, and it is not going to cut that. In fact, foolish spending to bail things out will increase. And, worse than that, the Fed has artificially suppressed interest rates for three years. Interest accounts for roughly 2% of $15 trillion official national debt, or $300 billion per year. As interest rates inevitably rise, that interest amount will grow. At 12%—and I'm afraid they'll have to go even higher than that—it would add another $1.5 trillion just in interest payments.

I absolutely see no way out without a collapse of the U.S. currency and a total reordering of the U.S. economy.

TGR: When Money Dies, the title of your summit, implies some return to a gold standard. How do you see that playing out?

DC: Nothing is certain, but when the dollar disappears—and it's going to reach its intrinsic value soon—what are people going to use as money? Will we gin up another fiat currency like the euro? The euro is likely to fail before the dollar. My suspicion is that people will want to go back to gold. It's not because gold is anything magical, but simply the one of the 92 naturally occurring elements that—for the same reasons that make aluminum good for planes and iron good for steel girders—is most useful as money. In fact, the reason that gold has risen as high as it has is that the central banks of third-world countries—places that don't have large gold reserves, such as China, India, Korea, Russia, even Mexico—have been buying the stuff in size.

TGR: The concept of going to a gold standard seems impossible in the sense that there is only so much gold above ground—6 billion ounces? Maybe $11 trillion worth? But it's only a fraction of the U.S. GDP. Even with gold at $2,000 an ounce, that leaves an immense gap. In that scenario, how do you convert to a gold standard?

DC: In terms of today's dollars, gold should probably be a lot higher than it is. I don't know what the number will be, because a lot of those dollars will disappear in bankruptcies; they will dry up and blow away. It's like a real estate development that was worth $1 billion on somebody's books; when it fails, that's $1 billion destroyed. It's a question of the battle of inflation (with the government creating dollars to prop things up) against deflation (where businesses fail and wipe out dollars). But put it this way: the U.S. Government reports it owns about 265 million ounces. Its liabilities to foreigners alone are at least $6 trillion. If they were to be redeemed for a fixed amount, that would require roughly $22,000/oz. gold. And that doesn't count dollars in the U.S. itself.

I'm a bargain hunter and a bottom fisher, and bought most of my gold at vastly lower prices. But I think gold is going much higher because most people still barely even know that the stuff exists. As inflation picks up, they are going to want to get rid of these dollars—but what other monetary commodity can they turn to? So, gold is going higher. I'm still accumulating gold.

TGR: You said that the storm as we emerge from the eye of the hurricane will be worse than it was on the other side. If they don't own gold, how do investors protect themselves?

DC: It's very hard to be an investor in today's world because an investor is someone who allocates capital in a way to create new wealth. That is not easy in today's highly taxed and regulated economy. It's late in the day, but not too late, to buy gold, silver and other commodities. Productive assets are good to own. Of course, the easiest way to buy most productive assets is through the shares of publicly traded companies, but the stock market is quite overvalued in my opinion, so that's not the best option right now.

In addition to trying to build personal holdings of gold and, to a lesser degree, silver, I think people should learn to be speculators. This is not to be confused with gamblers, who rely on random chances. Speculators position themselves to take advantage of politically caused distortions in the marketplace. In a true free market society, you would see very few speculators because there would be few such distortions. But regulations, taxes and currency inflations are likely to keep markets very volatile. Good speculators will position themselves to take advantage of bubbles, and identify bubbles that have been blown to their maximum and are about to deflate.

Government actions are going to force people to become speculators, whether they like it or not. Most won't like it, and very few will be good at it.

TGR: What bubbles might speculators look to exploit?

DC: I'd say the world's biggest bubble is real estate in China, but real estate bubbles are just starting to deflate elsewhere, too—in Australia and Canada, for example. It's relatively hard to short real estate, of course. Shorting bank stocks is an indirect way to play it. I'd say bonds are the short sale of the century. They're going to be destroyed. Bonds pose a triple threat to capital because:

    Interest rates are artificially low, and as interest rates rise—which they must—bonds will fall.
    Bonds are denominated in currencies, and most currencies, let's say dollars, are going to lose a lot of value.
    The credit risk of most bonds, certainly those issued by governments, is high.

On the long side, mining stocks are very cheap relative to the price of gold right now. I'd say there's an excellent chance of a bubble being ignited in gold mining stocks, especially the small ones; in fact, I'd put my finger on that as likely being the easiest way to make a killing.

TGR: Technology was one of the two areas of optimism you mentioned earlier. Do you see a bubble forming there?

DC: You have a point, but I'm not sure you can talk about technology stocks as a whole; technology is too variegated, too vast a field. Although, I've long been a huge believer in nanotech, which is likely to change the world as we know it. With gold stocks, however, you can jump into a discrete universe, that's likely to become a mania.

TGR: Thank you for the tips, Doug, and as always, for your thoughtful insights.




http://www.zerohedge.com/news/doug-casey-how-prepare-when-money-dies


--------------------
"There are a thousand hacking at the branches of evil
to one who is striking at the root."
-Henry David Thoreau
Strike The Root


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Invisibleunknown1123
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Registered: 05/15/08
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Yrat]
    #15171810 - 10/03/11 01:26 PM (12 years, 3 months ago)

:strokebeard2: good read.


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OfflineYrat
Hello

Registered: 11/08/07
Posts: 2,312
Last seen: 2 years, 10 months
Re: Doug Casey: How To Prepare For When Money Dies [Re: unknown1123]
    #15172992 - 10/03/11 05:55 PM (12 years, 3 months ago)

Quote:

Where is the US and global economy going? What will happen to the dollar and euro? And how can investors protect themselves from the fallout? All these questions and more were answered at the Casey Research/Sprott, Inc. Summit When Money Dies. Kevin Brekke reports live from the conference…

The vibe had changed noticeably. Waiting patiently to receive my morning fix from the lobby barista, a sense of anticipation charged the air that was absent the previous day. The dress code had undergone a transformation as well, a little more “resort snappy” with the coveted Casey Research lanyard and badge the accessory du jour. And the main presentation room was beginning to fill early with attendees intent on procuring a seat at the front of the room. A subdued murmur of warm conversations among new and old acquaintances presaged another hot day in the desert.

Yes, this was the day… summit kick-off day.

The official starting hour neared, the packed main presentation room fell silent as David Galland, the summit’s host, approached the podium and introduced the first speaker and our company’s namesake, Doug Casey.

The roar of applause cut through the excitement as Doug took the stage. And from the first words, his inimitable style, wit, and unique insight were front and center.

Casey Research subscribers are familiar with Doug’s view of today’s chronic global crisis – we are exiting the eye of the storm and headed for trouble. Doug has long warned of the impending Greater Depression that awaits America and many other world economies. So it was fitting that the title of Doug’s talk was, “The Greater Depression Is Now.”

To ensure that everyone would be on the same page, Doug began with a “definition” of government as the monopoly of force within a certain geographic location. And that government will use this force in a coercive manner to get what it needs. As the Greater Depression grinds on, tax revenues fall and interest costs on the national debt rise, the government will find itself in desperate need of more money – your money, of course.

He pointed out that during depressions the rich usually do okay, and the poor, having little to lose and being on the government gravy train, will get by – they will demand and get more help from government.

It is the middle class that will get killed because they save in dollars. When the dollar is ultimately destroyed, the middle class will be as well.

Doug’s talk was peppered with some typical Casey-esque one-liners that drew roars of laughter. My favorite: When observing that the government shouldn’t be in the letter delivery business and comparing the bankrupt USPS to profitable FedEx, he rhetorically asked: “Why is it you never hear about an employee going FedEx?”

A classic Casey moment.

A hard act to follow, indeed. Yet Bud Conrad gave the audience all the data and analysis to support Doug’s Greater Depression forecast.

In line with the summit’s theme – dying currencies – Bud started with a few slides of ancient Roman coins showing an evolution through several iterations: first minted from gold; then copper was added; then copper was the major alloy; and finally there was no gold content. The money was systematically debased until it became worthless.

This is an early example of inflation.

It is no coincidence, he pointed out, that as money is debased, it undermines the cohesion of a society. The decline of honest money goes hand in hand with the decline of a country. This is what the US is experiencing today – the decline and fall of the American Empire.

With the advent of fractional reserve banking and the use of paper representations of money – today’s ubiquitous paper bills of credit backed by debt – Bud succinctly observed that economies can’t be strong when they are built on debt.

Lots of synchronized head nodding followed.

Bud took us through a history of charts that placed the current US government debt and borrowing situation in context. By several measures, including the debt-to-GDP ratio, the US is in the middle of a pack of countries on the road to experiencing their own Greek moment.

Bud’s data- and analysis-packed presentation covered way more than can be summarized here, and finished with his forecasts for the economy, interest rates, commodity prices, and many other indicators. When referring to the ease with which digital money is created, Bud noted that it (digital money) isn’t worth the paper it isn’t printed on. Funny, yet tragically true.

Next up, Casey Research was honored to introduce Richard Maybury in a rare public appearance. Richard is regarded as one of the top free-market writers in America and, for me, his speech was powerful, emotional, and provocative.

He noted that even if all the calls and predictions at the conference were false, the dollar would still fall because of war.

He began his argument for the inevitability of war by stating that the fundamental problem is political power and its corrupting influence on moral judgment.

The Treaty of Westphalia in 1648 established the ideal of non-intervention in the affairs of states and recognized that a clear and present danger must exist before an act of aggression against another state could be taken. These were laws based on logic and ethics. Reduced to a basic maxim, Richard said, “that means my right to swing my fist ends at the start of your nose.”

Richard pieced together the historical facts into a disturbing picture of today’s reality: a clear and present danger is no longer needed for acts of aggression. The state just needs to think that the other side is up to no good. Logic and ethics are dead, and we are entering a dog-eat-dog era of aggression.

There is far more to his argument that can be covered here. Richard coined the term “Chaostan” (the land of chaos), and warned that a state that disregards laws based on logic and ethics is headed for war. And a byproduct of war is the destruction of the currency.

At the conclusion of Richard’s presentation, he took several poignant audience questions. Personally, I think too listen to just this one-hour segment of the summit is worth the price of our audio set.
Day Two: The Three E’s and Undervalued Stocks

If I were asked to make a list of my ten favorite words in the English language, serendipity would certainly be one of them, and likely near the top. The word derives from the Persian tale The Three Princes of Serendip, where a father sets about to instill the great virtues into his sons. Long story short, the three young men end up gaining this wisdom in a rather unexpected and unforeseen way – and the word “serendipity” later entered the language to describe such adventures.

One of the most rewarding benefits from attending a Casey Summit is the great people you meet. And not just any kind of people that you might run into at, say, your neighbor’s cocktail party or the gym. No, the odds are pretty high that those you meet at the conference will share a similar world view as yourself and are eager to exchange ideas and experiences.

A popular offering at the summit is the Saturday night “dine-around,” where conference attendees sign up to have dinner with a member of the Casey staff, faculty and/or resource company reps. Last night, I had a wonderfully serendipitous dining adventure.

I met a couple who expatriated to Uruguay and are loving every minute of it. A man from Wyoming who lived in London for a time and is actively seeking a place to call his second home outside the US; two men from Texas that have launched a new business venture; a retired doctor who practiced in Canada; and a gentleman from Montreal who lived many years in Arabic countries. Definitely not your typical “cocktail party” chatter that came out of this.

When you meet someone interesting or run into your new friend at a Casey Summit, time can get away from you pretty quickly. And if you should miss a presentation or round table discussion here and there, no need to worry… we have the whole conference captured and available here.

The morning’s first presenter was Chris Martenson, a scientist and writer with unique insights on the future consequences of today’s trends.

His thesis rests on the principle of Three E’s – the Economy, Energy, and the Environment – and how they are interdependent.

The first E, the economy, is currently getting a lot of attention because our modern financial system is dependent on perpetual growth. As all money is loaned into existence, it carries with it a critical obligation to pay back both principal and interest. As long as the economy grows at a 2% rate, servicing the debt isn’t a problem. But it’s a different story if the growth of the economy slows or goes negative.

The problem is that perpetual growth requires energy – the second E – and there are limits to the rates of energy consumption growth and replacement.

The predicament is that the money supply has been increasing exponentially, requiring the economy to grow rapidly to service the debt, and our use of energy is increasing exponentially as well, a situation that cannot be sustained.

Chris makes an important distinction between a “problem” and a “predicament”: problems have solutions; predicaments have outcomes. If we don’t solve the problem of exponential debt-based money growth, then we must suffer through the outcomes.

Unfortunately, the government is focused on seeking solutions to predicaments, and that is a waste of time. Chris warned that investors must understand the possible outcomes and invest accordingly. As a presenter, you know your material was powerful when the next speaker begins by praising you and calls on the audience for another round of applause in your honor. And that is exactly what Rick Rule did after he was introduced. Chris Martenson’s presentation, a must-hear for all investors, is part of the complete summit audio collection.

Rick Rule, a long-time friend of the Casey organization, was so impressed with the content of the conference that he changed his speech topic. Rick is an engaging speaker who touched on many more topics than can be covered here.

However, I can distill his talk into two fundamental points.

First, as investors, we have heard a lot about risks from governments, the clash of cultures, geopolitics, etc. But in terms of your portfolio, the real risk is not taxes, regulations, fraud, or peak oil. It is your own self. In an era of permanent volatility, you must have the courage and liquidity to accept and exploit it.

Second, investors must find commonly held perceptions that are incorrect and bet against them. One of them is that the US dollar is a store of value. That’s wrong, and you can profit from it.

Rick continued with strategies and forecasts for the resource sector in general and the micro-cap sector in particular.

Rick was followed by John Hathaway, senior managing director of Tocqueville Asset Management.

John started out with a great quote: “There are no mulligans in the investment world.” If you are not familiar with this term, it is slang for a free, no-penalty, second chance at something; a “do-over.”

John strongly believes that gold stocks are completely undervalued at this stage and will generate out-sized returns. He expects strong earnings to be reported for the third quarter and for the stocks of the right companies to respond in kind. There will be no mulligan for the investor who misses the chance to get in on the gold mining stock story.

He admits that the mining stocks have not performed on par with the underlying metal and offers four possible reasons for their underperformance:

    ETFs have cannibalized gold stocks.
    Doubts on the sustainability of the gold price following its recent rapid rise.
    Margin pressures to build mines were rising, making it hard to turn a profit.
    Investors might be comparing today to 2008. In an environment where the financial sector was imploding, like in 2008, gold stocks did not do the job. Worries are that the same may happen again.

John made a compelling argument that we are entering a period of permanently higher prices for gold, and his presentation was packed with charts and data to support his case. He ended by taking several questions from the audience and had some interesting things to say about storing bullion offshore.

That wraps up only a very small snippet of the action at the Summit. If you’re intrigued and want to learn more, please don’t wait to order the complete audio collection with all the presentations – including Michael Maloney’s keynote speech during the banquet – panel discussions and specific stock recommendations by the faculty..




http://www.caseyresearch.com/editorial.php?page=articles/when-money-dies-live-summit-report&ppref=ZHB419ED1011A


--------------------
"There are a thousand hacking at the branches of evil
to one who is striking at the root."
-Henry David Thoreau
Strike The Root


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Invisibleunknown1123
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Registered: 05/15/08
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Yrat]
    #15173490 - 10/03/11 07:13 PM (12 years, 3 months ago)

:thumbup: Guess it's time to buy gold


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InvisibleAsante
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Yrat]
    #15175291 - 10/04/11 05:20 AM (12 years, 3 months ago)

Though I like the general vibe of the article, thanmks for posting them, I'd like to address the American fallacy of complete disregard for those not well off.

Quote:


He pointed out that during depressions the rich usually do okay, and the poor, having little to lose and being on the government gravy train, will get by – they will demand and get more help from government.


It is the middle class that will get killed because they save in dollars. When the dollar is ultimately destroyed, the middle class will be as well.




That is such utter bull shit. Gravy train? People on welfare often get less than $400 a month. Imagine those 400 bucks inflating away to zero and upping the sum loasing all meaning as the currency itself is failing and the government is rendered impotent.

The poor will die in the streets of this comes to be.

Oh, and the Middle Class isnt saving a red cent in dollars, most spend as fast as they receive. It doesnt matter whether you make $400 a month or $4000 a month if you spend as fast as you receive - if the money flow gets severely depleted you are both immediately poor.

The poor will be hardest hit, and those middle class who spend like there is no tomorrow will soon join their ranks into abysmal poverty.

Look at this bill:



This bill represents more dollars than were present in the entire country a year earlier, and all you could buy for it when it was printed was three eggs.

What happened to the cash millionaires in that country?
What happened to the cash billionaires in that country?

Exactly the same as what happened to the poor, just a few weeks later.

What you're looking at is a Zimbabwean Depression, not a relatively mild inconvenience.


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InvisibleIcelander
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Asante] * 1
    #15176013 - 10/04/11 10:23 AM (12 years, 3 months ago)

That's why it's good to have a couple of cans of tuna put by. :lol:


--------------------
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OfflineYrat
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Asante]
    #15177195 - 10/04/11 04:19 PM (12 years, 3 months ago)

Quote:



What you're looking at is a Zimbabwean Depression, not a relatively mild inconvenience.




what Zimbabwe experienced will look like a birthday party compared to what is in store for the US.  zimbabweans could at least fall back to american dollars to replace their dead currency.  in fact, this is exactly what happened, which is what allowed them to avoid a complete economic collapse.  but what happens when the world reserve currency follows in the same steps.  what will the world fall back on then?

:awegold:


--------------------
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InvisibleIcelander
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Yrat] * 1
    #15185674 - 10/06/11 09:45 AM (12 years, 3 months ago)

tuna?


--------------------
"Don't believe everything you think". -Anom.

" All that lives was born to die"-Anom.

With much wisdom comes much sorrow,
The more knowledge, the more grief.
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OfflineYrat
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Icelander]
    #15252473 - 10/20/11 02:55 PM (12 years, 3 months ago)



--------------------
"There are a thousand hacking at the branches of evil
to one who is striking at the root."
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OfflineYrat
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Yrat]
    #15277017 - 10/25/11 03:55 PM (12 years, 3 months ago)



--------------------
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Offlinenumonkei
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Yrat]
    #15284350 - 10/27/11 01:39 AM (12 years, 3 months ago)

...Who is going to give a fuck about gold when they don't have the internet or print to read what it's worth and ten dead bodies outside their home that were looking for food or water?

Reduce government 90%? The author offers no tangible or realistic ways to do so. I cannot understand why there is a hard line for free-market versus 'government', where both have helped and hurt the common people and both are nearly interchangeable in their executing members.

How is eliminating 90% of government overnight going to give me a more competitive product to type this shit on? If I understand correctly, the market is very efficient in regards to supply, they own it and account for most of the government. Demand? Coca-Cola didn't get famous for being tasty, it became famous for being the only real option everywhere after removing cocaine from it's recipe.

That said, fuck the government and fuck Coca-Cola. Fuck gold also, I'd bet my dogs' life that if the US currency failed tomorrow my food would be worth a hell of a lot more than gold pretty much immediately to the more rational folk who might have a battery they could barter with. Americans like food more than gold, and as a person will small daily appetite in the USA, that would make me a millionaire quicker than a Saddam statue would on ebay in '04. Provided I had a lot of food and the internet went down.




~Monk


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OfflineSpiritCat
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Re: Doug Casey: How To Prepare For When Money Dies [Re: numonkei]
    #15285901 - 10/27/11 12:37 PM (12 years, 3 months ago)

The reality is, when the dollar fails, so will gold. If this type of catastrophic event happens, your going to be bartering food, guns, and energy sources.


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Offlineqman
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Re: Doug Casey: How To Prepare For When Money Dies [Re: numonkei]
    #15285946 - 10/27/11 12:44 PM (12 years, 3 months ago)

Food is a great thing to have for sure when we have currency issues, and food is more important in the short term than gold. But you have to understand that gold is a store of value for when the currency weakens.

How much food can you store at home? $5000 worth? What about your other wealth? Would you want to have $100,000 of food and booze at home? I would not.

When you own gold, you can buy anything you need, not everyone would want or need your food, and food has a self life, gold last forever.


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OfflineHumility
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Re: Doug Casey: How To Prepare For When Money Dies [Re: qman]
    #15307700 - 11/01/11 07:29 AM (12 years, 2 months ago)

I for one don't buy in to the "apocalyptic" version of events most people try to posit where humanity is essentially living in a zombie holocaust.

It's always been the case that when some areas wane, others wax.  Where there are opportunities people will exploit them.

Gold will have value, plenty of value.  At the same time, murders and robberies will probably increase.


I don't think economic issues will completely vaporize society nor do I think that everyone is going to up and murder everyone else wantonly.


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Invisiblethescientist
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Re: Doug Casey: How To Prepare For When Money Dies [Re: Humility]
    #15307894 - 11/01/11 08:47 AM (12 years, 2 months ago)

Y'all realize that Doug Casey is making a living by catering to a special interest group and telling them what they want to hear?

His writing is intended to manipulate his readership in order to increase his subscriptions.

He is a speculator and is marketing a sentiment which he is capitalizing on.

Monk- well said.

gman- you're working under several false assumptions.

Humility- ya, more or less.


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Offlinescatmanrav
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Re: Doug Casey: How To Prepare For When Money Dies [Re: SpiritCat]
    #15308401 - 11/01/11 11:31 AM (12 years, 2 months ago)

Quote:

SpiritCat said:
The reality is, when the dollar fails, so will gold. If this type of catastrophic event happens, your going to be bartering food, guns, and energy sources.




Many believe the dollar wont fail completely, it will just become worth a reasonable amount compared to the gold we hold in reserves. Actual gold and not all the made up stuff. Once a lot of that made up gold is taken away, paper becomes worth less (not worthless). That doesnt mean it will crash and go extinct. Not apocolyptic style, just real world stuff. Gold is something people have relied on as currency for thousands of years and therefore have trust in it and will continue to. But theres only so much gold in the world and a lot more things in the world to buy, you cant split gold up into tiny enough pieces. But if you make paper to be equivilent to those microscopic pieces of gold and set prices to goods accordingly then you have a stable system of paper, backed by gold. They both hold they're value. Neither disappears, not a bartering system trading food and weapons for work. But this would practically destroy anyone with a huge pile of dollars sitting there and would raise those holding gold. Probably just to the 4000ish range, high, but nothing to extreme in either direction. Just a better medium then we have been working with for a while.


--------------------
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