International Man: Thanks to the shutdowns, economic activity on main street is at a standstill. Government, corporate, and personal debt is skyrocketing. Yet, the stock market is in a mania. Has the stock market become out of touch with reality, and if so, what are the consequences of that? David Stockman: Both ends of the Acela Corridor have lost their marbles. This year, Uncle Sam borrowed $4 trillion in six months, the Fed printed $3 trillion in three months, and Wall Street drove the S&P 500 to 52X reported LTM earnings in the context of a deeper economic plunge than occurred in the worst quarter of the 1930s. Therefore, Washington has become disconnected from any semblance of fidelity to sound money and fiscal rectitude, while Wall Street has turned into an outright casino, valuing stocks based on endless Fed liquidity injections and the delusion that momentum chasing is an investment strategy. With respect to the rampant folly in the Imperial City, Treasury Secretary Stevie Mnuchin has always reminded us of Alfred E. Neuman of “Me Worry?” fame at Mad Magazine. Recently, he more than earned that moniker when, in the context of the current monetary and fiscal lunacy, he proclaimed that, “Now is not the time to worry about shrinking the deficit or shrinking the Fed balance sheet.” That was the so-called Conservative Party speaking, and it is a shrill reminder that the Trumpified GOP has gone utterly AWOL when it comes to its true job in American democracy, namely, resisting the Government Party (Dems) and its affinity for feeding the Leviathan on the Potomac. That is to say, according to even the Keynesian deficit apologists at the CBO, Uncle Sam will spend $6.6 trillion during the current fiscal year (FY 2020) while collecting only $3.3 trillion in revenue. That’s Banana Republic stuff—borrowing 50% of every dollar spent. Yet the advisory ranks of the potentially incoming Kamala Harris regency are even worse. They are loaded with “deficits don’t matter” ideologues and MMT crackpots who noisily argue that massive monetization of the public debt is not just a virtue, but utterly imperative. Needless to say, this bipartisan commitment to all-in stimulus is financial catnip to the Wall Street gamblers because they are actually capitalizing into today’s nosebleed stock prices, not the present drastically impaired economy on Main Street but a pro forma simulacrum of future prosperity based on the delusional presumption that massive debt and money-pumping actually create economic growth and wealth. The fact is, industrial production in August posted at a level first achieved in March 2006, and manufacturing output weighed in at levels originally attained in December 2004. So the misbegotten lockdowns and COVID-hysteria have cost the US economy 14–16 years of industrial production growth, yet this massive setback was not caused by some mysterious Keynesian-style faltering of “demand” that can allegedly be compensated for by new Fed credits plucked from thin air. To the contrary, the current depression is the result of the visible shutdown and quarantine orders of the state, which are likely to linger for months to come or even intensify as the fall-winter flu season arrives. Undoubtedly, the Virus Patrol will spur further outbreaks of public fear based on “bad numbers” from the CDC, which are actually an agglomeration of cases and deaths from normal influenza, pneumonia, and a myriad of life-threatening comorbidities, not pure cases of the COVID alone. But beguiled by “stimulus” and hopium, Wall Street completely ignores the contradiction between over-the-top demand stimulus and what amounts to supply-side contraction owing to economic martial law. So, at 3400 on the S&P 500, the current LTM price-to-earnings ratio ranges between 52.1 times the earnings CEOs and CFOs certify on penalty of jail time ($65 per share) or 27 times the Wall Street brush-stroked and curated version ($125 per share), from which all asset write-offs, restructuring charges, and other one-timers/mistakes have been finessed out. Of course, these deleted GAAP charges reflect the consumption of real corporate resources, such as purchase price goodwill that gets written off when a merger or acquisition goes sour, or the write-down of investments in factories, warehouses, and stores that get closed. As such, they absolutely do diminish company resources and shareholder net worth over time. But for decades now, Wall Street has so relentlessly and assiduously ripped anything that smells like a “one-timer” out of company earnings filings with the Securities and Exchange Commission (SEC) that it no longer even knows what GAAP earnings actually are. And it pretends that these discarded debits (and credits) to income are simply lumpy things that even out in the wash over time. They do not. If ex-items reporting was merely a neutral smoothing mechanism, reported GAAP earnings and “operating earnings” would be equal when aggregated over several years, or even a full business cycle. Yet during the last 100 quarters, there have been essentially zero instances in which reported GAAP earnings exceeded “operating income.” So, in aggregate terms, several trillions of corporate write-downs and losses have been swept under the rug. During the second quarter of 2020, for example, GAAP earnings reported to the SEC totaled $145.8 billion for the S&P 500 companies, while the ex-items earnings curated by the street posted at $222.3 billion. That amounts to the deletion of nearly $77 billion of write-downs and mistakes, and it inflated the aggregate earnings number by more than 52%. The game is all about goosing the earnings number in order to minimize the apparent price-to-earnings multiple, thereby supporting the fiction that stocks are reasonably valued and that nary a bubble is to be found, at least in the broad market represented by the S&P 500. Still, valuing the market at 52 times trailing-12-month earnings during the present parlous moment in time—or even 27 times if you want to give the financial engineering jockeys in the C-suites a hall-pass for $77 billion of mistakes and losses this quarter alone—is nothing short of nuts. Yet, the gamblers in the casino hardly know it. Wall Street has already decided that current-year results don’t matter a whit: the nosebleed-level trailing P/E multiples currently being racked up are simply being shoved into the memory hole on the presumption that the sell side’s evergreen hockey sticks will come true about four quarters into the future, and if they don’t, a heavy dose of ex-items bark-stripping will gussy up actual earnings when they come in. Still, if you think that a forward P/E multiple of, say, 17.5 times is just fine and that flushing the one-timers is OK, then you still need $193 per share of operating earnings by the second quarter of 2021 to justify today’s index level. Then again, a 54% gain in operating earnings over the next four quarters ($193 per share in the second quarter of 2021 versus $125 per share in the second quarter of 2020) is not simply a tall order; it’s downright delusional. International Man: What could derail the Fed’s ability to pump up the stock market casino with all this easy money? They simultaneously want zero interest rates and more inflation. It seems something has to give. David Stockman: Yes, what’s going to “give” sooner or later is the entire house of monetary cards erected by the Fed and its fellow-traveling global central banks over the last several decades. What they are doing is based on the triple error that inflation is too low, that deeply repressed and falsified interest rates fuel real growth, and that private savers are a hindrance to optimal economic function and need to be euthanized via confiscation of the real (after-inflation) value of their capital. In the first place, as Paul Volcker pointedly reminded, there is nothing in the pre-1990 textbooks that says 2.00% inflation is desirable and is to be pursued with fanatical intensity—even if actual inflation comes in only a few basis points below the magic target. Indeed, if the 2% target is zealously pursued via prolonged pegging of interest rates to the zero bound and the massive purchase of bonds and other securities, the result is actually inimical to economic growth and sustainable gains in real wealth. That’s because falsified interest rates and inflated financial asset values lead to massive malinvestment via rampant financial engineering in the corporate sector and reckless borrowing to fund transfer payments and economic waste in the public sector. Nor is that a mere theoretical possibility. The rolling 10-year real GDP growth rate has now fallen to just 1.5% per annum, or barely one-third of the 3–4% per year rolling averages which prevailed during the heyday of reasonably sound money and fiscal rectitude prior to 1971. Beyond that, there really hasn’t been any inflation shortfall from the 2% target, unless measured by the Fed’s flakey yardstick called the PCE deflator. For instance, since December 1996, when Greenspan uttered his irrational exuberance warning, the CPI is up by 2.09% per annum and the more stable 16% trimmed-mean CPI is up by 2.12% per annum. That hardly constitutes a “shortfall” from target, but the Eccles Building money-printers make the claim anyway because the PCE deflator gained slightly less over that 23 year period, averaging an increase of 1.71 per annum. The truth is, no one except groupthink besotted central bankers would think that a mere 30 basis point shortfall over more than two decades justifies the massive financial fraud of pumping trillions of fiat credit into the financial system. That’s especially the case because the PCE deflator drastically underweights shelter costs and doesn’t even measure the purchasing power of money against a fixed basket of goods and services over time, anyway. Instead, it is actually a tool of GDP accounting that reflects the changing mix of goods and services supplied to the household sector. That is to say, if someone chooses to live in a tepee and spend nearly all of their paycheck on computers, TVs, and other high-tech gadgets that have been rapidly falling in price, that doesn’t improve the exchange value of the dollar wages they earn; it just means that their tepee may be getting crowded with tech gadgets. The same is true of the aggregate level. Just because the mix of goods and services changes over time, that doesn’t miraculously rescue the purchasing power of the dollar from the ravages of inflation. Nor does it alleviate the savaging of lower- and middle-class living standards that are the direct product of the Fed’s misguided commitment to inflation targeting. In fact, during that same 23-year period, the annual rate of increase for professional services, shelter, food away from home, medical services, and education expense has been 2.6%, 2.7%, 2.8%, 3.5%, and 4.5%, respectively. So once you set aside the foolishness of 2% inflation targeting and the Fed’s sawed-off inflation measuring stick (the PCE deflator), what you really have is growth stunting monetary madness. There is no other way to explain a Fed balance sheet that went from $4.2 trillion on March 4 this year to $7.2 trillion by June 10. After all, the first $3 trillion of Fed balance sheet took nearly 100 years to generate, from its opening in 1914 to breaching the $3 trillion marker for the first time in March 2013. That the Fed has now become a monetary doomsday machine, therefore, is no longer in doubt. Editor’s Note: The truth is, we’re on the cusp of a economic crisis that could eclipse anything we’ve seen before. And most people won’t be prepared for what’s coming. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. Click here to download the PDF now.
The upcoming election may be the most important in US history. At least as important as that of 1860, which led directly to the War Between the States. In 2016 I believed Trump would win and placed a money bet on him. This time I’m not so sure, despite Trump’s “incumbent advantage” and the fact the Democrats could hardly have picked two worse candidates. I see at least six reasons why this is true, namely: The Virus The economy Demographics Moral collapse of the old order The Deep State Cheating The consequences of a Democrat victory will be momentous. Let’s look at why it’s likely. 1. The Virus Despite the fact, COVID is only marginally more deadly than the annual flu, and the fact it’s only a danger to the very old (median death age 80), the hysteria around it is changing the nature of life itself. It’s proven much less serious than the Asian flu of the late ’60s or the Hong Kong flu of the late ’50s. And not even remotely comparable to the Spanish flu of 1918-19. None of those had any discernable effect on the economy or politics. COVID is a trivial medical event but has created a gigantic psychological hysteria. The virus hysteria is, however, a disaster from Trump’s point of view for several reasons. None of them have anything to do with his “handling” of the virus—apart from the fact that medical issues should be a matter between a patient and his doctor, not bureaucrats and politicians. First, the virus hysteria is severely limiting the number and size of Trump’s rallies, which he relies on to keep enthusiasm up. Second, more people are staying at home and watching television than ever before. However, unless they glue their dial to Fox, they’ll gravitate towards the mainstream media, which is stridently anti-Trump. People who are on the fence (and most voters are always in the wishy-washy middle) will mostly hear authoritative-sounding anti-Trump talking heads on television, and they’ll be influenced away from Trump. Third, older people have by far the heaviest voter turnout, but roughly 80% of the casualties of the virus are elderly. And over 90% of those deaths are related to some other condition. Be that as it may, fear will make older people less likely to vote in this election. The COVID hysteria will still be with us in November. Older people tend to be culturally conservative and are most likely Trumpers. Fourth, in today’s highly politicized world, the government is supposed to be in charge of everything. Despite the fact there are thousands of viruses, and they’ve been with us thousands of years, this one is blamed on the current government. Boobus americanus will tend to vote accordingly. 2. The Economy Keeping his voters at home is one thing. But the effects the hysteria is having on the economy are even more important. The effect of COVID on the economy should be trivial since only a small fraction of the relatively few Covid deaths are among people who are economically active. Presidents always take credit when the economy is good and are berated when it’s bad on their watch, regardless of whether they had anything to do with it. If the economy is still bad in November—and I’ll wager it’s going to be much worse, despite the Fed creating trillions of new dollars, and the government handouts—many people will reflexively vote against Trump. In February, before the lockdown, there were about 3.2 million people collecting unemployment. Now, there are about 30 million. So it seems we have over 30 million working-age people who are . . . displaced. That doesn’t count part-time workers, who aren’t eligible for unemployment but are no longer working. The supplementary benefits have ended. If they return, it will be at lower levels. The artificial good times brought on by free money will end too. It will be blamed on the Republicans. Worse, the public has come to the conclusion that a guaranteed annual income works. This virus hysteria has provided a kind of test for both Universal Basic Income and Modern Monetary Theory—helicopter money. So far, anyway, it seems you really can get something for nothing. An important note here: Trump—whatever his virtues—is an economic ignoramus. He’s supported both helicopter money and artificially low-interest rates since he’s been in office. But especially now, because he knows it’s all over if today’s financial house of cards collapses on his watch. I’ll wager that, out of the 160 million work-force Americans, 30 million will still be out of work by voting day. The recognition that the country is in a depression will sink in. The virus hysteria was just the pin—or sledgehammer, perhaps—that broke the bubble. But that’s another story. What’s for sure is that the average American will look for somebody to blame. As things get seriously bad, people will want to change the system itself, as was true in the 1930s. The only economic bright spot for Trump is the stock market. But it’s at bubble levels. Not because the economy is doing well, but because of the avalanche of money being printed. Where it is in November is a question of how much more money the Fed will print, and how much of it flows into the stock market. Even then, there’s an excellent chance it could collapse between now and the election. For reasons I’ve detailed in the past, the economy is now entering the trailing edge of a gigantic financial and economic hurricane. The Greater Depression will be much different, longer-lasting, and nastier than the unpleasantness of 1929-1946. And people vote their pocketbook. Bill Clinton was right when he said, “It’s the economy, stupid.” If stocks fall, it will compound this effect. A high stock market just gives the illusion of prosperity. And, at least while stocks are up, contributes to the atmosphere of class warfare. Poor people don’t own stocks. 3. Demographics Since the gigantic political, economic, and social crisis we’re in will be even more obvious come November, people will want a radical change. Since that—plus lots of free stuff—is what the Democrats are promising, they’re likely to win. But there are other factors. The last election was close enough, but now, four years later, there are four more cohorts of kids that have gone through high school and college and have been indoctrinated by their uniformly left-wing teachers. They’re going to vote Democrat overwhelmingly. Alexandria Ocasio-Cortez (AOC), and people like her, are both the current reality and the future of the Democratic Party—and of the US itself. She knows how to capitalize on envy and resentment. The Black Lives Matter and Antifa movements have added the flavor of a race war to the mix. Racial antagonism will become more pronounced as whites lose their majority status over the next 30 years. Nobody, except for a few libertarians and conservatives, is countering the purposefully destructive ideas AOC represents. But they have a very limited audience and not much of a platform. Arguing for sound money and limited government makes them seem like Old Testament prophets to Millenials. Collectivism and statism are overwhelming the values of individualism and liberty. It’s exactly the type of thing the Founders tried to guard against by restricting the vote to property owners over 21, going through the Electoral College. Now, welfare recipients who are only 18 can vote, and the Electoral College is toothless. For the last couple of generations, everybody who’s gone to college has been indoctrinated with leftist ideas. Almost all of the professors hold these ideas—as well as high school and grade school instructors. They place an intellectual patina on top of emotional, fantasy-driven leftist ideas. When the economy collapses in earnest, everybody will blame capitalism. Because Trump is rich, he’s incorrectly associated with capitalism. The country—especially the young, the poor, and the non-white—will look to the government to “do something.” They see the government as a cornucopia. A majority of Millennials are in favor of socialism, as are so-called People of Color. By 2050, whites will be a minority in the US. A straw in the wind is that a large majority of the people who commit suicide each year are middle-class white males—essentially, Trump supporters. The demographic handwriting is on the wall. Trump’s election in 2016 was an anomaly. No more than a Last Hurrah. 4. Moral Collapse There’s now a lot of antagonism toward both free minds and free markets. A majority of Americans appear to actually support BLM, an openly Marxist movement. Forget about free minds—someone might be offended, and you’ll be pilloried by the mob. Forget about free markets—they’re blamed for all the economic problems, even though it’s the lack of them that caused the problem. The idea of capitalism is now considered undefendable. Widespread dissatisfaction with the system is obviously bad for the Republicans and good for the Democrats, who promote themselves as the party of change. It used to be pretty simple—the Republicans and the Democrats were just two sides of the same coin, like Tweedledee and Tweedledum. Traditionally, one promoted the warfare state more, the other the welfare state. But it was mostly rhetoric; they were pretty collegial. Now, both the welfare and the warfare state have been accepted as part of the cosmic firmament by both parties. The difference between them is now about cultural issues. Except that polite disagreement has turned into visceral hatred. The Dems at least stand for some ideas—although they’re all bad ideas. The Republicans have never stood for any principles; they just said the Dems wanted too much socialism, too fast, which is why they were always perceived—correctly—as hypocrites. Antagonism between the right and the left is no longer political or economic—it’s cultural. That’s much more serious. Look at the 20 Democratic candidates that were in the primary debates last summer. They were all radical collectivists, dedicated statists. The Republicans were all—with one exception—mealy-mouthed nonentities. Unlike Trump and the Reps, the Dems actually have a core of philosophical beliefs—and that counts during chaos. It doesn’t matter that they’re irrational or evil. People want to believe in something. The Dems give them a secular religion that promises a better world. The Reps only represent the withering status quo—which is not very appealing. There’s no political salvation coming from the Republican party. Like Trump himself, it doesn’t have any core principles. It just reacts to the Dems and proposes similar, but less radical alternatives to their ideas. It doesn’t stand for anything. It’s only capable of putting forward empty suits, pure establishment figures like Bob Dole, Mitt Romney, or Bush. Or a nobody like Pence. That’s a formula for disaster in today’s demographic and cultural environment. Incidentally, I’m not a fan of Trump, per se. He’s an opportunist who flies by the seat of his pants. He’s essentially an American Peron, whose economic policies are disjointed and inconsistent. His foreign policies are dangerous, provoking the Iranians and the Russians and starting a cold war with China that could easily spin out of control and turn into a major hot war. But on the bright side, he’s a cultural conservative. And that’s why people support him. He wants to see the US return to the golden days of yesteryear, the world of Leave it to Beaver, Ozzie, and Harriet, and Father Knows Best. We’d all like to see domestic tranquility and rising prosperity. But that’s not the world we’re going to be living in, not just for 2020, but the whole decade. For years, I’ve joked that I planned on watching riots on my widescreen from a secure location, not out my front window. Things have now become so predictable that when I turn on the news, I kill the audio and just put the Stone’s “Street Fighting Man” on a continuous loop. Anyway, conservatives are completely demoralized. They’re grasping at cultural and moral straws from a bygone era. It’s impossible to defend being a white person anymore; propaganda has made it shameful to be white. If you object to the race-baiters, you’ll be shouted down in the media—especially by white “liberals.” Everything you grew up with and thought was part of the cosmic firmament is being washed away as unworthy. As an example, recently, in Stone Mountain, Georgia, 1,000 uniformed, armed black men went out of their way to say that they were looking for a fight. “Where are the rednecks that want to fight with us?” It would have been out of the question at any time in the past, but no rednecks showed up to the party. That’s partially because they’ve been psychologically cowed, and partially because they recognize that if they did when law enforcement arrived, they’d be the ones that were prosecuted, not the black men. It’s a complete inversion of what would have been the case only a generation ago. Then the blacks would have been too psychologically cowed to turn up for a fight, and the legal system would have railroaded them. Just to be clear, I’m opposed to any kind of identity politics, regardless of the group. The point is that there’s been a sea change in mass psychology. The demoralization of the ancien regime is why the destroyers of scores of statues of national heroes, from Columbus on down, are not being prosecuted. Nor do any citizens come out to oppose them. It’s a matter of psychology. Whites and conservatives no longer believe in themselves. When that’s true, it’s game over. Yes, I know it’s not true of all of them—but I believe it’s a fair generalization. This was spelled out very presciently by late Soviet defector Yuri Bezmenov, a KGB agent who fled to Canada in 1970. Bezmenov stated in the mid-1980s that there were four stages of collapse: Demoralization, Destabilization, Crisis, and Normalization. Demoralization takes decades. Bezemov said in 1985 that the process of demoralization—an undermining of a target nation’s values that makes it ripe for revolutionary takeover—was “basically completed already” in the United States. Destabilization, which we’ve seen, especially since the crisis of 2008, is now reaching a climax. I believe a Crisis that changes everything is coming in November. 5. The Deep State The president is important. But the fact of the matter is that the Deep State—which is to say the top senators and congressmen, heads of the Praetorian agencies, generals, top corporate guys, top academic guys, top media people—really runs the country. Since the Deep State supports Biden and despises Trump, they’ll do everything in their power to defeat him. You’ve seen this with numerous commercials that don’t sell products so much as promote Woke and SJW ideology. Almost all corporations, universities, sports franchises, and media now make diversity hiring and social activism high priorities. The 2016 election took them by surprise; they didn’t think it was possible. This time they’re going to be organized, and the Deep State is going to be working actively against Trump’s reelection. Whether it’s through active “de-platforming” by Google, Twitter, and Facebook, or the more subtle influence of how they present things, this time, they’re going all out to derail Trump. They have immense power and can use it in many ways. They didn’t do much in 2016 because it hardly seemed worth the trouble; the election was thought to be in the bag for Hillary. This time it’s going to be different. 6. Cheating The first five factors are important; they represent megatrends, tidal size influences. But let’s be candid. This election is going to hinge on who cheats the best. And the Democrats have, over the years, developed far greater expertise in cheating than the Republicans. I grew up in Chicago, and it was a joke even then. Saul Alinsky’s “Rules for Radicals” wasn’t written for the kind of people who vote Republican. For one thing, there’s now an emphasis on mail-in votes, which makes it easier to cheat. You can register dead people as voters. You can register your dog as a voter. You could probably register 50 million Nigerian princes and get away with it. If the fraud is ever even discovered, it won’t be until long after the election. Which means it’s likely to be a contested election long after Nov 3rd. That’s only part of it, though. A high percentage of voting machines are computerized. Fraud by hacking voting machines is apparently easy to do—and it’s pretty untraceable. It’s just a matter of planning and boldness. One of the consequences of these widely acknowledged dysfunctions is to delegitimize the whole idea of voting. That’s possibly not a bad thing. Mass democracy inevitably degrades into a system where the poorer citizens vote themselves benefits at the expense of the middle class. Basically, mass democracy is mob rule dressed in a coat and tie. But if the populace loses faith in “democracy” during a serious economic crisis—like this one—they’re going to look for a strong man to straighten things out. The US will look more and more like Argentina. Or worse. Remember what Stalin said: “Who votes doesn’t count. What counts is who counts the votes.” But what about the idea of democracy itself? What does it matter the US starts to resemble a Third World country if that’s the will of the people? I’ve got to say that I don’t believe in democracy as a method of government. I understand how shocking that is to hear. Let me explain. There’s something to be said for a few people who share traditions and culture and generally agree on how the world works, voting on who will speak for them when it’s appropriate. That’s one thing—and it can make sense. But it’s very different from a gigantic agglomeration of very different, even antagonistic, people fighting for control and power. Winston Churchill said two things about democracy that are apposite. One is that “Democracy is the worst form of government, except for all the others.” I would argue that’s simply not true. The alternatives are worth discussing. The other thing that he said was, “The best argument against Democracy is a five-minute conversation with the average voter.” He’s absolutely right in that quip. Getting back to cheating: Will foreign interference in US elections be part of the cheating? Kind of. There already are millions of foreign citizens—illegal aliens orchestrated by the left—interfering directly in the outcome by voting. That’s much more of a change than some random Russians making political comments on Facebook allegedly during 2016. Although the Russian thing isn’t even a tempest in a toilet bowl. So what if some Russian kids played around on their computers to see what they could do? It was totally trivial and meaningless. In a way, it just proves the old saying, turnabout is fair play. For many years, the US government has cultivated regime change in foreign countries by interfering very overtly in their elections. Why should Americans act surprised if it happens in the US? A Counter Argument What are the chances Trump could win, despite the six points I’ve just mentioned? There are two factors I can think of. One is that the Dems may have overplayed their hand by first supporting, and now not denouncing the “mostly peaceful protest” (aka, riots), Defund the Police, Black Lives Matter, Antifa, and the like. People can approve or not—but they don’t want to be scared or have their lives disrupted. It may send the silent majority to the Republicans. Second is the immense enthusiasm of Trump’s supporters. When he goes somewhere, they disrupt their lives and line-up, waiting for hours to get into the venue. It seems Biden and Harris can barely fill a coffee shop. Millions of middle Americans support Trump as if their lives depended on it. And in a way, they do. If Trump loses the election—or more exactly, if the Democrats win—it is, in fact, going to change the nature of the US drastically and permanently. Unfortunately, that’s going to be the case even if Trump wins. Next week I’ll follow up with what’s going to happen after the election. Stay tuned. Editor’s Note: Disturbing economic, political, and social trends are already in motion and now accelerating at breathtaking speed. The risks that lie ahead are too big and dangerous to ignore. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. It will help you understand what is unfolding right before our eyes and what you should do so you don’t get caught in the crosshairs. Click here to download the PDF now.
Most of us would like to assume that we’re smarter than pigs, but are we? Let’s have a look. Pigs are pretty intelligent mammals, and forest-dwelling wild pigs are known to be especially wily. However, there’s a traditional method for trapping them. First, find a small clearing in the forest and put some corn on the ground. After you leave, the pigs will find it. They’ll also return the next day to see if there’s more. Replace the corn every day. Once they’ve become dependent on the free food, erect a section of fence down one side of the clearing. When they get used to the fence, they’ll begin to eat the corn again. Then you erect another side of the fence. Continue until you have all four sides of the fence up, with a gate in the final side. Then, when the pigs enter the pen to feed, you close the gate. At first, the pigs will run around, trying to escape. But if you toss in more corn, they’ll eventually calm down and go back to eating. You can then smile at the herd of pigs you’ve caught and say to yourself that this is why humans are smarter than pigs. But unfortunately, that’s not always so. In fact, the description above is the essence of trapping humans into collectivism. Collectivism begins when a government starts offering free stuff to the population. At first, it’s something simple like free education or food stamps for the poor. But soon, political leaders talk increasingly of “entitlements” – a wonderful concept that by its very name suggests that this is something that’s owed to you, and if other politicians don’t support the idea, then they’re denying you your rights. Once the idea of free stuff has become the norm and, more importantly, when the populace has come to depend upon it as a significant part of their “diet,” more free stuff is offered. It matters little whether the new entitlements are welfare, healthcare, free college, or a guaranteed basic wage. What’s important is that the herd come to rely on the entitlements. Then, it’s time to erect the fence. Naturally, in order to expand the volume of free stuff, greater taxation will be required. And of course, some rights will have to be sacrificed. And just like the pigs, all that’s really necessary to get humans to comply is to make the increase in fencing gradual. People focus more on the corn than the fence. Once they’re substantially dependent, it’s time to shut the gate. What this looks like in collectivism is that new restrictions come into play that restrict freedoms. You may be told that you cannot expatriate without paying a large penalty. You may be told that your bank deposit may be confiscated in an emergency situation. You may even be told that the government has the right to deny you the freedom to congregate, or even to go to work, for whatever trumped-up reason. And of course, that’s the point at which the pigs run around, hoping to escape the new restrictions. But more entitlements are offered, and in the end, the entitlements are accepted as being more valuable than the freedom of self-determination. Even at this point, most people will remain compliant. But there’s a final stage: The corn ration is “temporarily” cut due to fiscal problems. Then it’s cut again… and again. The freedoms are gone for good and the entitlements are then slowly removed. This is how it’s possible to begin with a very prosperous country, such as Argentina, Venezuela or the US, and convert it into an impoverished collectivist state. It’s a gradual process and the pattern plays out the same way time and again. It succeeds because human nature remains the same. Collectivism eventually degrades into uniform poverty for 95% of the population, with a small elite who live like kings. After World War II, the Western world was flying high. There was tremendous prosperity and opportunity for everyone. The system was not totally free market, but enough so that anyone who wished to work hard and take responsibility for himself had the opportunity to prosper. But very early – in the 1960s – The Great Society became the byword for government-provided largesse for all those who were in need – free stuff for those who were disadvantaged in one way or another. Most Americans, who were then flush with prosperity, were only too happy to share with those who were less fortunate. Unfortunately, they got suckered into the idea that, rather than give voluntarily on an individual basis, they’d entrust their government to become the distributor of largesse, and to pay for it through taxation. Big mistake. From that point on, all that was necessary was to keep redefining who was disadvantaged and to then provide more free stuff. Few people were aware that the first sections of fence were being erected. But today, it may be easier to understand that the fence has been completed and the gate is closing. It may still be possible to make a hasty exit, but we shall find very few people dashing for the gate. After all, to expatriate to another country would mean leaving all that free stuff – all that security. At this point, the idea of foraging in the forest looks doubtful. Those who have forgotten how to rely on themselves will understandably fear making an exit. They’ll not only have to change their dependency habits; they’ll have to think for themselves in future. But make no mistake about it – what we’re witnessing today in what was formerly the Free World is a transition into collectivism. It will be a combination of corporatism and socialism, with the remnants of capitalism. The overall will be collectivism. The gate is closing, and as stated above, some members of the herd will cause a fuss as they watch the gate closing. There will be some confusion and civil unrest, but in the end, the great majority will settle down once again to their corn. Only a few will have both the insight and temerity necessary to make a dash for the gate as it’s now closing. This was true in Argentina when the government was still generous with the largesse, and it was true in Venezuela when the entitlements were at their peak. It is now true of the US as the final transition into collectivism begins. Rather than make the dash for the gate, the great majority will instead look down at their feed and say, “This is still the best country in the world,” and continue eating the corn. Editor’s Note: Disturbing economic, political, and social trends are already in motion and now accelerating at breathtaking speed. The risks that lie ahead are too big and dangerous to ignore. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. It will help you understand what is unfolding right before our eyes and what you should do so you don’t get caught in the crosshairs. Click here to download the PDF now.
International Man: So-called “Woke” culture and political correctness have spread like wildfire across the West. What do you think are the ramifications of this? Chris MacIntosh: The “woke culture” is simply Marxism writ large. It’s been with us for at least two generations, educating our children in the West with neo-Marxist ideologies. They’ve simply become more and more egregious. It started with gender studies and feminism studies. We’re at the point now where we’re having debates around whether two plus two should equal four—because it’s a white supremacist ideal. It’s the notion that science, technology, engineering, and mathematics, also known as STEM, is a white, male patriarchal construct that should be abolished. I don’t know about you, but when I drive across a bridge or walk into a building, I’d like to know that mathematics and science have played a part in constructing that. I don’t want to drive across a bridge built by somebody who won’t acknowledge that two plus two equals four. So, what are the ramifications? Where do I start? I had a conversation many years ago, which only came back into my consciousness three or four years ago. I was still about 20 years old at the time. I met a gentleman who said something about how to figure out where our country is going. He was an asset manager who I just bumped into while doing a hike up Table Mountain. He said, “If you watch what’s taking place in the universities, if there’s a very strong zeitgeist in one way or the other, watch that. Whatever that zeitgeist is, you’re going to find that, within five to ten years, in the country.” The reason is that the leaders of the country—the CEOs, the people in management, in politics, in the courts, all come from those universities. If you look at what has been transpiring in the West over the last decade at least, in the universities—it is frightening. It’s not a surprise now that we find these people are in positions of power. They’re instituting their vision of how the world should work. Their ideology—their zeitgeist—is Marxism. So, this woke culture is just Marxism. Unfortunately, it is now in the DNA of the West. As much as I want to believe that we could eliminate that, it starts with the universities and being able to educate a whole new class of people correctly. When I say correctly, I mean, principles that adhere to civil liberties and the like. These people don’t believe that at all. So, we’re seeing it now coming into the political landscape and the legal landscape. It’s not good. The ramifications are that the West is committing suicide. International Man: What does this cultural shift mean for anyone with savings and wealth? Chris MacIntosh: If you realize that the Bolsheviks are coming—which they are—realize that they will come after anybody with any wealth. Because there is this desire to create an equal society, what they call equity, which is really just is a redistribution of wealth. There’s one thing, having the ability to see what sectors can benefit and investing in them. But it would be a tragedy to do that only to find that the Bolsheviks come and take it away from you. That’s another whole different topic. How any person deals with that is particular to their own set of circumstances. The first step is to realize that they will come for your savings and your wealth. Firstly, the savings will be taken away via an inflationary impact. That’s fine; you can protect yourself against that. But certainly, they’re going to come after anybody that is deemed to not be with the revolution. “We’re all in this together.” Remember? That’s what we’re seeing now with COVID, how we’re all in this together. Well, the hell we are. Let’s look at it like this. How many lockdowns would we have globally if every politician that instituted those lockdowns simultaneously lost all of their income? This is essentially what they’ve forced many millions of people globally to do. They’ve forced them to lose their income. But politicians don’t lose their income. They still earn their big fat salaries, their perks, and their travel allowances. Yet they stand there saying, “We’re all in this together.” We’ve seen this playbook before. It is now coming down the train tracks at breathtaking speed. And you needed to prepare yesterday. Editor’s Note: Disturbing economic, political, and social trends are already in motion and now accelerating at breathtaking speed. Most troubling of all, they cannot be stopped. The risks that lie ahead are too big and dangerous to ignore. That’s why contrarian money manager Chris Macintosh just released the most critical report on these trends, What Happens Next. This free special report explains precisely what’s coming down the pike and what it means for your wealth and well-being. Click here to access it now.
In 1946, Juan Perón was elected president of a prosperous country: Argentina. He promised great social benefits to the common man, under justicialismo (social justice). This “justice” was never actually defined; it was more implied: If you’re a common man, the Perón government will favour you over the “rich.” This he demonstrated through forced wage increases and other benefits. Railroads and utilities were nationalised (stolen from their owners by the government). In addition, extensive, but often unnecessary, public works projects were undertaken. Work ethic and personal achievement took a back seat to being well-connected. Increasingly, success was the result of bribes to government leaders and officials. The overall result of these actions was that the economy sank and the very businesses that were bled to provide the largesse given to the common man were no longer able to pay the ever-increasing cost of entitlements. This led, not to an obvious reversal of the socially and economically destructive policies, but to an increased reliance on the military and a growing police state. Constitutional liberties were removed and any opposition was punished. Although the “man of the people” campaign promises from Mister Perón had been welcomed in 1946, by 1955, it became apparent that they had led to inflation, increased poverty, corruption and political oppression. Amid broad public discontent, Mister Perón was ousted from office. The subsequent government advised the electorate that, for the economy to recover, they must accept a loss of entitlements. Such was the payback to recover from the mistakes of socialism. Perón went into exile, but amazingly, he was returned to office by the electorate in 1973 (and died in office the following year). Since that time, Argentina has gone through cycles that have each begun with a new “saviour” candidate promising greater largesse from the government, winning the election, then instituting a revised Peronist model. In every case, it would end in inflation, increased poverty, corruption and political oppression two or three terms later. Following the inevitable economic decline, a more conservative administration would be voted in. There would be a brief period of correction – fiscally sound governmental polices. Under such administrations, entitlements would be diminished and Argentina would begin to return to a sound economic footing. But these periods of responsible governance would rarely last more than one term. Before the transition to full prosperity could be completed, the next election would result in a return to the Peronist model. If the above description sounds repetitive, it is. The cycles have repeated for 73 years, with the odd interruption of military rule. The result has been that Argentina, a once-highly productive country, has become a banana republic and has remained that way. There are significant periods of socialism, interrupted with brief corrections – attempts to refloat the economy – only to dive once more, headlong, into socialism. And yet the Argentine people are, for the most part, educated and industrious. Why on earth does this conundrum continue after so many blatant failures? The answer is human nature. Once a people have decided to cease to act responsibly, once they’ve decided to pass the decision-making to the government, they slide into a childlike existence in which they cease to bother to look any further into the future than their next governmental handout. Once a people have become this shortsighted, they’re easily manipulated into forgetting the pain of past errors and are suckers for renewed empty promises. It should be borne in mind that those who have watched Argentina closely over the years maintain hope that Argentines will one day “wake up” and recognize that the 73-year experiment has only brought repeated hardship; that they’ll return to an understanding that, in order to have a sound economy, they must accept that socialist concepts are invariably doomed to failure. This hope was particularly high in 2015, when an accomplished businessman, Mauricio Macri, ran for office at the end of the disastrous reign of Cristina Fernández. He won the election – the first true conservative candidate to do so since the early 1940s. There were many people who then said, “Finally – the electorate have seen the light.” Sorry to say, although I wished that this might be true, on hearing the results of the election, I predicted that Mister Macri would be a one-term-only president. If Mister Macri were to usher in a new era of fiscal responsibility, he would need at least two terms of recovery to re-stabilise the country, then another two terms or more of prosperity for the lesson to sink in – to build up the prosperity. There was no chance, in my view, that he could complete the task within four years. Consequently, he’d be voted out. I term this conundrum the “wheat-field principle.” The same people who voted for redemption from a failed system will, in a subsequent election, reverse their vote. So, how does this principle manifest itself? Well, the pundits who predict elections tend to imagine that “the people” of a country have a change of heart and, accordingly, a change of leadership occurs. If not, the existing leadership remains. This is never what actually occurs. Instead, any country will always have a hardcore conservative group – mostly employers and other businesspeople – who almost invariably vote for the conservative candidate. It will also have the wage earners and the civil service, etc., who have a limited ability to increase their own income. They hope that a liberal leader will provide them with benefits that they cannot create for themselves through their limited abilities and ambitions. The latter group almost invariably vote for the liberal candidate. In the middle are a percentage of the electorate – less than 25%, but often even less, who wave back and forth… like a wheat field. When a liberal candidate makes empty promises to make life better, they vote liberal. But when those promises prove to be empty and the economy craters, the wheat field, reluctantly, vote conservative. The significance of this is that the wheat field have not ceased to want entitlements. In fact, they remain hopeful that entitlements can return. They’re uninterested in why socialism doesn’t work; they simply want to be told that things will be better this time. It’s for this reason that, time after time, the Argentine wheat field that voted for a return to fiscal responsibility in one election, become the swing vote again in the next election, returning the country once again to socialism. History shows that countries discard socialism only if it has brought the economy to the bottom and kept it there long enough for a fundamental change in thinking amongst an electorate. If not, the same wheat field that voted conservative in one election will blow the other way four years later – and that will be true in most any country. Editor’s Note: Disturbing economic, political, and social trends are already in motion in the US and Europe and now accelerating at breathtaking speed. Most troubling of all, they cannot be stopped. In all likelihood, the public will vote itself more and more “free stuff” until it causes an economic crisis. That’s precisely why, New York Times best-selling author Doug Casey and his team just released a free guide that will show you exactly how to survive and thrive in the coming crisis. Click here to download the PDF now.
International Man: Statism has become a new religion. A growing number of people are interested in using the State’s power to tell others how to live. They are also voting themselves freebies at the expense of others. It’s clear that those who want to be left alone won’t be. Is it possible to find freedom in an unfree place? Doug Casey: Back in 1973, my old friend Harry Browne wrote a really fantastic book called How I Found Freedom in an Unfree World, where he dealt with exactly that question. Remember, that was almost 50 years ago now—a lifetime. The book was timely, even though the world was much freer then than it is now. We now have vastly more financial and travel controls, however—many new penalties for saying, or even appearing to think, the “wrong” things. You’re now monitored in many more ways. Harry’s book is brilliant and actually more important to read now than it was then. His answers to how you find freedom in an unfree world are useful and relevant. But the fact is that you can run but you can’t hide. That’s because the world has been infected by a virus. I don’t mean the ridiculous COVID virus. I mean the virus of statism and collectivism. There’s really nowhere you can go to be safe from it—only some places that are better than others. For instance, the so-called Five Eyes countries—the US, Britain, Australia, New Zealand, and Canada. They were once the major bastions of Western Civilization, the only civilization—ever—that held personal freedom as an ideal. But now they’re the very ones leading the route downhill. It’s a real problem for freedom lovers. We’re a smaller and smaller minority. Most people, however, prefer a strong leader promising the illusion of safety and security. Nothing has changed since the days of Rome. It devolved from a yeoman republic to a multicultural empire with onerous taxes in order to pay for bread and circuses to keep the capite censi under control. In the latter days of the empire, many of its citizens attempted to escape, to live among the barbarians—even while the barbarians were taking over the empire itself. Pretty much the same thing is happening now in the West in general and the US in particular. The best thing you can do to defend yourself—at least while it’s still possible—is to become rich enough to insulate yourself from the State. Rich enough so that even if they steal a lot from you—and they will— you still have enough. Enough to absorb the hit, keep moving, and live life as you’d like. Let me go off on a bit of a tangent here, and look at things from the viewpoint of class. That’s perhaps appropriate in a world where neo-Marxism is being promoted everywhere. I see classes according to how they align relative to the three most important, most basic verbs in any language—be, do, and have. If you’re lower class—which is to say have a lower class mentality— you just accept what you’re given. The lower classes are defined by psychological demoralization, apathy, and hopelessness. At best, they just think about having stuff—cars, houses, food, mates—but don’t even succeed at that very well because of their values. I doubt, however, that anybody now reading this fits into that category. Historically, they’re by far the largest group, and their numbers are now growing rapidly. I increasingly wonder if the US even has much of an upper class any more. Being upper class is all about values, primarily being something. Money, power, and prestige don’t make someone upper class—they’re consequences of upper-class values unless you win the lottery or have great athletic, entertainment, or sometimes even business ability. Then you can masquerade for a while. But those things tend to corrupt. It’s easy to descend and become effete, entitled. Ineffectual and stagnant. The fact is, most of us are middle class. Historically, the middle class is what America is all about; it made America unique. The work ethic, striving, and improving, doing. The middle class is being destroyed by inflation and taxes, which make it hard to save and build capital, and regulations, which make it hard to produce, to do. I’m afraid that ground between the millstones of taxes and inflation—as Lenin said—huge numbers of the middle class are descending into the ranks of the lower—the proletariat. The three classes are natural enough. But since the invention of mass democracy, since it was turned into a worldwide secular religion around the time of World War One, there’s arisen another class—the political class. Anyone can join it. They were always there but nowhere near as hugely important or virulent. I can’t think of a single verb to define them—all the possibilities are unflattering, though. They hate the middle class, though, because its members are, by definition, productive and independent. Anyway, these are just a few thoughts. Maybe I’ll expand on them in the future. To get back to the original question, what you should do is become rich so you can insulate yourself to the best degree that you can from the ongoing crisis. It will eventually pass, and you can reposition yourself—if you’ve maintained some capital. Money is far from everything, of course. It’s just a tool. But tools are helpful … International Man: Western Civilization seems to be going downhill economically, politically, and culturally at a rapid pace. The trajectory looks grim. However, much of the rest of the world outside of the West has their own problems. Whatcan freedom-loving people do not only survive but thrive in the years ahead? Doug Casey: Once again, I’ve said this for many years, and it’s truer now than it’s ever been. The financial and economic problems in the world are serious and accelerating. But as we go deeper into the Greater Depression, your biggest risks aren’t financial or economic. They’re political. The only way to solve that problem from a practical point of view is to diversify politically the way you would diversify financially. That means you should have a crib in a second or third country—as well as businesses and financial assets in others besides your home country. That’s the only thing that you can do at this point. You can vote if it makes you feel good. But, as Stalin said, it’s not who votes that counts—it’s who counts the votes. Becoming a political activist is degrading and pointless. This coming election will be largely about cheating by both sides, IMO. The political classes everywhere are using the current COVID hysteria to cement themselves in place, and very few of the sheeple are resisting. To the contrary, they welcome it, because they think drastic actions make them safe. A degenerating society values safety above all. It’s true everywhere, though, even in increasingly primitive places like South Africa—in fact, almost all of Africa. India is totally locked down as is most of South America. These places don’t have enough capital stored to enable an enforced vacation of several years. And that’s what we may be looking at. It’s happening almost all over the world. The people that are being hurt the most, needless to say, are the people living hand to mouth. They’re going to be hurt even worse as all these governments destroy their national currencies—because poor people can only save the local national currency. When their pitiful paper currency savings are wiped out, then they’re really in trouble. Will they get violent, or just roll up into a ball and die? Good question. In the 21st century, East Asia, China, Vietnam, Korea are the best places to be. This is also true of Russia and Eastern Europe, notwithstanding the fact that China is going to have a financial collapse and may very well wind up divided into five or six smaller countries. We’re looking at worldwide chaos in the making. I was always half kidding when answering the question, “How bad do you think the Greater Depression will be?” and I’d say, “Even worse than I think it’s going to be.” But now, it’s no joke. International Man: Almost every government and country in the world is going in the wrong direction from a personal freedom standpoint. Are there any options for like-minded individuals to come together if there is no perfect country or place? Doug Casey: Everybody should read Neal Stephenson’s book, The Diamond Age. The ideas that he developed, essentially of nation-states falling apart and being replaced with phyles, was very prescient. Humans are social animals; we like to hang out with other people. This is especially true with people that are like us. In other words, people that believe in the same things, that have the same values, and have the same outlook on the world. It’s actually crazy to try to put diverse, disparate people together into the same political entity. That’s because, inevitably, any and all of the groups in that artificial political entity are going to try to get control of the apparatus of the State to benefit themselves and punish the others. Politics always results in a war of all against all. I think Stephenson’s novel was quite correct. People will increasingly find that their real countrymen are people with whom they share values and ideas—or whatever happens to be important to them. Not a national passport. That’s just government ID, like a driver’s license. Within that context, here in the US, Libertarians tried to put together a community, I think called the Free State Movement, centering around Keene, New Hampshire. I haven’t been there. So, I don’t know if it’s in any way successful or not, or whether the Libertarians are looked upon as some type of a weird religious cult by the locals. I don’t think it’s had any real effect on anything. Worse, if the wrong guys get in power, the thing could backfire. It might facilitate one-stop-shopping to find potential enemies of the State. If seriously dangerous political class types take over, as is likely in November if Biden wins the election, there’s no telling what might happen. Of course, I tried to put something together in an obscure but very pleasant part of Argentina, La Estancia de Cafayate. It’s been an artistic success, and it’s a great place to live. We’ve got a lot of great people living there—very enjoyable, mellow, easy-to-get-along-with company. But we attracted our share of antisocial and dogmatic nutcases. Just because someone is a political Libertarian doesn’t necessarily mean he has any other virtues. And he may be psychologically unbalanced in the bargain. Psychology and character are the real problems. Shangri-la doesn’t exist. And it won’t until the vast majority of humans are more like Harry Browne, Ron Paul, or Lao-Tzu, and less like AOC, Pelosi, or Obama. I guess my best suggestion at this point is to look at a small town, whether you’re in the US or elsewhere, one that has a frontier culture, where people are independent-minded. I suspect most of the people reading this now are what we’d call gamma rats. They’re not like alpha rats, which want to boss everybody else around, taking the best mates and best territory. And beat up the beta rats, who are the vast majority of the population. The gamma rats also tend to get the best possessions and so forth, but they don’t beat up the beta rats nor let themselves be beat up by the alpha rats. The trouble is that, in laboratory experiments, scientists found that gamma rats are only a very small portion of the population. Among humans, we’re an equally small portion of the population. International Man: Let’s discuss some potential bright spots. What role do you think the advancement of technology will play in empowering the individual? Doug Casey: From Day One, technology has been the friend of the average man, and hugely beneficial. Except the effect comes in two stages. The first is usually only good for the ruling political class and bad for the average guy. Let’s go to Stanley Kubrick’s movie, 2001: A Space Odyssey. Remember the scene where the hominids gathered around the watering hole, and the one hominid comes up with the idea of using a bone as a weapon to beat up the other group? That was early technology. The first guy that gets technology uses it to dominate. But then after a while, it’s monkey see, monkey do. The technology spreads from the inventor or the first utilizer to the population in general, and things equalize. It’s been that way for hundreds of thousands of years. It was true with gunpowder. The first people that got gunpowder ran the State; they used it to keep the peasants at bay. But when it got into the hands of the peasants, they were able to use firearms to take out armored knights, which they couldn’t do before. The tables were turned. That same was true with writing, and then the printing press. At first, they were hoarded by the political classes and priesthoods, who used them to maintain their power. The same with the computer. In the old days of ENIAC and the IBM 360, only a government or a giant corporation could afford them, and they could use them to keep track of all the little people. Now, everybody has a massively powerful laptop or cellphone. Hackers can counterattack. I go into that theme in some detail in Assassin, the third novel in the High Ground septet. It will be released in September—lots of political implications. I urge readers who are interested to get Speculator and Drug Lord now, so as not to fall behind. Speculator is especially relevant because of what’s about to happen with gold stocks. In other words, technology eventually turns the tables to the advantage of the average guy, even though it’s always used to suppress the average guy in the beginning. It was technology that liberated the masses to overturn whatever the current political class might have been at the time. It has nothing to do with democracy, which is just a sop to make the peasants believe they’re in charge. If voting made any difference, they wouldn’t let you do it. It’s a trend that’s going to continue. But it can be years, or even decades, before a new technology finally gets into the hands of the average guy. Then the political class wants to regulate it. The powers-that-be treat all technologies as dangerous. Like guns, they want to keep these things out of the hands of the average guy, basically to keep the peasants from defending themselves. But the cat always gets out of the bag in the long run. It’s a reason for long-term optimism. That said, there’s always a chance of a genuine Dark Age if the old order collapses seriously enough. International Man: Most people are familiar with large, centralized tech companies like Google, Apple, Amazon, etc. But we’ve also seen the development of decentralized technologies that empower the individual, such as encryption and the 3D printing of guns. One key example of this is bitcoin, which is a decentralized form of money. What promise do you think decentralized technologies have for wresting power out of the hands of the State, and what are the implications? Doug Casey: The mistake that people make with things like Facebook— a giant, amoral, and duplicitous corporation—is thinking that just because billions of people use it, it must be harmless. “Oh, it must be kind of decentralized and democratic because it lets everybody communicate with one another.” Giant media corporations like Facebook and Google are dangerous because they can actually form people’s view of reality itself. Much more than newspapers or even TV could. The average person’s understanding of the world, what’s happening, and what other people think is no longer a product of talking to his neighbors or even looking out the window. Their opinions and emotions are now formed by looking at their little screens. That makes them very easy to manipulate. The situation will get worse with Artificial Intelligence and Augmented Reality—somebody will program and control what goes into these things. Maybe subtly, or maybe very overtly. The situation is greatly aggravated by the COVID hysteria in many ways. The solution to the danger, however, is not to regulate them. That would be totally counterproductive. Regulation just means giving even more power to the State—which is innately vastly more dangerous than any corporation. At least corporations have to provide a worthwhile service to stay in business… What we really need is not just one Facebook where everybody goes, and can therefore be easily monitored. What we need is 10,000 Facebooks, so the power devolves to everybody and anybody. The problem will resolve itself in the long run, though. Giant corporations become dysfunctional. Apart from that, they’re subject to the second Law of Thermodynamics as anything else. It’s one of the few laws I believe in. That’s true, politically speaking as well. The world would have been much better off if Bismarck had not united about three hundred minor principalities and kingdoms in Germany in 1871. The world and the Germans would have been much better off in every possible way if they’d stayed three hundred fairly small, not powerful principalities. Same in Italy, with Garibaldi. Today they’d be much better off if there were still scores of little duchies and counties. The same with India, which would be much better off if their hundreds of kingdoms hadn’t been forcibly united by the British. It’s true everywhere. I hope, and actually expect, that places like Germany, Italy, and certainly India will once again devolve into smaller units. The way the Soviet Union broke up into fifteen, and Yugoslavia broke up into six, and Czechoslovakia split into two. The US, which has evolved into a multicultural domestic empire, should—and likely will—split up as well. Editor’s Note: As these trends continue to accelerate, what you do right now can mean the difference between coming out ahead or suffering crippling losses. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive the crisis ahead. It will help you understand what is unfolding right before our eyes and what you should do so you don’t get caught in the crosshairs. Click here to download the PDF now.
International Man: What is your approach to investing, and how does it differ from others? Chris MacIntosh: Firstly, when I look at things, it’s typically undervalued. It’s the old adage: You buy what’s cheap, and you sell what’s expensive. So, what’s cheap? That’s the first step—to look at relative value. The second thing is to look at what we’ve just discussed—the geopolitical environment and overlaying that. Where those two of those things intersect is where we get comfortable allocating capital. That’s our approach. We are now heavily invested in commodities in general—especially energy. We’re probably a little bit early on energy, but if there’s one investment that I think will be spectacular over the next decade, it’s in energy. It’s a value-investing approach overlaid with a global macro outlook. It takes a lot of geopolitical considerations into account. That’s what differs us from others. I mean, there were three strategies that you could have used over the last 20 years. One was buying growth stocks—growth over value; forget about value. Growth is all that mattered. It’s a consequence of the Fed, the ECB, and all central banks destroying the cost of capital, pushing people further down the risk curve. How do you make up for that risk? You go into growth assets. The second has been passive investment. There’s been a complete destruction of value managers, as more capital flowed into “passive investment.” It’s ETFs. It’s indexation. The way that works is, the more capital that goes into it, it triggers all of the black-box algorithms to say, “Well, if XYZ stock sector is above its 52-day moving average, then we allocate another one percent.” That pushes the train higher. That has compounded, where today, within the S&P, the top five companies count for about 24% of the index. That, by the way, is a higher percentage of the top companies within the index, than we had at the tech bubble in the 1990s. At some point, you have a mean reversion. You say, “What’s the catalyst for the mean reversion?” I believe the catalyst to that mean reversion is a massive supply destruction. So, just a small amount of capital from these passive funds starts re-allocating towards these other sectors, and there just isn’t the float available. It’s not there. For example, we could look at gold. Gold, at the moment, within the S&P, is about 0.19% of the index. That includes all the gold companies within it. Imagine you’re an index manager or an index fund—which is just run by a bunch of algorithms—and you have to re-allocate. Your algorithm says, “If a particular sector has outperformed these other sectors within the S&P, we put an extra 5% or 15% into it.” That’s what’s been taking place. Gold has been doing pretty damn well. So, you get to the situation where they’re just re-allocating more and more capital, which pushes that particular portion of the index higher. Gold stocks, in this instance. The same is going to be true of energy. That triggers other passive capital. You start getting this sheep-like behavior driven by algorithms. The extent to which indexation has pushed these other sectors in the last 20 years has the potential to go the other way. That’s quite extraordinary. That’s what you should have done in the past—buy all these growth stocks, so on and so forth. But I think that gig is over. Solvency’s going to matter at some point. Buying these Ponzi scheme companies, like Tesla, which has never made a profit in its life, is extraordinarily dangerous. Now, I’m not prepared to short them either. I don’t think shorting anything in this market is intelligent. We’re into what my buddy calls Project Zimbabwe. So, shorting in that situation is dangerous. International Man: As a professional money manager and a contrarian, where do you see capital going? Chris MacIntosh: As I mentioned before, you want to be buying things that are cheap, and selling those that are expensive. All one needs to do is look at what is cheap relative to what is expensive. Now, that doesn’t mean that what is cheap can’t get cheaper. You’ve always got to be cognizant of the fact that you could be buying Kodak, thinking, “Well, this is bloody cheap.” There are things which fundamentally change that market. We look at that. If you look at the breadth of value versus growth, you can pull up value and growth ETFs and overlay them. Where we’re at today is even greater than the Wall Street crash back in the 1930s. It exceeds the Nifty Fifty bubble that we saw in the 1970s. It exceeds the dot-com bubble of the 2000s. It is the most extreme we’ve ever been. Now, can it get more extreme? Maybe. All investing is a matter of probabilities and then; what is the payout on those probabilities? So, the probability now is so extraordinarily asymmetric. The payout, as a consequence, is greater than it’s ever been before. So right now, we have this idea that inflation is never going to be seen again. All you need to do is have a look at the Japanese 10-year bond, which is about 0.014% at the moment. The German 10-year bond—it’s hovering negative. It’s about half a basis point at the moment. Canada’s 10-year is similar; it’s about 44 bps. All of these are indicators at this point that we’re never going to see inflation again. I think we’re going to have extraordinary shortages at the same time that we’re going through deglobalization. Deglobalization means that supply chains collapse as they are. All those goods and services that you and I have experienced and enjoyed—they won’t be cheap anymore, if available at all. That, quite simply, is inflationary. As long as there is a demand for food and there is an insufficient supply, the only way you correct it is with a price signal. I’m convinced that the incredibly destructive thing we’re going to see in the West is price controls. Governments are going to come in and say, “Those greedy farmers are charging us too much for this food. And our citizens can’t feed themselves. We’re giving them a UBI, but those bastards are charging too much for the bread and everything else.” They’re going to look to take over those industries, and that in itself will be destructive. One of the things that we’re focused on within our funds is not just looking at particular sectors. That’s one thing, but it’s ensuring that we also are looking at the geopolitics of it. For example, you don’t want to be the guy who looked at Venezuela and said, “You know what? We should be invested in this particular space here because they’re going to have an inflationary outcome,” only to do so and find that the government just nationalized the company that you invested in. I think we’re going to see an extraordinary amount of nationalization. So you want to be invested in the right sectors but also in companies that have their assets in countries that are likely to be more favorable towards a capitalist system. We’re very focused on that. International Man: How does the average person play their cards right in this uncertain and increasingly volatile world? Chris MacIntosh: I think it’s always a little bit different for every person. I hate to give people advice. I’d like to walk the walk, and then people can figure out whether that makes sense to them or not. What I believe is, over the next five years, at least, we’re going to have extraordinary chaos. We’re going to have a destruction of supply. We’re going to have Communist-like policies instituted. In this period of time, there is no certainty. We’re not going to see much capital investment into any businesses. Why would you invest in your own business if you fear that a government might change the legislation and take more of it? Or that government will force you to hire a transgender, bipolar, disabled, black woman. These crazy things are actually in the cards. So, you’re not going to put any capital investment in. That’s going to lead capital to seek safety. When you’re looking for that safety, you’re going to look for tangible stuff. It’s also the cheapest—on a relative basis—depending on the sector, for anywhere from the last 30 years to 70 years. At the same time, they’re causing extraordinary monetary inflation. So, that’s where I think the average person needs to be looking at, in terms of capital allocation. The next question is about physical location. Where is it that you want to be? How do you protect the gains that you’re going to make? As I said, we’re going into an exponential blow-off phase. Governments are going to come after everything, in any shape or form. I think it’s important to look at that global landscape, see which countries are relatively free in terms of how they’re going to treat their citizens, how they’re going to treat capital formation, and so on forth. I think that’s the path forward, and that’s the way that I’m playing it. Editor’s Note: We’re headed into one of the most dangerous times for savers, retirees, and anyone who has assets. The political and financial risks to your capital are the largest they’ve ever been in our lifetimes—what you do next could mean the difference between suffering crippling losses and coming out ahead with your wealth intact. Chris just released an urgent new report that explains what is going on and precisely what he is doing with his money and that of his clients. Click here to download it now.
In the short time since the killing of George Floyd, demonstrations have taken place in all fifty US states. Riots have occurred in forty of them. In each of the incidents, many protesters held up signs saying, “Defund the Police.” Of course, no one wants to become a riot victim, but in those cities and states that are Democrat-run, there’s a bit of a hitch: Politicians must be seen to sympathise with protesters, or they will not appear to be sufficiently outraged by “systemic racism.” They must therefore choose between the safety of their constituents and appeasing protesters. This is not an enviable position to be in; yet, since most all politicians regard re-election as overshadowing all other concerns, they can be predicted to follow the irrational wishes of the protesters. Minneapolis, where the protests began, has a population of some 425,000 residents. Only a small fraction of them actually joined the protest, and in fact, even the Democratic governor of Minnesota has stated that 80% of the protestors were from out of town. There are conflicting theories as to whether these 80% were actual sympathisers or were hired by heavily funded organisations that hope to create a dysfunctional situation in Minneapolis and other cities in the US. Not surprisingly, Minneapolis is now the first city whose city council has voted to defund the police. In place of the police will be a department of community safety that will be staffed with people who have no police training whatever. There will, however, be people with expertise in mental health, social services and counselling. The reader could be forgiven if he is inclined to shake his head and say, “But the removal of the police entirely won’t decrease crime, it will invite more crime. Don’t those on the city council understand that?” Well, apparently, yes, they do. In fact, since they themselves will no longer have the protection of the police, they’ve arranged for the city to hire security guards to protect them. Over the past three weeks alone, it has cost the taxpayers of Minneapolis over $60,000 to protect council members. So how can it be that police are not needed by the general public to protect them from rioters and other criminals, whilst the city council members do? Well, one member has explained that need, stating that she has no fear from rioters, but that white nationalists have made her fear for her life. Without seeking to be judgmental, I think it’s safe to say that Minneapolis is in for a crime wave beyond anything it has ever experienced. Inner cities have a penchant for being breeding grounds for chronic street crime. And criminals in inner cities have a long-held record for creating as much crime as they can get away with. The only limitation on the crime level is whatever degree of arrests can be made. And it may be safe to say that social service counsellors will not be making many arrests. Those of us who are not American and don’t live in the US tend to be stupefied by such developments taking place, as the US had, for so long, been regarded by the rest of the world as a paragon of freedom and common sense. In recent years, however, that perception has been tossed in the dustbin. We tend to be stunned that such absurdly self-destructive decisions such as the recent one in Minneapolis could take place, and just as stunned that the majority of Americans, who surely have more sense, would not raise an immediate furor. But this view leaves out an important factor in US political culture. Beginning in the 1960s, American youth began to take their country in a new direction. In countless campus demonstrations, they championed causes such as peace and race relations. This was the baby-boomer generation, and whilst these university students may have been somewhat spoiled and self-focused, they were more numerous than the previous generation and had a huge impact on American society. Also, truth be told, the concepts of peace, racial equality and gender equality unquestionably were laudable and well worth protesting for. Indeed, it might be said that it would be perennially desirable for younger people to question the previous generation, and to offer possible alternatives. Not all would be workable, but it’s healthy for the grand social experiment to be questioned periodically. But, unfortunately, this is not what we’re seeing in today’s America. What we’re seeing is the maturation of political correctness – a movement that at first appeared to be relatively benign. However, from the very first, it contained a telltale dark aspect. Anyone who disagreed with a tenet of politically correct thinking was shamed and sometimes ostracized. Of course, our old friend George Orwell warned us of this approach. He understood that once it took hold – once it had firmly rooted itself in the culture – it would be almost impossible to stop. “War is peace. Freedom is slavery. Ignorance is strength.” This motto was created by Orwell’s “Ministry of Truth,” which dictated whatever the State decided was true at any given time. Today’s Ministry of Truth actually has several outlets – primarily the twenty-four hour news programmes that repeat the same interpretations of events, ad nauseum. And it does seem that the result has been that a percentage of Americans have come to accept the often-ludicrous concepts that are put forward by the Ministry. This is how it’s possible for the politically correct but largely non-factual claim of systemic racism to soon be replaced by the very real systemic chaos. And worse, just as our friend Mister Orwell predicted, the great majority – who thoroughly understand that many politically correct concepts are nonsense – are so fearful of being singled out as not accepting such dogma that they simply remain quiet and allow their once-great country to be converted into a collectivist oligarchy. Of course, that term may startle some as possibly being an overstatement, but once those who value freedom and common sense have effectively been silenced, it’s safe to say that it’s game over. From that point forward, the political class may pass whatever legislation it wishes, with impunity, no matter how illogical or harmful. As Ayn Rand observed, We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force. Editor’s Note: Disturbing economic, political, and social trends are already in motion and now accelerating at breathtaking speed. Most troubling of all, they cannot be stopped. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive the crisis ahead. It will help you understand what is unfolding right before our eyes and what you should do so you don’t get caught in the crosshairs. Click here to download the PDF now.
People believe the State is necessary and—generally—good. They never even question whether the institution is permanent. My view is that the institution of the State itself is a bad thing. It’s not a question of getting the right people into the government; the institution itself is hopelessly flawed and necessarily corrupts the people that compose it, as well as the people it rules. This statement invariably shocks people, who believe that government is both a necessary and permanent part of the cosmic firmament. The problem is that government is based on coercion, and it is, at a minimum, suboptimal to base a social structure on institutionalized coercion. In fact, it’s not only possible but increasingly necessary to minimize organized coercion. For society to function in the 21st century and beyond, the State has to be minimized—a reversal of the current trend. Even while technology controlled by the State makes it ever more dangerous, those same technologies make the State increasingly obsolete. Communication technologies are an example. One of the huge changes brought on by the printing press and advanced exponentially by the Internet is that people can now easily pursue different interests and points of view. As a result, we have less and less in common with each other. Living in the same political jurisdiction is no longer enough to make us “countrymen” with strangers. That’s a big change from earlier times, when members of the same region had almost everything in common, including genetics, language, traditions, religion, and worldview. That’s no longer the case with today’s nation-states. If you’re honest, you may find you now have very little in common with most of your countrymen besides superficialities and trivialities. Ponder that point for a minute. What do you have in common with your fellow countrymen? A mode of living, perhaps a common language, possibly some shared experiences and myths, and a common ruler… but very little of any real meaning or importance. In fact, your fellow citizens are more likely to be an active danger to you than those of a presumed “enemy” country like Iran. If you earn a good living, and certainly if you own a business and have assets, your fellow Americans are the ones who actually present the clear and present danger. The average American (about 50% of them now) pays no income tax. Even if he’s not actually a direct or indirect employee of the government, he’s a net recipient of its largesse—which is to say your wealth—through Social Security, Medicare, Medicaid, and numerous other welfare programs. Not to mention the multitrillion-dollar giveaways of recent months. Over the years, I’ve found that I have much more in common with people of my own socio/economic station in France, Argentina, or Hong Kong than with a US Government employee in Washington or a resident of the LA barrios, a project in Chicago, or a trailer park somewhere. They may or may not be decent people, but we don’t have too much in common. It’s very un-PC to say so, but I suspect that many of you agree with that observation. What’s actually important in relationships is shared values, principles, interests, and philosophy. Geographical proximity and a common nationality are meaningless—no more than an accident of birth. I have much more loyalty to a friend in the Congo—although we’re different colors and have different cultures, native languages, and life experiences—than I do to the Americans who support Bernie, Kamala, and AOC. I see the world the same way my Congolese friend does; he’s an asset to my life. I’m necessarily at odds with many of “my fellow Americans”; they’re an active and growing liability. Some might read this and find a disturbing lack of loyalty to the State. It sounds seditious. As far as I can tell, there are only three federal crimes specified in the U.S. Constitution: piracy, counterfeiting, and treason. That’s a far cry from today’s world, where almost every real and imagined crime has been federalized, underscoring that the whole document is a meaningless dead letter, little more than a historical artifact. I’m not overly concerned about piracy. But the counterfeiting and treason—not to mention over 5000 other, more recently minted, federal crimes, are problematic. Counterfeiting is simple fraud. But the Federal Reserve now legally debases the currency on a gigantic scale. The average American, however, thinks it’s part of the cosmic firmament, assuming he even knows what it is. Treason is usually defined as an attempt to overthrow a government or withdraw loyalty from a sovereign. This is a rather odd proviso, considering the framers of the Constitution had done just that only a few years before. That said, I suspect the government is at risk of a de facto, if not de jure, overthrow in the not too distant future. Its replacement is likely to be even less friendly to freedom. The Constitution was imperfect, even in its original form. Its most important part, by far, is the Bill of Rights. But that’s been interpreted out of existence for all practical purposes. America was a unique and excellent idea, but it’s almost vanished. It’s been replaced by the United States—which isn’t much different from any of the other nation-states that cover the face of the globe like a skin disease. Even the United States is on the slippery slope. The way I see it, Thomas Paine had it right when he said: “My country is wherever liberty lives.” But where does liberty live today? Actually, it no longer has a home. It’s become a true refugee since America withered away. So now what? Here’s where the ongoing communications revolution comes in. It’s facilitated the possibility of Phyles. Phyles The concept of phyles originated with the sci-fi writer Neil Stephenson, in his seminal book Diamond Age. I’ve always been a big fan of quality science fiction. There’s no question sci-fi has been, and still is, a vastly better predictor of social and technological trends than anything else—including full-time “think tanks.” The book, set mostly in China in the near future, posits that while states still exist, they’ve been overwhelmed in importance by the formation of phyles. Phyles are groups of people bound by whatever is important to them. Maybe it will be their race, religion, or culture. Maybe their occupation or hobby. Maybe their worldview or what they want to accomplish in life. Maybe it’s a fairly short-term objective. There are thousands—millions—of possibilities. The key is that a phyle might provide much more than a fraternal or beneficial organization (like Rotary or Lions) does. I take the concept quite seriously. It’s one reason I believe organized charity is on its way out. “Big charity” is mostly a scam to benefit its managers and allow its enablers to feel righteous, while generally degrading its supposed beneficiaries. Phyles would know their members personally, obviating most fraud and self-aggrandizement. In the same vein, phyles might provide insurance services very effectively, since a like-minded group—held together by peer pressure and social approbation—eliminates a lot of moral risk. It might very well offer protection services; a criminal might readily harm a citizen “protected” by a State. But they’ll think twice before attacking members of the Mafia—which is, in fact, a criminal variety of phyle. People are social. They’ll inevitably organize themselves into groups for all the reasons you can imagine. In the past, technology only allowed people to organize themselves by geography—they had to be in the same area. That’s changed over the last century, with the emergence of the train, the car, and especially the airplane. The same goes for communication. The telephone and television were huge leaps, but the Internet is the catalytic breakthrough. It’s now possible for people to reach out all over the world to find others that are their actual countrymen, not just some moron who shares a piece of government ID. As things develop, people will discover—or create—places where their loyalties lie. The nation-state has mostly been a counterproductive and expensive nuisance; it’s rapidly becoming completely insufferable and, as governments bankrupt themselves, dangerous. The people living off the State (those who act as parasites upon their “fellow citizens”) are going to resist having their rice bowls and doggy dishes broken. They’ll undoubtedly use the coercive powers of the State to try to maintain the status quo. The military and the police will be out in force, wearing riot gear, in the next few years. They’re necessary to maintain order in today’s world. But remember, their loyalties are first to their coworkers, then to their employer, and only then to those whom they’re supposed to “serve and protect.” You can’t rely on them. You’re much better off finding a protophyle… as the real thing evolves. The next decade is going to be tumultuous. The Greater Depression has been catalyzed by the mass hysteria surrounding COVID-19. The virus will go away in the next few months, the way they all do. But the damage the hysteria has caused will linger and compound. I suspect the bankruptcy of most States, as well as major sections of the population, are going to result in some major political and social upsets. We’re just at the start of a new era. The State will use an intimidating variety of technologies to keep its subjects under control. Even while the Reds and the Blues—who’ve come to hate each other—each try to gain control of it. The State will do any number of things to maintain itself, its cronies, and accompanying parasites—who all, in turn, support it. But while that happens, free thinkers will use evolving technologies to find each other and reorient their loyalties. More and more people will conclude the State no longer serves a useful purpose. Editor’s Note: A government-led crisis is already underway in the US and throughout the rest of the world. If you want to navigate the complicated economic and political situation that is unfolding, then your need to see this free report from best selling author Doug Casey and his team. It reveals what you need to know as the crisis deepens, and what you should do so you don’t get caught in the crosshairs. Click here to download the PDF now.
Since earning the nomination as the 2020 Democratic candidate for the presidency, Joe Biden has stated that he is a “transition candidate.” This was an odd statement, especially for someone who has hardly begun his formal campaign. (He’s not even in office yet and he’s discussing being on the way out?) Yet this was not just another one-off Biden gaff, as has been suggested by some. Since announcing his pick for vice president, he has stated, “Look, I view myself as a bridge, not as anything else.” So what’s up here? The candidate is only a place-holder for the real, intended president? Well, let’s have a look at that possibility. Joe Biden, by any measure, is a poor candidate for the office. After almost half a century in politics, he’s had a career mostly as a political hack who would support any issue that seemed popular at the time. Similarly, his voting record in the Senate has been that of a man who supported whatever bill would please his peers and further his career. Seemingly, he either has no inner core of belief, or he’s been willing to sacrifice it at a moment’s notice, if it might help his next election. After forty-seven years of elected office, he’s not regarded as having a commitment to… well, anything. And yet he became the choice of the Democratic party as one candidate after another dropped out of the presidential race. Clearly this was a party that was not only leaderless, but couldn’t even seem to invent a leader for the sake of the election. Kamala Harris, his presumptive vice president, dropped out of the presidential race in December 2019, when her popularity amongst democrats dropped to 3.4%. Since democrats make up roughly half of the population, this means that less than 2% of Americans would have wanted her as their president. And yet, as stated above, candidate Biden announces, “Look, I view myself as a bridge, not as anything else.” That’s quite curious. He apparently is stating that his only purpose is to win the election, then pass the baton to the next leader. Presumably, his vice president. This has never occurred in US politics, although it is true that, at this point, Mr. Biden may well be too far gone to even begin to handle the job. And that leads us to the possibility that the deal has already been brokered – that Mr. Biden would win the election, then have, let’s say, a “medical emergency,” at which point he would pass the reins to the new president – Kamala Harris. Clearly, Ms. Harris could not have been elected on her own merit, as even democrats found her to be fundamentally lacking last December. Even the more radical elements of the party have sensed that she is untrustworthy and even dangerous. At this point in America’s history, there’s much debate as to whether the president is the supreme leader, or whether he or she is merely the face presented by the Deep State, who run the country from the background and give the president his marching orders. Either way, this eventuality would not bode well for the US. As supreme leader, Ms. Harris, based upon her reputation, would be an autocratic figure who behaved rather ruthlessly toward those who failed to comply with her edicts. But as the figurehead for the Deep State, she would be a very powerful tool, implementing the loss of freedoms that were passed into law with the 2001 USA PATRIOT Act and the 2011 National Defense Authorization Act. These two acts, taken together, essentially eliminate the US Constitution in practical terms. All that’s necessary to implement them would be for a highly demonstrative president to declare a national emergency. Both acts would then be in force. It would not be difficult to imagine Ms. Harris in this role. Presently, we’re watching a very odd set of events unfolding in the US. Major cities have seen months of continual protests and even rioting, which apparently have been very organized and well-funded. In a normal situation, the mayors and governors would call in the police to quell such riots. Yet we’re seeing the opposite. Local political leaders are consistently hamstringing local police, making it impossible for them to do their jobs, thereby increasing the extent of devastation by rioters. Rioters are routinely let off with a slap on the wrist, whilst those who defend their homes from rioters are arrested and charged. This, of course, is the exact opposite of what the Rule of Law is meant to achieve. There’s every reason to believe that this condition will continue to worsen well after the 2020 election, and at some point, Americans from both the right and left will find themselves begging for the federal government to step in – to return the US to a state of relative safety. Central governments, of course, perennially dislike local policing, as local police tend to be loyal their own communities. However, federal troops have no such loyalty. They perform as their superiors dictate, regardless of where they are deployed. But once the local police have been gotten out of the way, it would be quite easy for an authoritarian president to deploy federal troops to re-establish order, and initially, this would meet with the approval of worried Americans. Historically, this has occurred countless times throughout the world. In every case, martial law is instituted as a “temporary measure,” to quell existing unrest. But, as Milton Friedman said, “Nothing is so permanent as a temporary government program.” If this development is in America’s future, as events indicate, it’s likely that the media will repeat the words, “public safety” endlessly as the situation unfolds. The words “martial law” and “police state” may be heard amongst some of the populace, but will be unlikely to dominate the news programmes. Another word that’s unlikely to appear often in the media is “tyranny,” yet this will be precisely the result of the introduction of a police state. But all the above is dependent upon a political leader who has the forceful demeanour to ensure that the job gets done with a minimum of dissent. The American public are therefore left to ponder whether it may be that a vastly unpopular Trojan donkey may be closer to the presidency than she presently appears. Editor’s Note: Disturbing economic, political, and social trends are already in motion and now accelerating at breathtaking speed. Most troubling of all, they cannot be stopped. There will likely be unprecedented volatility of every kind in the months and years ahead. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive the crisis ahead. It will help you understand what is unfolding right before our eyes and what you should do so you don’t get caught in the crosshairs.
The terms liberal (left) and conservative (right) define the conventional political spectrum. But the terms are floating abstractions, with meanings that change with every politician. In the nineteenth century, a “liberal” believed in free speech, social mobility, limited government and strict property rights. The term has since been appropriated by those who, while sometimes still believing in limited free speech, always support strong government and weak property rights and who see everyone as a member of a class or group. Conservatives have always tended to believe in strong government and nationalism. Bismarck and Metternich were archetypes. Today’s conservatives are sometimes seen as defenders of economic liberty and free markets, although that is mostly only true when those concepts are perceived to coincide with the interests of big business and economic nationalism. Locating political beliefs on an inaccurate scale, running only from left to right, constrains political thinking. It’s like trying to reduce chemistry to the elements with air, earth, water and fire. Politics is the theory and practice of government. It concerns itself with how force should be applied to control people, which is to say, to restrict their freedom. It should be analyzed on that basis. Freedom is indivisible, but in the abstract, it can be seen as composed of two basic elements: social freedom and economic freedom. According to current usage, liberals tend to allow social freedom but restrict economic freedom, while conservatives tend to restrict social freedom but allow economic freedom. An authoritarian (they now style themselves “middle-of-the-roaders”) want both types of freedom restricted. But what do you call someone who believes both social and economic freedom should be allowed maximum rein? Unfortunately, something without a name may get overlooked, or if the name is only known to a few, it may be ignored as unimportant. That may explain why so few people who believe in both of these dimensions of freedom know they are libertarians. A more useful way of looking at the political field can be found in the diagram below: Source: Advocates for Self-Government A libertarian believes individuals have a right to do anything that doesn’t impinge on the common-law rights of others—basically anything but force or fraud. Libertarians are the human equivalent of the Gamma rat, which bears a little explanation. Some years ago, scientists experimenting with rats categorized the vast majority of their subjects as Beta rats. These are followers who get the Alpha rats’ leftovers. The Alpha rats establish territories, claim the choicest mates, and, generally, lord it over the Betas. This pretty well corresponded with the way the researchers thought the world worked. But they were surprised to find a third type of rat as well, the Gamma. This creature staked out a territory and chose the pick of the litter for a mate, like the Alpha, but didn’t attempt to dominate the Betas, a go-along-get-along rat. A libertarian rat, if you will. My guess, mixed with a dollop of hope, is that as society becomes more repressive, more Gamma people will tune in to the problem and drop out as a solution. No, they won’t turn into middle-aged hippies weaving baskets and stringing beads in remote communes; rather, they will structure their lives so that the government—which is to say taxes, regulation, and inflation—is a nonfactor. Hippies used to ask: suppose they had a war and nobody came? Personally, I would take it further: suppose they had an election and nobody voted; levied a tax and nobody paid; imposed regulation and nobody obeyed? Libertarian beliefs are strong among Americans, but the Libertarian Party has never gained much prominence, possibly because the type of people who might support it have better things to do than play political games. Even among those who believe in voting, many tend to feel they are “wasting” their vote on someone who can’t win. But voting is itself another part of the problem. None of the Above Since 1960, the trend has been for an ever-smaller percentage of the electorate to vote. Increasingly, the average person is fed up or views elections as pointless. In some years, more than 98 percent of incumbents retain office. That is a higher proportion than in the Supreme Soviet of the defunct U.S.S.R., and a lower turnover rate than in Britain’s formerly hereditary House of Lords, where people lost their seats only by dying. The political system in the United States has, like all systems that grow old and large, become moribund and corrupt. The conventional wisdom holds that this decline in voter turnout is a sign of apathy. But it may also be a sign of a renaissance in personal responsibility. It could be people saying: “I won’t be fooled again, and I won’t lend power to them.” Politics has always been a way of redistributing wealth from those who produce to those who are politically favored. As H. L. Mencken observed, an election amounts to no more than an advance auction of stolen goods—a process few would support if they saw its true nature. Protesters in the ’60s had their flaws, but they were quite correct when they said, “If you’re not part of the solution, you’re part of the problem.” If politics is the problem, what is the solution? I have several answers that may appeal to you. The first step in solving the problem is to stop actively encouraging it. Many Americans have intuitively recognized that government is the problem and have stopped voting. There are at least five reasons many people don’t vote: Voting in a political election is unethical. The political process is one of institutionalized coercion and force; if you disapprove of those things, then you shouldn’t participate in them, even indirectly. Voting compromises your privacy. It gets your name in another government computer. Voting, as well as registering, entails hanging around government offices and dealing with petty bureaucrats. Most people can find something more enjoyable or productive to do. Voting encourages politicians. A vote against one candidate—a chief, and quite understandable, reason many people vote—is always interpreted as a vote for his opponent. And even though you may be voting for the lesser of two evils, the lesser of two evils is still evil. It amounts to giving the candidate a tacit mandate to impose his will on society. Your vote doesn’t count. Politicians like to say it counts because it is to their advantage to get everyone into a busybody mode. But statistically, one vote in scores of millions makes no more difference than a single grain of sand on a beach. That’s entirely apart from the fact that officials manifestly do what they want, not what you want, once they are in office. Some of these thoughts may impress you as vaguely “unpatriotic”; it’s certainly not my intention to “trigger” anyone. But unfortunately, America isn’t the place it once was, either. The United States has devolved from the land of the free and the home of the brave to something more closely resembling the land of entitlements and the home of whining lawsuit filers. The founding ideas of the country, which were intensely libertarian, have been thoroughly perverted. What passes for tradition today is something against which the Founding Fathers would have led a second revolution. This sorry, scary state of affairs is one reason some people emphasize the importance of joining the process, “working within the system” and “making your voice heard,” to ensure that “the bad guys” don’t get in. They seem to think that increasing the number of voters will improve the quality of their choices. That argument compels many sincere people, who otherwise wouldn’t dream of coercing their neighbors, to take part in the political process. But it only feeds power to people in politics and government, validating their existence and making them more powerful in the process. Of course, everybody involved gets something out of it, psychologically if not monetarily. Politics gives many people a sense of belonging to something bigger than themselves, and so has special appeal for those who can’t find satisfaction within themselves. We cluck in amazement at the enthusiasm shown at Hitler’s giant rallies but figure that what goes on here, today, is different. Well, it’s never quite the same. But the mindless sloganeering, the cult of personality and certainty of the masses that “their” candidate will kiss their personal lives and make them better are identical. And even if the favored candidate doesn’t help them, then at least he’ll keep others from getting too much. Politics is the institutionalization of envy, a vice that proclaims: “You’ve got something I want, and if I can’t get it, I’ll take yours. And if I can’t have yours, I’ll destroy it, so you can’t have it, either.” Participating in politics is an act of ethical bankruptcy. The key to getting “rubes” (i.e., voters) to vote, and “marks” (i.e., contributors) to give is to talk in generalities while sounding specific and to look sincere and thoughtful yet decisive. Vapid, venal party hacks can be shaped, like Silly Putty, into saleable candidates. People like to kid themselves that they are voting for either “the man” or “the ideas.” But few campaign “ideas” are more than slogans artfully packaged to push the right buttons. Voting “the man” doesn’t help much, either, since these guys are more diligently programmed, posed and rehearsed than any actor. This is probably truer today than it has ever been since elections are now won on television, and television is not a forum for expressing complex ideas and philosophies. It lends itself to slogans and glib people who look and talk like game show hosts. People with really new ideas wouldn’t dream of introducing them to politics because they know such ideas can’t be explained in sixty seconds. I’m not intimating, incidentally, that people disinvolve themselves from their communities, social groups, or other voluntary organizations—just the opposite since those relationships are the lifeblood of society. But the political process or the government is not synonymous with society or even complementary to it. The government is a dead hand on society. “Wait, wait,” I can hear many of you saying, “That may all be true in theory. But it’s irrelevant in 2020; this time it’s different. We’re on the cusp of a civil war in the US. It makes a big difference who wins this time.” That’s true enough. Whoever runs a government can, indeed, make a huge difference sometimes. France was different under Louis XVI than it was under Robespierre, and Russia was different under Nicolas II than it was under Lenin. At this point, the US will be different under Trump than under the Democrats. I’ll explore the likelihood of a Trump victory or loss next week. And what happens next. Editor’s Note: Disturbing economic, political, and social trends are already in motion and now accelerating at breathtaking speed. Most troubling of all, they cannot be stopped. There will likely be unprecedented volatility of every kind in the months and years ahead. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive the crisis ahead. It will help you understand what is unfolding right before our eyes and what you should do so you don’t get caught in the crosshairs.