LIVE FROM ó WHEN MONEY DIES: A CASEY RESEARCH / SPROTT INC. SUMMIT
— LIVE FROM — WHEN MONEY DIES: A CASEY RESEARCH / SPROTT INC. SUMMIT
By Kevin Brekke
The vibe had changed noticeably. Waiting patiently to receive my morning fix from the lobby barista, a sense of anticipation charged the air that was absent the previous day. The dress code had undergone a transformation as well, a little more “resort snappy” with the coveted Casey Research lanyard and badge the accessory du jour. And the main presentation room was beginning to fill early by attendee’s intent on a seat at the front of the room. A subdued murmur of warm conversations among new and old acquaintances presaged another hot day in the desert.
Yes, this was the day… Summit kick-off day.
The official starting hour neared, the packed main presentation room fell hushed as David Galland, the Summit’s host, approached the podium and introduced the first speaker and our company’s namesake, Doug Casey.
The roar of applause cut through the excitement as Doug took the stage. And from the first words, his inimitable style, wit, and unique insight were front and center.
Casey Research subscribers will be familiar with Doug’s view of today’s chronic global crisis – we are exiting the eye of the storm and headed for trouble. Doug has long warned of the impending Greater Recession that awaits America and so many other world economies. So it was fitting that the title of Doug’s talk was,
“The Greater Depression is Now.”
To ensure that everyone would be on the same page, Doug began with a “definition” of government as the monopoly of force within a certain geographic location. And that government will use this force in a coercive manner to get what they need. As the Greater Depression grinds on, and tax revenues fall and interest costs on the national debt rise, the government will find itself in desperate need of more money – your money, of course.
He pointed out that during depressions the rich usually do okay, and the poor, having little to lose and on the government gravy train, will get by – they will demand and get more help from government.
It is the middle-class that will get killed. Why? Because the middle-class saves in dollars. When the dollar is ultimately destroyed, the middle-class will be as well.
His talk was peppered with some great Casey-esque one-liners that drew roars of laughter. My favorite: when observing that the government has no business in the letter delivery business, and comparing the bankrupt USPS to profitable FEDEX, he rhetorically asked: Why is it you never hear about an employee going FEDEX?
A classic Casey moment.
A hard act to follow, indeed. Yet Bud Conrad gave the audience all the data and analysis to support Doug’s Greater Depression forecast.
Maintaining the summit’s course heading – dying currencies – Bud started with a few slides of ancient Roman coins showing an evolution through several iterations: first minted from gold; then copper was added; then copper was the major alloy; and finally there was no gold content. The money was systematically debased until it became worthless.
This is an early example of inflation.
It is no coincidence, he points out, that as money is debauched it undermines the cohesion of a society. The decline of honest money goes hand in hand with the decline of a country. This is what the US is experiencing today – the decline and fall of the American Empire.
With the advent of fractional reserve banking and the use of paper representations of money – today’s ubiquitous paper bills of credit backed by debt – Bud succinctly observed that economies can’t be strong on the shoulders of debt.
Lots of synchronized head nodding followed.
Bud took us through a history of charts that placed the current US government debt and borrowing situation in context. By several measures, including the debt to GDP ratio, the US is in the middle of a pack of countries on the road to experiencing their own Greek moment.
Bud’s data-and-analysis packed presentation covered way more than can be summarized here, and finished with his forecasts for the economy, interest rates, commodity prices, and a bunch of other indicators. So I’ll end with my favorite quote: when referring to the ease with which digital money is created, Bud noted that it (digital money) isn’t worth the paper it isn’t printed on. Funny, yet tragically true.
Next up, Casey Research was honored to introduce Richard Maybury in a rare public appearance. Regarded is one of the top free-market writers in America and, for me, his speech was powerful, emotional, and provocative.
Richard began by warning that even if all the calls and predictions at the conference are false; the dollar will still fall because of war.
He began his argument for the inevitability of war by stating that the fundamental problem is political power and its corrupting influence on moral judgment.
The Treaty of Westphalia in 1648 established the ideal of non-intervention into the affairs of states, and recognized that a clear and present danger must exist before an act of aggression against another state could be taken. These were laws based on logic and ethics. Reduced to a basic maxim, Richard said that means my right to swing my fist ends at the start of your nose.
Richard pieced together the historical facts into a disturbing picture of today’s reality: a clear and present danger is no longer needed for acts of aggression. The state just needs to think that the other side is up to no good. Logic and ethics are dead and we are entering a dog-eat-dog era of aggression.
There is far more to his argument that can be covered in this space. Richard coined the term “chaos-stan” (the land of chaos), and warned that a state that disregards laws based on logic and ethics is headed for war. And a byproduct of war is the destruction of the currency.
At the conclusion of Richard’s presentation, he took several poignant audience questions. To listen to this one-hour segment of the summit alone is worth the price of our audio set of the entire summit.
If you'd like to hear all that Richard Maybury, Doug Casey, Bud Conrad, and the other 24 blue-ribbon faculty members are saying at the summit this weekend, order the complete When Money Dies audio set before the end of he summit, October 3, and get $100 off the post-show price.
That’s it for today. I’ll be back tomorrow with an update of the day’s happenings.
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LIVE from the WHEN MONEY DIES: A Casey Research/ Sprott Inc. Summit © 2011 Casey Research