by Doug Casey, International Man:
International Man: What important trends do you see unfolding in 2023?
Doug Casey: Perhaps the biggest turning point in recent modern history will turn out to be 2020. Governments and their minions found novel ways to gain huge amounts of control. These things were well underway before 2020, but since Covid, they’ve all gone hyperbolic. That trend will accelerate this year—albeit with some much-delayed pushback.
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Four areas stand out.
First, a relatively inconsequential flu, followed by a vaccine hysteria, got far more voluntary compliance to all manner of extreme measures than most anyone could have imagined. The powers that be found that the public is vastly more likely to do as they’re told if the rationale is health rather than politics, ideology, economics, or the like. So we can count on many replays of this tune, including mandatory vaccine passports and lockdowns.
Second, the drumbeat against the newly-minted enemy element, carbon, has reached manic levels. A substantial part of the population, and a large majority of youth, have been convinced that Global Warming will destroy the planet unless we go Green, stop using fossil fuels, and attempt to run an industrial civilization on windmills and sunshine. It stands a chance of destroying civilization.
Third, central banks are racing to impose CBDCs, while governments run multi-trillion dollar deficits and bailouts, doubling and tripling debt levels with little discussion. This is unprecedented.
Fourth, the widespread acceptance of Wokism, racial quotas, aggressive LBGT++ promotion, ESG, and DIE. There are serious discussions of race reparation payments and a Guaranteed Annual Income. It’s part of an accelerated general collapse of traditional moral values.
What’s happening will, I think, be seen as a turning point greater than either WW1 or WW2. And there’s an excellent chance we’re looking at something akin to WW3 in the bargain. I don’t doubt that the era before 2020 will soon be referred to as the “Before Times,” a phrase that’s been used in dystopian science fiction. And the future could resemble dystopian sci-fi.
The future is what this discussion is about. But I’m not a fortuneteller and don’t have a crystal ball. All I can do is look at the facts. Ideally, facts that not everybody is paying attention to—interpreted through a lens that not everybody else is using.
Let’s briefly run down trends in the major markets. As with the four societal trends I just mentioned, this isn’t the place to go into the rationales, the “why” of things. I’ve spent time on that in past conversations. I just want to call 2023 the way I see it.
Gold
In 2023, the big economic/financial story will likely be gold. It’s been flat for the past decade and is reasonably priced relative to other tangible assets. It’s going higher because there will be serious talk of remonetizing it; BRICS don’t want to use the dollar—and for good reason. The public, who’ve forgotten gold even exists, will start buying it, driven by fear—fear of currency debasement, and fear of counterparty risk in the financial markets. So physical gold is going to do really well in 2023. And gold miners will do even better.
Stocks
The great bull market that started in the early 80s came to an end in 2022. The bull market was driven by a number of things, but not least has been the immense amount of currency units created by central banks. It’s caused a very, very long business cycle—a super cycle. As it rolls over, we’re going to see lots of trouble in the corporate sector as distortions, and misallocations of capital caused by inflation are liquidated. Indebted companies that catered to “Before Times” patterns will go bust. By the time this bear market bottoms, the average guy will have forgotten the stock market even exists. And will want to attack the person who reminds him it does.
Bonds/Interest Rates
The entire world, from governments to corporations to individuals, are head over heels in debt. Encouraged partly by the fact that rates have been dropping for 40 years—a lifetime.
Interest rates, however, have a life of their own. They’re not entirely controlled by central banks, contrary to what most people have come to believe. The world will start to see bonds as a triple threat to capital—higher rates, currency risk, and default risk.
The interesting thing here is that bonds are not generally owned by the retail public but by institutions—ETFs, mutual funds, pension funds, hedge funds, and the like. Institutions have a hard time justifying owning bonds with ratings of less than BBB. The bonds of struggling companies will be downgraded this year, and they’ll have to be offloaded. But to whom? Because other institutions can’t buy them either. At some point, bonds will be a huge bargain, and I hope to urge buying them. But it won’t be in 2023.
Let me reemphasize what I’ve said many times over the last several years: If you own any bonds, sell them yesterday morning. At the latest, sell them tomorrow morning. They’re going a lot lower.
Real Estate
Real estate floats on a sea of debt in the US and the rest of the Anglo-Saxon world. If he can’t borrow money, the average guy can’t buy property. And he can’t sell it either, because the buyer needs financing. Housing is in big trouble, as are bricks and mortar retail and all manner of office properties.
With interest rates going up, while economic activity goes down, property is headed down. Real estate is very overpriced all over the world. Real estate is something that you need to live in, to build on—but it’s become a speculative vehicle financed by debt. Not good.
Currencies
In today’s world, currencies are all fiat. Just pieces of paper or digits created arbitrarily by governments and their central banks. They’re all in trouble, with no exceptions. The US dollar’s liquidity has kept it strong, and a debt crisis could even give it strength as the world scrambles for dollars to pay dollar debt. But these aren’t strong fundamentals. If you need a currency, buy the Swiss Franc. And gold. And Bitcoin.
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