Editor's Note: There is only one real way to create wealth and that is to build something. If you take $50,000 worth of lumber, metal and glass and combine it with $50,000 worth of skilled labor you can come up with a $150,000 house. You have in effect created $50,000 out of thin air. Or by machining a $2.00 lump of metal you can create a $20.00 gear or a $200 watch. It all depends on the skillful application of technology to raw materials. Everything else is just rearranging deck chairs on the Titanic. In the short term, rearranging deck chairs can be very profitable for an individual but it doesn't "create wealth" it simply transfers it from one person to another. The rapid pace of … [Read more...]
How Does Gold Fare During Hyperinflation?
By Jeff Clark, Casey Research Inflation is a natural consequence of loose government monetary policy. If those policies get too loose, hyperinflation can occur. As gold investors, we'd like to know if the precious metals would keep pace in this extreme scenario. Hyperinflation is an extremely rapid period of inflation, but when does inflation (which can be manageable) cross the line and become out-of-control hyperinflation? Philip Cagan, one of the very first researchers of this phenomenon, defines hyperinflation as "an inflation rate of 50% or more in a single month," something largely inconceivable to the average investor. Hyperinflation has One Root Cause While there can be … [Read more...]
Why is the US Federal Government Afraid of Deflation?
Deflation: Harry Dent "Understanding Demographics Is Vital to Success" In this segment from one of his talks at the Casey Research Recovery Reality Check Summit, economics expert and author Harry Dent explains how shifting demographic trends lead to economic cycles and why the current US federal government is so afraid of deflation. https://youtu.be/d3EZlY-29Ss Harry's complete presentation – as well as the speeches of 30 other economic and investment luminaries from this Summit – is available to you in MP3 or CD format. Listen to experts like David Stockman, Harry Dent, Lacy Hunt, James Rickards, John Hathaway, Chuck Butler – their assessment of what investors should expect and … [Read more...]
How to Speculate your Way to Success
Everybody Forced to Speculate? According to an interview with Doug Casey, "Everybody is going to be almost forced to be a speculator to try to stay in the same place. Speculating means capitalizing on politically caused distortions in the marketplace." ~editorHow to Speculate your Way to Success Source: JT Long of The Gold Report (4/20/12) So far, 2012 has been a banner year for the stock market, which recently closed the books on its best first quarter in 14 years. But Casey Research Chairman Doug Casey insists that time is running out on the ticking time bombs. Next week when Casey Research's spring summit gets underway, Casey will open the first general session addressing the … [Read more...]
Why Deficits Are Politically Convenient
Terry Coxon of Casey Research discusses the effects of deficits on the economy and politics. ~editor Deficits: How Far to the Wall? By Terry Coxon, Casey Research Decades of manipulation by the Federal Reserve (through its creation of paper money) and by Congress (through its taxing and spending) have pushed the US economy into a circumstance that can't be sustained but from which there is no graceful exit. With few exceptions, all of the noble souls who chose a career in "public service" and who've advanced to be voting members of Congress are committed to chronic deficits, though they deny it. For political purposes, deficits work. The people whose wishes come true through the … [Read more...]
What Happens to Gold if We Enter a Recession or Depression?
By Jeff Clark, Casey Research Mayan prophecies aside, many of the senior Casey Research staff believe that economic, monetary, and fiscal pressures could come to a head this year. The massive buildup of global debt, continued reckless deficit spending, and the lack of sound political leadership to reverse either trend point to a potentially ugly tipping point. What happens to our investments if we enter another recession or – gulp – a depression? Here's an updated snapshot of the gold price during each recession since 1955. … [Read more...]
Is Gold Backwardation Now Permanent?
Its Weight in Gold: The Real Prices of Things By Keith Weiner, Casey Research Worldwide, an incredible tower of debt has been under construction since President Nixon's 1971 default on the gold obligations of the US government. His decree severed the redeemability of the dollar for gold and thus eliminated the extinguisher of debt. Debt has been growing exponentially everywhere since then. Debt is backed with debt, based on debt, dependent on debt and leveraged with yet more debt. For example, today it is possible to buy a bond (i.e., lend money) on margin (i.e., with borrowed money). The time is now fast approaching when all debt will be defaulted on. In our perverse monetary system, … [Read more...]
Exploring the Not-So-Altruistic Aspects of the “Buffett Rule”
By Robert Ross, Casey Research This week, President Obama released his $3.8-trillion budget for fiscal year 2013. The plan calls for new taxes on the wealthy, a restructuring of the tax code, and short-term infrastructure spending aimed at boosting the economy (albeit artificially). Also included in the budget are limitations on subsidies for oil and gas companies, an end to the Bush tax cuts, and a proposal to raise taxes on dividends, which could be as high as 39.6% for households making over $250,000 per year. Although Senate Minority Leader Mitch McConnell (R-KY) dismissed the proposal as "a campaign document," the White House claims the measure would generate $206 billion in … [Read more...]
The Fed Resumes Printing
By Bud Conrad, Casey Research The Federal Reserve recently announced important policy changes after its Federal Open Market Committee (FOMC) meeting. Here are the three most important takeaways, in its own words: The Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions – including low rates of resource utilization and a subdued outlook for inflation over the medium run – are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. The Committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for … [Read more...]
The US Government Is Bankrupt
By Doug Casey, Casey Research Everyone knows that the US government is bankrupt and has been for many years. But I thought it might be instructive to see what its current cash-flow situation actually is. At least insofar as it's possible to get a clear picture. As you know, the so-called Super Committee recently tried to come up with a plan to cut the deficit by $1.5 trillion and failed completely. To anyone who understands the nature of the political process, the failure was, of course, as predictable as it was shameful. What's even more shameful, though, is that the sought-after $1.5 trillion cut wasn't meant to apply to the annual budget but to the total budget of the next 10 years … [Read more...]
