International Man: How would you summarize what you see coming in 2024?
Doug Casey: I hate to sound a pessimistic note, but you have to call them as you see them. News flash: There are storm clouds on the horizon. I’m tempted to say the presage “The Perfect Storm,” but the phrase has become hackneyed… and it understates the case. Instead, let me say I think it will be worse than even I think it could be.
The trend that’s brought us here has been building for the last hundred years. It’s been compounding upon itself, and the curve looks exponential. The only factor that gives me pause is that almost everyone now sees a tsunami coming. And reality usually confounds beliefs that “everyone” has. Perhaps The Greater Depression will just turn out to be fear porn. But that’s not how I’m betting.
We’re looking at a potential financial and economic collapse. And, a social collapse, largely a result of wokeness, a putrid stew of socialism, entitlement, overt hatred, covert hostilities, and insane views on race and gender. These things will underwrite a huge political upset in this election year.
Of course, our most basic problem is an ongoing cultural collapse. The average American no longer believes in the idea of America. Forget about the American dream. Most, not just Wokesters, now see it as a delusion, a fraud, or even a nightmare.
Traditional cultural values are being purposefully washed away. Forces within are actively trying to destroy the things that made America.
Is 2024 going to be the year where it all comes to a head? There’s an excellent chance that it will. But I expect the rest of the decade won’t be any better.
International Man: As we enter the new year, the Middle East is on the cusp of the largest regional war in generations.
It is already having massive implications for the global economy as many shipping firms have stopped going through the Red Sea.
Where do you see this conflict headed in 2024, and what are the implications?
Casey: 12% of the world’s shipping traffic goes through the Red Sea and Suez Canal. The Houthis, a Shiite sect that controls the part of Yemen at the entrance to the Red Sea, are in a position to block it off to punish Israel and its friends. The US just sank a few Houthi boats that were attacking a freighter. My question is: Why? The US has approximately zero traffic in the Red Sea. Houthi piracy is a problem for China, the Europeans, or the Egyptians—not a failing and bankrupt empire on the other side of the world.
There’s absolutely no practical solution to the Israel-Palestine problem. This isn’t the forum to go over all the arguments about who stole the benighted area from who. Besides, it goes much deeper than that. It’s a conflict between the Jews and the Mohammedans. The difference between them is much, much greater than that between the red people and the blue people in the US.
Consider the fact that there are almost 2 billion Muslims in the world, most of whom take their religion very seriously. There are about 7 million Jews in Israel, perhaps 6 million more in the US, and maybe another couple million scattered elsewhere. Those are not good odds. The Jews are now extremely paranoid because of “river to the sea” marches everywhere in the West, and the Muslims are extremely angry with what they see as a genocide of fellow Ummah members by a historical enemy.
Will the Israelis use nuclear weapons if they feel they’re about to be overrun? I have no doubt that Israel will do whatever they think they need to do.
Meanwhile, anybody can have a nuclear weapon today. The Israelis have had them since the ’60s. The North Koreans—one of the poorest and most backward countries in the world—have had them for over a decade. An upper-middle-class US family can probably buy or create their own nuclear weapon. Although cyber or bioweapons are much cheaper and much more effective.
The Middle East problem not only can’t be solved peacefully, it can’t be solved at all. We can only be sure that Israel’s enemies are much, much better prepared for a conflict than they’ve been in the previous three wars Israel fought.
There’s absolutely nothing we can do about it, except one thing that’s critically important. The US must stay out of it. And stop treating Israel like a 51st state.
The Arabs view Israel and the US as a mean dog and its master. Sometimes, the master whips the dog. Sometimes, the dog bites the master. But you’re not sure which one is which.
The only solution is to stay out of it and follow Thomas Jefferson’s advice: “peace, commerce, and honest friendship with all nations, entangling alliances with none.”
Maybe the Middle East will quiet down. Maybe the US will stop provoking the Russians. Maybe the US will stop provoking the Chinese. Maybe the bad things I noted earlier will disappear. But that’s not the way to bet.
International Man: It seems that during every election, many people believe the cliche that it’s the most important one of our lifetimes.
However, with the country the most divided since the War Between the States, the 2024 presidential election could actually be the most important one in our lifetime. What’s your take?
Casey: I agree. It is going to be the most important election of our lifetime.
Looking at relatively recent elections, the 1932 election that installed Roosevelt was critically important. Roosevelt, in effect, nationalized the US economy and set up the current welfare, warfare, and administrative state. Although truth be told, Hoover might have been as bad.
Elections can make a huge difference—like the 1933 German election that installed Hitler.
More recently, the 1952 election between Dwight Eisenhower and Adlai Stevenson was very important. Had Stevenson won, he would’ve accelerated the trend towards socialism and fascism in the US. Eisenhower slowed it down.
The 1964 election between Lyndon Johnson and Barry Goldwater was critical. The defeated Goldwater wanted to roll back the State; Johnson went on to install his disastrous Great Society programs. In 1980, Reagan ran saying, “If not us, who? If not now, when?" Although those questions went unanswered, he was vastly better than his forgotten opponents.
But starting in 1988, when George H.W. Bush ran against Michael Dukakis, I don’t see that it’s really made any real difference which character won. For more or less the last 35 years, there’s been very little difference between the right and the left wings of the Demopublican Party, which we can call the Uniparty.
Both wings fully support both the welfare state and the warfare state. It’s just that the Democrats emphasize some things, and the Republicans cyclically emphasize others.
So, who’s going to be the next president of the US?
I’d say the odds of the Democrats running Biden and Harris approach zero. Biden is obviously senile, decrepit, and corrupt. And Harris is manifestly stupid.
So, who will they run? I suspect they’ll pick a leftist general, perhaps Petraeus. The military is about the only part of the government in which Americans still have any trust. And they will—incorrectly—assume a general can fix all the forever wars.
On the Republican side, Trump has the overwhelming support of the average red person.
Now, who’s going to win?
I put my money on Trump in 2016 and Biden in 2020 (link). This time, I’m betting on the Democrats again because they’re much more adept at cheating. Perhaps they’ll find some ultra-serious crisis that will, believe it or not, allow the election to be put off. But they’re actual Jacobins who’ll do anything to hold on to power.
But if Bobby Kennedy gets traction—and he is getting traction—he’s mostly going to draw votes away from the Democrats.
The No Labels party is also building momentum. They basically want to find two plain-vanilla, middle-of-the-road nobodies that nobody will hate but don’t stand for anything, either. Standing for something is divisive, especially in a country on the edge of a civil war. A lot of people will go for them. The Greens will, of course, pull votes from the Democrats.
It’s a toss-up, but I guess that the Democrats will win. No matter who wins, there will be huge anger in the country.
The people who hate Trump really hate him. The so-called “Trump Derangement Syndrome” is real. Of course, you can dislike him; he has some stupid policies. But these people are actually insane.
At the same time, if Trump loses, the people who support him will be justifiably livid at the Democrats, who brazenly used lawfare, trying to both bankrupt him and put him in jail to keep him off the ballot.
I just don’t see how it can possibly have a happy ending or even a non-violent one.
International Man: In 2023, we saw the largest bank failures since the 2008 crisis.
What financial risks do you see materializing in 2024?
Casey: You can expect more financial chaos because the US government is bankrupt. It has to finance itself by printing money or borrowing money that the Federal Reserve prints to be more accurate.
The Fed raised interest rates from near 0% to 5% or 6%. Lots of loans made at very low rates will default at today’s higher rates. Banks’ balance sheets are all underwater as they struggle with defaulted loans, especially in commercial real estate. The same is true of the US government bonds that banks hold as their basic capital.
Bonds are a triple threat to their owners: default risk, interest rate risk, and currency risk.
The stock market is also very risky. More than 25% of the S&P 500 is made up of the Magnificent Seven— Tesla, Amazon, Meta, Apple, Microsoft, Alphabet, and Nvidia.
It’s similar to what happened in the late ’60s with the Nifty 50 when the stock market was concentrated in a few high P/E growth stocks. Just as 50 years ago, it’s likely that high tech equals big wreck.
We’ve had a very long business cycle created by massive currency inflation. It’s gone on for a long time, creating huge distortions in the economy. I’m betting those distortions will be unwound. And not just in the US.
Europe has the same problems: a bankrupt banking system, a slowing economy, and a culture being overturned by massive Muslim immigration, as well as Wokism.
China has built empty cities and unusable infrastructure. Their banks financed it with the savings of average people, who will be unhappy when they don’t get their yuan back. Bank lending has simultaneously financed the real estate bubble in apartments, which will wipe out many more small investors.
In addition, many multi-billion-dollar Belt and Road projects that the Chinese built during recent boom times will prove uneconomic. Most of the Third-World countries that they’ve lent to for infrastructure will default. China could be in even bigger trouble than the US, although that may be hard to believe.
It’s funny that almost everything is made in China these days, possibly including the Greater Depression, which will be worldwide.
International Man: Given your outlook for 2024, how are you preparing your portfolio?
Casey: Hopefully, you own your own house. But houses are really just expensive consumer goods. The question is, where to put your capital?
The only things that are cheap in the market right now are resources. I own oil and gas stocks. Everybody hates fossil fuels, saying that we’re going to stop using them. This is a completely ridiculous notion tied into the global warming scam. Oil and gas are still close to their lowest levels in history, with high-dividend yields and low price earnings ratios.
I’m very big on uranium. It’s the safest, cleanest, and cheapest form of mass power generation. There are lots of reasons to believe that uranium, which has already had a good year and is now in the $90 range, could easily go to $150 or $200 and perhaps far beyond. There is lots of upward pressure from both the supply and the demand side. Nuclear is the only real solution to mass power. Period.
Coal, is the most hated of all energy sources. Coal companies around the world, including the US, are selling for two, three times earnings with 20% in current dividend yields. I think they’re a gift.
And lastly, there’s gold. At some point, there’s going to be a real panic into gold, the only financial asset that’s not someone else’s liability—own gold for safety and insurance.
Gold stocks are a speculative asset. But they’re very cheap relative to both gold, and other stocks. Producers are coining money. All-in-sustaining costs are in the $1,200 area. Gold is at $2,000; I think it’s on its way to $3,000. These stocks have a 10-1 upside from here.
Even though most industrial metals are interesting because of supply constraints—everyone is afraid to build new mines in today’s ESG-crazy world—I’d stay away from copper and lithium, in particular. The electric vehicle mania is turning into a bust.
At the present stage of technology, the electrical grid itself and getting power to the electrical grid is a brewing problem. Windmills and solar panels are fine for special locations but make no sense at all for advanced industrial economies.
Just try to keep what you have in the years to come. Keeping what you have will make you relatively rich. As Richard Russell said, “In a depression, the winner is the person that loses the least.”
And, in today’s world, a simple depression is something of a best-case scenario.
Reprinted with permission from International Man.
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