International Man: Will 2023 be the year of central bank digital currencies (CBDCs)? Or will this terrible idea be consigned to the dustbin of history?
Doug Casey: CBDCs are a disastrous idea. But that’s never stopped “the elite” in the past. First, they did zero interest rates and negative interest rates, which I thought was metaphysically impossible. But they did it. Then they went to massive “quantitative easing,” a dishonest euphemism for money printing.
The next thing is going to be Central Bank Digital Currencies (CBDCs), which will give them unprecedented control over the finances of the average person.
On the one hand, it should be cause for a revolution because it will actually turn people into serfs. But on the other hand, the average American has almost no understanding of economics. He has little grip on what’s going on and believes propaganda.
We’re going to get CBDCs in 2023, and this is one of the scariest things on the horizon.
International Man: Will 2023 be the year uranium really takes off?
Doug Casey: Let’s recall the last uranium boom, which we were fortunate enough to catch back in 2001 to 2007. Uranium ran from $10 a pound up to $140 a pound. And that was in the days when the Russians and the Americans still had large nuclear weapon stockpiles, from which they recaptured lots of U-235 for use in reactors. That’s gone.
The West has become anti-oil, natural gas, and coal. It’s idiotically relying on wind and solar, which are totally unsuitable for mass power generation for an industrial civilization. However, I think that notwithstanding the semi-religious antinuclear dogma of many in the West, there’s going to be a nuclear renaissance, out of pure necessity. Hopefully, using fourth and fifth-generation nuclear technologies.
At the moment, uranium is about $50. I don’t doubt that it’s going to go to $100 or $150 and will take uranium stocks up with it, as it did the last time. So I’m very bullish on uranium.
International Man: What other macroeconomic and geopolitical trends do you see unfolding?
Doug Casey: These are a number of geopolitical trends unfolding.
First, let’s discuss China, the world’s biggest country.
There’s turmoil in China now, with large Chinese cities having been locked down due to the Covid hysteria. Perhaps it’s mainly a cover for Mr. Xi to crush revolutionary elements. Who knows? But that’s just one thing that China’s facing.
Most of their banks are bankrupt. All the money that Mr. and Mrs. Wu deposited over the years is very much at risk. That’s because banks have lent that money for schemes like the Belt and Road initiative, for building giant cities in the middle of nowhere, for building questionable highways and rail lines, and all sorts of showy infrastructure. Like most government projects, it will turn out to be a waste of capital.
The money that the banks used to finance those things is never coming home. So when Mrs. Wu goes to withdraw her money, she’s not going to get it unless the government prints a giant amount of yuan. She’ll be very angry. At that point, we may find that China is not a cohesive whole. It’s really, six, seven, or eight separate countries and that are kept together in good measure by force.
My guess is when the going gets tough, China could break up, as it’s done numerous times in the past. Will it coalesce again? Who knows? And what will Mr. Xi do about it? At this point, he’s got a tiger by the tail.
What do you do if you’re an authoritarian dictator with unsound communistic instincts? He’s going to tend to use force and coercion to hold things together. He’s not going to liberalize more—the reason why China had its tremendous boom during the first 20 to 30 years after Deng took over in 1980.
President Xi, like other dictators or authoritarian types, is going to clamp down more, not liberalize.
It’s something the people who belong to the World Economic Forum will approve of. It was very successful from their point of view on the Covid front…
On that topic, I expect we’ll see a vaccine passport instituted this year, something like a supranational passport. You’ll still need your national passport, but you’ll also need your vaccine passport to go anywhere. It will be most inconvenient and controversial, but will further reduce the frequency and increase the cost of international travel. Greta Thunberg will approve.
Global warming, or climate change, as they like to call it now, will be another big theme for this decade. It’s one of the greatest scams and delusions in world history.
Barring a deflationary credit collapse, prices are going higher if only because we have actual Jacobins in control of the governments of the Western world. They’ll probably, stupidly, “fight inflation” with price controls. They’re already talking about dictating the maximum price Russian oil can be sold at. These very destructive people actually think price controls work. South American-style economics are going global.
On the macroeconomic and global geopolitical fronts, we’ll see the rise of new trade blocks. China, Russia, India, Turkey, Iran, and other countries will start working together. They’re going to institute their own international settlement scheme equivalent to SWIFT. This will be very bad for the US and its major export, the dollar.
Meanwhile, the old alliance between the EU and the US is going to disintegrate. A lot of Europeans can see that the US was in back of the Nordstream pipeline’s demolition. They see that the US would like to basically de-industrialize Europe so that the US can assert hegemony over it.
Lastly, let’s look at so-called tax havens. There’s always been pressure on tax havens, and it’s increased since the so-called Panama papers were disclosed. There’s going to be more and more pressure on small countries whose most valuable asset is actually their national sovereignty, which they use to help foreigners reduce their taxes and move money.
We’re going to find that passports that you buy for US dollars will become less and less acceptable. For instance, the EU has just said that Vanuatu passports will need a visa to go to Europe. Quick, low-cost passports for those who want to renounce their US citizenship are becoming more inconvenient. About 4,000 people will renounce their US citizenship this year. And that number is going up.
Another thing. Transfers of money to and from tax havens—which is already quite onerous—will get harder. Getting your money from one of those places where it’s just stored to someplace where you can use it is getting very hard and inconvenient.
International Man: What is your top speculation for 2023?
Doug Casey: This is going to be the year of gold. Not to say it won’t also be a great year for other resources like uranium and oil, but I think this is going to be the year for gold. And therefore, for gold stocks.
Interestingly, most people are completely unaware of this. There are still a number of quality smaller mining companies that are selling for less than their net assets, almost less than the cash that they have in the bank. That’s how cheap some of them are today. The public has no interest in them. The institutions have no interest in them. But when gold starts running, which it will, that’s going to change radically.
They’ve been favorites of mine as an area to speculate in for most of my investing life. I’ve always played with them because they’re the most volatile class of securities on the planet, and I like volatility. Volatility can be your best friend. But now, from their current ultra-depressed levels, gold stocks, especially juniors, are the place to be.
To give you some idea of why I say that, the average all-in-sustaining cost of mines currently in production is someplace between $1,000 and $1,100. With gold around $1,800, it can once again be said that having a gold mine is actually “like having a gold mine.”
Reprinted with permission from International Man.
