Doug Casey Explains the Real Reasons the US Arrived at the Greater Depression

  • I am of the opinion that what’s happening now isn’t just another cyclical downturn that can be papered over by printing up some more money—although that’s exactly what the U.S. and other governments are doing, and in unprecedented amounts. In fact, what the world’s governments are doing is not only wrong but also the opposite of what they should be doing.
  • For roughly a whole generation, the U.S. government’s inflation of its currency has been inviting the whole country to live beyond its means. Living beyond your means is what consumer debt is all about.
  • The $24 trillion debt that the government acknowledges it owes is actually dwarfed by the $135 trillion debt from unfunded liabilities for Social Security, Medicare, Medicaid, and such, and this doesn’t include contingent liabilities from FDIC, PBGC, and similar insurance programs.
  • If there’s a way for them—the governmental and federal geniuses who think they know what’s best—to get us out of this mess, I simply don’t see it. Beginning with the crisis that started in 2008, they’ve used the final arrows in their quiver of phony solutions—namely, the ZIRP (zero-interest rate policy) and quantitative easing (printing money).
  • The problem is that for quite a while now, the U.S. and much of the Western world has been consuming more than they produce. One of the most serious problems of the next era is that it’s very likely that society will believe that what passed for a free market over the last several decades has been discredited.
  • It’s going to be much worse, much different, and much longer-lasting than what we experienced from 2009–2010. I suspect this era will have a lot of anger. A lot of blame. Some real poverty. A good measure of violence. It’s not going to be a mellow time in North America, Europe, or China. It will be worse in the so-called “developing” world, which will stop developing without foreign capital.
  • America’s moral bankruptcy started with a government policy of inflating the currency, which constitutes fraud, and running up the national debt, which is an obvious swindle because the debt will never be paid. Economic bankruptcy is almost always preceded by moral bankruptcy. And it’s accompanied by intellectual bankruptcy: in this case, the philosophical acceptance of economic collectivism and political statism. The exact description of the situation is fascism—which, contrary to the History Channel, has essentially nothing to do with police jackboots, bizarre racial theories, or militarism. A fascist is simply one who believes in nominal private ownership of both the means of production and consumer goods—but with strong state control over both.
  • What made America different was its foundation on a philosophy of freedom. That word has been so corrupted and leached of meaning—another sign of intellectual bankruptcy. America is now economically, morally, and intellectually bankrupt. The country has wandered so far from its founding principles that it is now no different from any of the other 200 nation-states that have spread across the face of the earth like a skin disease. The U.S. no longer stands for anything; it’s now just another piece of geography. Forget about “America”; it no longer exists.
  • Bankruptcy is a factual matter. Failing to declare bankruptcy when it has happened only adds to the problem. Germany and Japan were totally and absolutely bankrupt—economically, morally, and intellectually—in 1945. Following the war, should they have tried to continue with their old currencies, policies, ideas, and institutions (that is, if the Allies had allowed them to)? In a word, no. They had reached the point where the slate needed to be wiped clean, which it was. Then, within a generation, they went from being bombed-out wrecks to two of the most prosperous economies on earth. Acknowledging bankruptcy is the first step to moving beyond it. Denying bankruptcy when it is a fact only prolongs and worsens the fact. One obvious consequence of these layers of bankruptcy is an increasing reliance on government.
  • Since the government produces nothing, anything it even seems to provide is at the direct expense of somebody else. This simple fact evades almost everyone, from the most ignorant voter to the most powerful officials. Government produces nothing but wars, pogroms, confiscations, taxes, inflation, and regulation, but people still, idiotically, look to it for salvation—even though it’s the cause of their worst problems. This is why I’ve long held that the average person is not as bright as you might hope. Once you get beyond discussing the weather, the state of the roads, TV programs, and sports, there’s often no one home.
  • It’s a near certainty that, facing the Greater Depression, the government is going to come up with something like the Newer Deal. That’s because Boobus americanus desperately wants the government—which he thinks is a magical entity that can do anything and solve every problem—to Do Something. And it will. But it won’t merely fail to do the right things; it is going to do the opposite of the right things. That’s going to make things quite unpleasant…