Welcome to The Greater Depression

The comments below are an edited and abridged synopsis of an article by Doug Casey

Recently, Casey was asked: How serious is this economic downturn likely to be; how long will it last; how can it be ended; and whose fault is it?

Welcome to The Greater Depression | BullionBuzz
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He said that the actions taken by the US (and almost every other government in the world) are not only going to be ineffective, but also counterproductive.

For years, Casey has predicted an inevitable Greater Depression. The only thing in doubt was its timing. What Casey believes is going on right now is a downturn that is going to be longer, deeper and somewhat different than the unpleasantness of 1929-1946.

We will be bombarded by a barrage of misinformation, misinterpretations, wishful thinking and snake-oil economics over the next few years. It is critical that we rationally decide exactly what is happening and why.

Casey’s take is that the Greater Depression will be due to government intervention in the economy. The current hysteria over COVID-19 is simply the pin that bursts the bubble. In any event, state intervention takes three forms—taxation, regulation, and currency inflation—all of which are disastrous.

Of these, inflation is likely the worst, since it’s not only an indirect form of taxation, but it causes disruption of the business cycle, resulting in distortions of how people produce and consume, and causes huge misallocations of capital.

The best general definition of a depression is: A period of time when most peoples’ standard of living drops significantly. What we’re looking at now is the Greater Depression.

Up for discussion: Why the depression is happening; stage one—inflation and boom; stage two—a slowdown; stage three—full recession; stage 4—recovery; subsequent cycles; and beyond Santa Monica.

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