Doug Casey on the state of the US financial system as 2014 begins:
“We’re really close to the edge of the precipice again. I like to use the analogy of what started in 2007 as being a gigantic economic hurricane, and we went through that in 2008 and part of 2009 and since then, we’ve been in the eye of the storm…which has been quite wide because it’s a gigantic hurricane, but I think we’re coming out the other side now.
This crisis is going to be much more serious than it was back in 2008 and 2009, and it’s going to last much longer and it’s going to be much different.”
Submitted by Tekoa da Silva, Bull Market Thinking:
I had the chance to reconnect with one of the great market thinkers of our time, Doug Casey, chairman and founder of Casey Research.
It was a fascinating conversation, as Doug shared thoughts on wealth, poverty, and markets, after having traveled to over 170 countries throughout his career. He also spoke to what may be the world’s highest potential speculation at this time.
Starting on the concept of wealth building, Doug noted that, “Anybody can become wealthy [today]…simply by providing goods and services that other people in the marketplace want…there’s no mystery to it and you certainly don’t need complex mathematical formulas and so forth that econometricians come up with…[but rather] always keep in mind—’What good or service can I provide to other people that they’re going to pay me for?’”
In positioning oneself to begin that process of delivering goods and services, Doug explained that, “Most of your spare time…should be devoted to educating yourself, how to make something, becoming an expert in some area, cultivating some ability that’s of value, and you have to be diligent and you have to work hard in order to do that…It’s [just] a question of developing good habits and doing those things.”
As conversation moved on to global equities markets and world economies, Doug noted that, “We’re really close to the edge [of the precipice] again. I like to use the analogy of what started in 2007 as being a gigantic economic hurricane, and we went through that in 2008 and part of 2009 and since then, we’ve been in the eye of the storm…[which] has been quite wide because it’s a gigantic hurricane, but I think we’re coming out the other side [now].”
The impact of this crisis, “I[s] going to be much more serious than it was back in 2008 and 2009, and it’s going to last much longer and it’s going to be much different,” Doug further explained.
In response to cracks now occurring in the global financial system, “All these governments, they’re creating currency units in the idiotic hope that [it’s] going to kiss anything and make it better,” Doug said. “Well, it does for a short period of time…But over a somewhat longer time, it makes things much, much worse…that [printed] money has gone into the stock market…[and] we’re in the middle of an interest rate bubble—[and] a bond market bubble which…has also created a mini bubble in real estate.”
With nearly all markets in some stage of speculative bubble, the most fairly priced asset to own at this time according to Doug, “[Is] gold—[primarily] because it’s the only financial asset that’s not simultaneously somebody else’s liability.“
For those with risk-capital looking to take advantage of the upcoming crisis, Doug concluded that, “It’s a good time to speculate, [and] I would speculate on these junior mining stocks. They’re really, really cheap now…[and] I think there’s going to be a bubble created in gold and a super bubble created in these little mining stocks. Mining is a crappy business, yes. But business is one thing and the stocks are another thing. I think you ought to buy them as a high potential speculation.”
This was another powerful interview with one of the great market thinkers our time. It is required listening for serious investors and market students.
To listen to the interview, left click the following link and/or right click and “save target as” or “save link as” to your desktop: