Currency expert who predicted gold boom of the 70s, Savings & Loan collapse of the 80s, the Dot Com and housing crashes, as well as President Trump's victory makes startling prediction about the fate of the U.S. dollar…
“One of the great prophets of our time.”
Robert J. Ringer,
#1 NY Times best selling financial author
Anchor: Bob Irish
What you’re looking at here is one of the most important buildings in Washington, D.C.
But it’s not the White House, the Supreme Court or the U.S. Capitol.
No. This is the headquarters of America’s Federal Reserve Bank.
How much interest you pay on a loan…
How much money you earn on your savings…
It’s all controlled by the men and women inside this building.
And I just got wind that—behind these white walls—the people in charge of “the Fed” are scrambling to keep America’s money system alive.
In fact, according to my source, Fed members just wrapped up a special “behind-closed-doors” meeting to discuss one of the most dramatic changes to the U.S. dollar in the last 100 years.
A change that not only affects how we spend, save, and earn…
But that will also transform the very nature of “money” itself.
To uncover the story, I flew down to Aspen, Colorado to meet with NY Times Best-Selling author, currency expert and multi-millionaire speculator Doug Casey.
Casey is one of the most connected men in the financial world:
He was Bill Clinton’s classmate at Georgetown… He’s debated presidential candidates… He’s met with former Fed Chairman Alan Greenspan… And he’s also been invited by the leaders of twelve different countries to discuss monetary reform. Some even credit Casey with introducing the concept of “economic citizenship,” where individuals can become citizens of a country simply by making an investment.
In the interview that follows, you’ll hear Casey’s strong warning to Americans regarding the consequences of a new potential money plan by the Fed that could start in the next 6 months.
You’ll also hear the four steps he’s personally taking today to prepare himself and protect his savings.
Doug, as you know, I'm here because you believe something shocking and disturbing is going on in Washington right now. Something that will catch the average American completely off guard and will be dangerous to their financial well-being.
That's right Bob. In short, I think that we are in line for one of the most drastic and draconian changes to the US money system in history. It could be on par with the creation of the Fed in 1913 or Roosevelt confiscating American citizen's gold in 1933.
The U.S. at this point is a ticking time bomb from a financial, from an economic, from a sociological, from a political point of view. It's a very dangerous situation…
Money System “Extremely Unstable”
Let's talk about this change in the US money system. Doug, what do you believe is going to happen?
Well, the monetary system is extremely unstable and money is the lifeblood of an economy …you poison the monetary system, it's like getting blood poisoning. It will kill you eventually. We are seeing this now.
The dollar has lost about 96-97% of its value since the creation of the Federal Reserve in 1913.
That trend is not only going to continue, but at this point, it's going to accelerate rapidly. One of the things that's helped a lot recently is the fact that it's the world's reserve currency.
There are about $10 trillion USD outside of the US. This is a big problem because the major export of the United States for the last 30 years has been dollars. The nice Japanese send us Sonys and Toyotas and the nice Germans send us Mercedes and we basically just print up dollars and send it to them. That's how $10 trillion got outside the US.
It used to be that – just after World War II, all the skyscrapers in the world, 80% of aircraft production in the world, 80% of the automobile production in the world, 75% of the steel production the world, 75% of the stock market value in the world; it was all in America. America was the end all, the be-all. It was the king of the hill. Now, none of these things are true anymore…
Unfortunately the dollar rests on nothing more than confidence because it's an “I owe you nothing”; I'm a part of a bankrupt government and the US government, make no mistake, is bankrupt. Its liabilities far, far exceed its assets.
So when the confidence blows away, the first people to dump the dollar are going to be foreigners. All those dollars, the $10 trillion abroad, are going to come back into the United States.
I mean, inflation could explode in this country. It's a very, very unstable situation from many points of view.
Leaving the Dollar…
So Doug, a number of countries are already abandoning the dollar.
I read about a trade agreement… Twenty-five countries recently struck deals to trade outside the dollar. China and Russia reached a $400 billion energy deal to trade outside the dollar…
So this is a trend that's in place right now and you expect that to –
It's a trend that's accelerating actually because at this point when the Russians trade with the Chinese, which they do, what do you use? They use U.S. dollars, but the U.S. government is an enemy of both. They can see the illogic of trading with each other and having it clear through New York. At the same time, the Iranians trade with the Indians. A lot of big traders around the world that are using the dollar because it's kind of the world's currency, but that's going to end because none of them trust the dollar anymore.
So Doug, what do you actually see happening with the dollar?
My thought is this; that understanding that the dollar is unstable as it is, at this point the Fed might try to create an alternative. And an alternative that's more under their control than the dollar and actually out of the traditional banking system. What would happen if the Federal Reserve created a look-alike dollar? Let's call it the Fedcoin. Perhaps based on the same technology that Bitcoin is based on. This is the blockchain technology where every transaction can be tracked from the creation of the Bitcoin itself.
I suspect the next stage on the part of the governments since they've tried quantitative easing; can't do that too much more after creating trillions and trillions of these paper dollars which are going to come out of the financial system and into the retail system exploding prices.
Zero interest rates and negative interest rates; huge distortions. That's going to come to an end.
What are they going to do next when the – as we enter the trailing edge of the hurricane and everybody will say, do something, do something? Well, what can they do? They've used their two major tools so far.
My guess is they're going to come up with a – with a completely digital currency called the Fedcoin which will actually act as a parallel, alternative to the dollar. It will have a lot of advantages from the government's point of view and as much of people seem to like Bitcoin, the public may accept it to start with.
So, Doug, tell me about this Fedcoin. What's it gonna look like?
Well, this is a conjecture on my part. It's not going to be physical, to start with. It's not gonna be paper in any way.
It's going to be something that you're going to have on your smartphone.
In Canada, they have something called Project Jasper, which is their own version of this. The Chinese have announced that they're planning on a blockchain type currency, the same thing… They have said that they wanna see this happen “as soon as possible.” The British have made the announcement along these lines.
This is the latest version of the $100 bill that I've got here, right, but do you remember not so long ago it used to be a little round circle? They keep changing the $100 bill. I think in the last ten years, we've probably had three or four different $100 bills. Maybe this is getting the public used to the fact that these things can change a lot, and quickly.
The day is gonna come when this isn't worth the paper it's printed on. Currencies – paper currencies, fiat currencies have a half-life. They're like radioactive elements.
As this cashless society sort of evolves from here, do you see a potential run on the banks?
I mean, people have to be afraid of not being able to have cash; I mean, for some of the reasons you mentioned.
Exactly, and especially as the $100 bill is taken out of circulation, which is the next thing that's going to happen…
Look, try this; go down to your local neighborhood bank and ask the teller to give you $5,000 in cash. First of all, she's going to fill out a suspicious activities report on you. But I doubt if she will even have $5,000 in cash in the bank. Banks aren't dealing in cash. They are dealing in checks and debits and credits on computer.
The "Fed" Admits: Not Enough Cash...
The Fed has admitted if there were – if there were to be a run on a bank, they don't have enough cash to meet that.
No, of course not because how can they print up hundreds of billions of dollars overnight so that when people go to their bank to cash their checks, they can be rewarded with $50 and $100 bills?
It's not even technically feasible to do that. So somebody takes a check from his employer, puts it in the bank, can't get cash back. What's the bank gonna do? Give him another check that he can't do anything with?
I read somewhere that if all the cash that was needed to meet the obligations, the digital obligations, that are in the bank, if you had to print that amount of cash, it would take 20 years to print enough bills to satisfy demand…
Those are the numbers that I understand because printing up 100s, forget about printing up 5s and 10s and 20s, it takes a long time. I mean, it's a complicated process.
So if there was a run on the banks and people wanted cash, it would be physically impossible to give them enough cash. It would take years. It would take decades for the government to print up enough dollar bills; 20s or 50s or whatever, to give people what they want…
Well, Doug, it sounds like the ordinary American is getting trapped.
Oh, of course he's being trapped.
I mean, historically he could no longer use gold after 1933. Silver was out of the coinage in 1966. The dollar was completely unbacked by anything since 1971. Recent years with things like the PFIC and FATCA and so forth, it's now almost impossible as a practical matter for an American to open up a bank or brokerage account outside the U.S.
Look, the thing to remember is that cash is on its way out. Not just in the United States, but all over the world.
In Sweden, it's almost a cashless economy. In France, in Italy, in Spain, it's illegal to transact for more than €1,000 or €2,000 of cash … The euro, the €500 note is being phased out… The reason for this is that if the banks are untrustworthy and interest rates are zero or negative, why leave your money in a bank? It costs you less to put it under your mattress actually.
But they don't want people to have cash.
Why? Because they say a cash economy facilitates tax evasion. It facilitates underground transactions. It facilitates drug transactions. It facilitates terrorism where $100 bills are passed around in suitcases and so forth. So they would like to kill all currency.
Now what are you going to do?
You can't leave money in the bank because you're getting zero or negative interest rates. The bank itself where you are leaving your money is unstable, illiquid; probably even insolvent. You can't have cash because the most that they're going to have in the future are 10s and 20s. So what are you going to do?
I mean, you're really trapped at this point.
So Doug, what's the advantage of the Fedcoin, if you will, from the Fed's point of view?
Oh, it's a huge advantage for them because in the 2008 crisis, they like to blame a lot of the problems on a lack of transparency, but with blockchain and the Fedcoin technology, they can see everything, everywhere.
So it's complete transparency where they can see everything, everywhere that everybody is doing…
It's a parallel system relative to the one we have right now where if anything goes wrong with the U.S. banking system, the U.S. insurance system, you've got the Fedcoin as a backup…. Fedcoin gives them an extremely powerful button to control society and control its individual members. So a lot of advantages from their point of view; no more bank runs.
How can you have a bank run when there is no money? There is no cash. I mean; it's diabolical in its simplicity.
The Dangers of Digital Money
Doug, this sounds like a real benefit…
It's very dangerous.
Without cash, you have no privacy. If you have to put everything through a bank account, the government knows exactly what you're buying, what you're selling, how much you are earning. They're in complete control; able to take what they want out of it including your entire account if you become politically undesirable…
There is no reason to trust a digital, computerized economy as the National Bank of Bangladesh found out not very long ago. They had $81 million deposited with the New York Fed. The New York Fed was hacked and the National Bank of Bangladesh lost $81 million. Have they gotten it back? No. Will they get it back? No.
This can happen to anybody in any bank. This is another advantage of having cash. Sure, it can be stolen, it can be lost, but the size of the theft's that can be conducted electronically in today's world absolutely dwarf any problems that you would have with cash.
Everything is being digitized because it gives them much more control over what you do and what you have and what you earn. It ensures that you're going to pay your taxes because everything is completely transparent to them.
This is a very serious situation and you've got to get in front of it now.
Doug, David Walker, the former control of the US currency, said that taxes in America would have to double or America would go bankrupt…
I've heard that this cash economy, this barter economy… takes $400 billion to $500 billion out of the hands of the government every year.
Oh, and I would consider that a good thing because people are using that money productively whereas if the government took its cut out of everything, that would be that much less that could be used by people who get goods and services that they want and need.
But this is another reason why the government is going to look to put blockchain in there, because it will be impossible to escape the tax dragnet with no cash to trade. It will be barter or use Fedcoin.
Actually, is that a good thing for the economy?
No, it’s a bad thing for the economy because people that are dealing in what’s called the underground economy are actually providing useful goods and services that if the government extracts its 30 or 40 percent in taxes, which they will be able to do now with Fedcoin, is going to hurt the economy, not help it. It will help the U.S. government, but that’s different from the economy in America.
Dr. Ron Paul, the former presidential candidate and 22-year Congressman is a friend of yours Doug, and he said that the cashless society is the IRS’s dream; total knowledge of and control over the finances of every single American.
Oh, I completely agree. Ron Paul is one of the few decent people that have actually circulated in Washington in recent decades. He is completely right. This is an extremely dangerous development for the average American.
So how is the Fedcoin different than the digital money we already own in bank accounts?
Well, right now those dollars are a liability of the bank… The Fedcoin is different because it’s not a liability of a commercial bank; it’s a direct liability of the Federal Reserve… number one.
Number two; it’s going to use blockchain technology which makes it totally trackable unlike dollars today. So those are two huge differences. It’s going to be sold as a safety thing because blockchain is much harder to hack than conventional digital technology. So this is another reason why they’re going to want to go in this direction; it’s for your own safety.
That’s a pretty scary thought… with the Fedcoin you are talking about no privacy at all.
Well, not only that, but as an innovation, it’s much more convenient for them to create them, to debit them, and credit them. They’re really going to be in control of everything at that point. At least now your dollars are good outside the U.S. They are deposited in banks; you can get cash for them. If they take this to the next step during the next crisis… it's really complete control…
“Sorry, You Can’t Buy This”
So the privacy; out the window with Fedcoin.
I read they have a way of controlling how digital currencies – where they can be spent or what they can be spent on. Is that an element of control that the feds could possibly put into this new currency?
Of course. The computer can do anything.
When you take your Fedcoin via your smart phone or – this is rather shocking, but the next step, instead of a smart phone is everybody has a chip. A lot of people will like it; hey, I've got a chip. I can't lose my wallet. I mean, it's all right here. Your bank account, your medical records, all these things... People are chipping their dogs and their other pets today. Wear that chip yourself and carry all your information and your digital money right with you.
It's very convenient. It's very stupid from a personal freedom point of view, but at that point, it can be used under this scanner; can't be used under this one.
It's all computerized. It's nothing. It's not a cosmic breakthrough at this point.
Well, Doug, it's not as far-fetched, I guess, as some people might believe. I think they have something going on in Japan right now for tourists… paying with fingerprints…
You're right, Bob. Actually, reality is outrunning science fiction at this point.
As of next year, tourists to Japan, when they enter the country, have to be fingerprinted and their financial data for their credit cards and so forth correlated so that this is actually happening in Japan so that when you – if you're a tourist in the country, you'll also have to use your thumbprint or fingerprint when you use your credit card. So no, the next step clearly is something along these lines.
So Doug, this blockchain technology you've said is going to give the government incredible control. Can you give me an example of what you're talking about?
It's like an anti-cash. If I've got a $100 bill in my wallet or a bunch of 10s and 20s, I can spend them on anything I want with anybody I want and nobody knows.
With blockchain, I can only send that money to somebody else who's got a receptive smart phone or chip and they know exactly who's getting the money and what it's being spent for. It can be programmed so that certain transactions can't take place or transactions with certain people or stores or whatever. So you are pretty well blocked in.
I mean, for all I know, they might decide that, under your Obama Care or whatever comes of that, after it; you're too fat. You can't buy sugar, but if you can't buy sugar, who can buy sugar? I mean, how are you going to pay the other person to buy sugar if you want sugar?
You want ammunition for your gun? Well, maybe you can't buy it. How are you going to get it? How are you going to pay for it?
This is a real personal freedom problem and it's going to be sold to the American people under the guise of convenience and safety and fighting drugs and fighting theft and fighting crime and fighting terrorism and all the usual nonsense. But it's going to be devastating to our freedom and economic progress in this country.
I can see how it might be sold, for example, if you limited, to say, a 16-year-olds Fedcoin account from buying alcohol. I mean, that could be sold as a real benefit; we can enforce the liquor laws…
Well, sure you can disguise a lot of things as benefits, but how is a 16-year-old going to get something that he or she wants if they can't buy it? Maybe they will have to barter. I don't know; maybe instead of buying something, maybe they will sell their body in order to get something. You'll have to barter to get around using Fedcoin. So there's all kinds of unintended consequences.
Well, I know with the food stamp program already, there are certain prohibited transactions. You're not allowed to buy liquor with food stamps. You're not allowed to say, spend your money – your electronic debit cards in strip clubs. I know that's a law in some states as well. So this just seems like a further extension of government control on individual behavior.
Absolutely. They will be able to prohibit anything without even passing a law quite frankly. If your Fedcoin smart phone or chip isn't programmed to let you buy that, how are you going to get it? You don't have cash anymore.
Bye, Bye 2nd Amendment...
Yeah, so who needs a gun registry, right?
Well, exactly. So no point in dealing with all these pesky Second Amendment laws at that point…
This is sounding very Orwellian and I just wonder how – when the Fed launches this thing, how are they going to sell this to the public? What's the pitch on this? I mean, what –
They will sell it as convenience.
It's easy. They will sell it as security; you can't lose your wallet. Safety. They will sell it as patriotism; helping the government get the economy back under control. And the average person basically does what he's told.
I mean… even using the language of the government to – instead of inflation its quantitative easing. No problem. I mean, people – the average guy, I'm sad to say, has so little grip of basic economic theory. I'm afraid that that's true all the way up to the people in the very top echelon of the Federal Reserve; but they can really get away with anything at this point.
Social Security 2.0?
You know, back in 1968, a guy named McGovern ran for president of the U.S. and he came up with a cockeyed idea.
His idea was, we ought to deposit $1,000 in everybody's bank account to stimulate the economy. Well, it was a laughingstock thing back then. But now, a lot of well-known, legitimate economists, are saying we ought to have a guaranteed income for everybody in the country.
And something like a new currency, a Fedcoin, issued directly by the Fed where you don't have to trust the bank which may be bankrupt…Something that could supplement Social Security…
Well, not everybody has a bank account with a commercial bank today.
But everybody's got a Social Security number and they could all have an account directly with the Federal Reserve which people think, hey, that can’t go bankrupt. They actually make our money.
It would be quite easy to reach out to everybody on their smart phone and give them a Fedcoin account with the Federal Reserve and distribute the helicopter money in a fair way.
So Doug, it sounds kind of like Social Security 2.0.
Well, that's very much the case.
It's following up a massive disaster; Social Security is a Ponzi scheme, and why not follow it up with an even bigger one. Social Security itself is bankrupt. I don't know where they're going to get the dollars to pay that off.
So perhaps they can do an arabesque around the problem by issuing a Fedcoin account to everybody to substitute and keep down the number of dollars by having an alternative, parallel currency…
Where these obligations can be made good directly with accounts with the Federal Reserve—the issuer of the currency—ruling out bankrupt insurance companies, bankrupt commercial banks, for that matter, a bankrupt Social Security system…. What are they going to do?
At this point they've shot all the arrows in their quiver.
They've printed up huge amounts of money. They have reduced interest rates to zero. In fact, at this point there are about $13 trillion of government bonds around the world that have negative interest rates where, forget about the inflation losing value, eating the value of your money, you have less money at the end of – it's absolutely insane. It's bizarro world where things are turned upside down.
It's like the last – the last arrow in their quiver that I can see at this point.
Doug, this is an interesting theory, but is there any evidence that the Fed is actually looking into this at this point?
There actually is. There have been a number of statements by everybody from Janet Yellen on down that this blockchain technology which is the back of Bitcoin; they consider it viable. They want to use it and this is unusual in a way on the part of the government.
Usually when a technology, a new technology of any type, comes out, whether it's the horse or gunpowder or the printing press, the government doesn't like these things; these innovations because they take power away from whoever controls it. The establishment –
The status quo, right.
Exactly. Changes the status quo and gives power to the common man. All these things have liberated the common man. The computer revolution, the Internet, is a perfect example of this. But in this case, the situation is so serious I think the government wants to co-opt this technology; to get in front of this technology.
Since it's already been legitimized, the idea of Bitcoin and blockchain technology, I think the next step is that you're going to find the Federal Reserve itself offering Fedcoin, which is very convenient for them because with that, they can designate exactly how those Fedcoins can be spent.
They know exactly who gets them, what they're used for, and so forth. If there is ever a serious problem with the dollar, for instance with the trillions of dollars outside the US flooding back into the US, it can act as an alternative currency which, at least for a while, will have some semblance of confidence.
Yellen’s Secret Meeting
Doug, we will talk about how you can protect yourself in a moment, but first, I want to get a sense from you for when this is going to be happening. Surely we're talking multiple years, maybe even decades before this comes about.
I think not Bob.
I think that since we are going into the trailing edge of this gigantic financial hurricane now… So we're not talking about decades or years. We're talking months or for that matter—depending on when somebody views this—it could be a matter of weeks. I mean, there is a certain amount of urgency. Not just importance, but urgency in doing this.
You don't see this widely reported in the media, but it's happening all around us at this point. Look, in June 2016, Janet Yellen and dozens of other central bankers met with the top experts in the blockchain area, including the people that are in back of Bitcoin. It's happening now.
The technology is there. But my question to you is; wouldn't it take a long time for an infrastructure to be put in place to allow the Fedcoin to be distributed?
Actually, the infrastructure is there right now.
It's there right now?
In other words, if the U.S. government needed currency to redeem people's demands for their money at a bank, they couldn't possibly print up enough currency quickly enough. That's out of the question. However, today almost everybody, except the very bottom of society, everybody has a smart phone and the blockchain technology has been active and used now for a decade.
Now Doug, just so I understand what's going on here... So the Fed has run out of policy tools. They've printed trillions of dollars. Interest rates are basically at zero and soon they may have to go negative in an effort to stimulate the economy, but they won't be able to do so without banning cash. Then they're going to come up with a new currency; a Fedcoin that traps people savings. Essentially, this could be the ultimate confiscation and control tool. Do I have that right?
Bob, you are absolutely right.
The most important thing to remember is that the paper dollar, the $100, the $50 bill, currency itself is on its way out. It's going to be replaced strictly with digital money as is happening in other places in the world right now. This has got very serious consequences for you on all levels. So plan your life around that.
Doug, I've tracked your career closely since you wrote your best-selling book Crisis Investing back in 1979. I know you're not one of those gurus to make huge predictions just to get in the spotlight. When you make a prediction, more often than not, history has proven you right.
For example, in your book, you warned corporations would go “belly up on a massive scale, but that the government would bail out those which are most inefficient.” Sure enough, the S&L crisis ensued with over 1,000 bankruptcies followed by the Bush bailout.
Well, a good economist, among other things, anticipates not only the immediate and direct consequences of government actions, but the indirect and delayed consequences as well. Unfortunately, most of the economic pundits you read about are actually just political apologists.
Doug, you've issued at least one major prediction in each of the last four decades. Let's take a quick look:
In 1989, nine months before the fall of the Berlin wall, you wrote, "The Soviets are likely to see their country break up into its many constituent parts over the next few decades."
November, 1999, four months before the NASDAQ lost over 60%, you said, "Almost every one of the Internet stocks is a burning match." You said we would see, quote "…a 95% plus meltdown among the survivors with many disappearing totally."
In 2005, two years before the housing crash, you issued this public statement; you said, "What's going on now in the residential real estate market is much like the tech bubble, but potentially much more serious than what went on in stocks a few years ago. The bubble is floating on a sea of debt. When it bursts, millions of houses will hit the market in distressed sales." This was another warning that could've helped millions of Americans steer clear of disaster.
Now Doug, I'm not going to list all the predictions you've ever made, but these showcase why financial author Robert Ringer has called you one of the “great prophets of our time” and why Simon & Schuster has stated you've “never been wrong on one of your major predictions.” Phil Donahue even once devoted a full hour long show to your work.
Well, Bob, I don't have a crystal ball; I'm not a fortune-teller, but I believe that in the real world, cause has effect and actions have consequences. So the key is to position yourself. Sometimes it takes a few years for the inevitable to become imminent.