Doug Casey on the Year the World Falls Apart
Doug Casey on the Year the World Falls Apart by Doug Casey for Casey Research
Justin’s note: It’s “Totally Incorrect” week here at Casey Research…
But today’s essay may be the most controversial one yet…
Doug says a disaster of historic proportions is on the menu for 2019.
And it’s critical to understand what’s happening.
Read on for four specific predictions about what lies ahead. Some of these predictions may seem outlandish… but you owe it to yourself to hear what he has to say…
By Doug Casey, founder, Casey Research
Prediction 1: The End of Retirement
The average American can forget about retirement. We’ve all heard these stories about how the average American couldn’t lay his hands on $1,000 to save his life. His expenses aren’t going away, however, even if his income does.
It seems like things have reached a critical mass. And if the economy slows down there are going to be a lot of people losing their homes again. They’ll be unable to pay their credit card bills, their car payments, their student loans, or anything else. They aren’t going to be able to buy anything. They wound up in breadlines in the ’30s. But today 40 million Americans have SNAP cards to take away the hunger pains and embarrassment of being penniless. There could be 100 million in a few years.
I know this sounds outrageous because right now everything is running fairly smoothly. The standard of living of the average middle-class American has degraded slowly over decades but hasn’t yet totally collapsed. But that’s the way it is a day before a volcano explodes, or a day before an earthquake, or minutes before an avalanche starts coming down.
This isn’t a theoretical discussion. Most retirement plans are in serious jeopardy. Many pension funds are already seriously underwater, even after a very long boom.
The situation is likely to deteriorate. The stock market is in a bubble. The bond market is in a hyper bubble. A lot of value could disappear very quickly. By the time this depression bottoms, in today’s dollars – I don’t know what the dollars are going to be worth – the Dow could trade at 5,000, or less. We’re going to see interest rates exceed what we saw in the early 1980s, when the U.S. government was paying 15%.
From a retiree’s point of view, things are not going to improve. It’s going to get worse, not better. His savings, if he has any, are going to be attacked from several angles. I don’t see any way out of this. Unless friendly aliens land on the roof of the White House and present Trump with some kind of magic technology.
Prediction 2: A White Male Privilege Tax, and Other Radical Tax Hikes
You’ve got to remember that the prime directive of any organism, whether it’s an amoeba, a person, a corporation, or a government, is to survive. Bankrupt governments – and they’re all bankrupt because of welfare state policies – are going to fight to survive. The only way that they can survive is to tax more and print more money. And that’s exactly what they’re going to do. Of course, don’t discount a war; these fools actually believe that would stimulate the economy – the way only turning lots of cities into smoking ruins can.
I suspect they’ll try to make white males bear most of the burden. That’s partly because they still have most of the money. And partly because it’s become fashionable to hate white males in particular. It’s natural to want to hurt people that they think are the problem – what Marxists would say are the “class enemy.”
We’re going to see much higher taxes, among other unsavory things. There’s no other way to pay for welfare state programs, except sell more debt to the Fed – which they’ll also do, by necessity. Inflation will get out of control as a result.
Of course, you’ve got to remember that as recently as the Eisenhower administration the top marginal tax rate was theoretically 91%. The average person didn’t pay anywhere remotely near that because it was a steeply progressive tax rate. Nobody did, frankly, especially the rich, because there were loads of tax shelters, which no longer exist. Hiding money offshore, among other things, was easy. Now these things are out of the question.
Now there’s no place to hide from the State. And envy is rampant. How bad could it get? In Sweden during the 1970s, the marginal tax rate, including their wealth tax, was something like 102%. So, almost anything is possible.
Of course they’ll raise taxes radically. It’s time to eat the rich.