by Doug Casey, International Man:
Editor’s Note: 2020 was an unprecedented year. A global pandemic and the subsequent hysteria unleashed a tidal wave of government restrictions, limits on individual freedoms, and economic destruction.
In 2021, the US will have a new president, the impacts of government response to COVID will become apparent, and the money printing will accelerate. Below, International Man founder Doug Casey shares his predictions for the year ahead, including where bitcoin and gold are headed, the government’s plan for a digital dollar (FedCoin), potential geopolitical risks, and more.
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The Political Situation and a Biden Presidency
I’m going to keep this article short, just hitting a few of the high points—or low points—of the coming year. Which will, I’m afraid, set the tone for the whole decade.
As Yogi Berra said, “It ain’t over ’til it’s over.” But it looks as if a Biden/Harris regime will replace the Trump regime.
I’ve explained my very mixed feelings about Trump many times before. Whatever his faults, the people in control of the Democrat party are much more dangerous. To start with, they egregiously stole the US election.
The political situation guarantees chaos because the red people and the blue people actually hate each other, which is why I’ve talked about the possibility of a civil war over the last couple of years. It’s either that or a breakup of the US. Or a police state to keep a lid on the political pressure cooker.
As far as the economy is concerned, at this point, it hardly matters who assumes the presidency; the Greater Depression is absolutely baked in the cake. The creation of trillions of new currency units will only make it worse. Except possibly for the stock market over the short run, as people look for someplace to offload their dollars. You can expect violence. Germany in the ’20s, or Latin America cyclically, would seem to be good models.
The incoming Democrats will create a vast array of new programs and departments. The changes will be much more radical than either Roosevelt’s New Deal or Johnson’s Great Society. They’ll finance it with unlimited money in a world of Modern Monetary Theory (MMT). They’ll cement themselves in power. The US will get a makeover, and America will cease to exist.
It’s really serious. The consequences of the Greater Depression will go far beyond a simple decline in the general standard of living.
The Effects of COVID
The virus itself is what we can call a first-order effect. I don’t want to spend much time talking about the flu itself because the information has been highly politicized and unreliable in many ways. It’s enough to note that even the worst-case numbers aren’t remotely comparable to those of the Spanish Flu of 1918-19—which was trivial from political, economic, social, or cultural viewpoints.
The second-order effects of Covid—like the economy being shut down from hysteria—are much more serious.
It’s the third-order effects, however—new laws and state action— that will have the longest-lasting consequences.
Governments all around the world have put in onerous new laws and regulations about travel, movement, and business in general. They’ve found a marvelously effective new means of exercising vast new power over their complacent subjects. These things will be paid for not only by higher taxes but by immense amounts of money printing by central banks. Meanwhile, economies everywhere will be in full collapse.
Because so many people have no savings and are living from paycheck to paycheck, it’s probably the perfect excuse to set up a guaranteed annual income. People have already been prepped for the ridiculous concept.
Bitcoin and Gold
Gold and Bitcoin are actually very similar assets in a number of ways. Both comply with all the characteristics of a sound money—unlike any of the world’s fiat currencies. In addition, they can’t be “inflated”– the amount that they can increase every year is trivial relative to the amount in existence.
In the case of gold, new mine supplies increase the approximately six million ounces above ground by about 1.3% per year.
In the case of Bitcoin, there can never be more than 21 million in existence. In reality, there may never be more than something like 15 million available because we don’t know how many were lost in the early days when they had little value.
Even institutions are starting to buy bitcoin. As the effects of the many trillions of fiat currency units being created by governments all over the world become apparent, people will look for places to hide. The main beneficiaries will be gold, silver, some other commodities, and Bitcoin. Even though Bitcoin’s looking bubbly right now, with a market cap over $700 billion, it’s still quite small relative to other asset classes.
I’ve been bullish on Bitcoin since July of 2017. It’s going higher. $100,000 isn’t out of the question this year.
A Digital Dollar (FedCoin)
The US government will likely want to roll out FedCoin as soon as possible. That might be as early as this year; the Chinese are certainly moving to a digital currency. For what it’s worth, I might have even coined the word FedCoin in a piece that I did about five years ago.
I’m going to avoid FedCoin as much as possible. It has no advantages, only disadvantages for citizens. Digital currencies put your income, your assets, and your privacy under the direct control of the State.
Social and Cultural Trends
A black congressman from Missouri—not the same one who asked an admiral whether too many people on one side of Guam could tip over the island—ended his recent speech to the House with prayer ending with “Amen and a-women.” I think he was serious in that gender-specific pronouns have been purged from the Congressional vocabulary. That’s indicative of the cultural trend.
The people promoting a US cultural revolution aren’t getting much resistance. The old regime—the conservatives, the Republicans—are totally bamboozled and intimidated. They’ve been brainwashed into accepting the righteousness of the Left’s cultural, political, and social agendas. They may not like the New Normal, but they sheepishly accept it. The schools, academia, NGOs, corporations, Hollywood, and the media have inculcated their notions into society.
But perhaps the 75 million cultural conservatives will rebel—although it won’t be easy since they’ve effectively been banned from most mass and social media platforms. The only certainty is that the US is facing a real problem. When these things get out of control, the consequences can be genuinely terrible. Trends in motion tend to stay in motion—and this one is even accelerating.