In his keynote address to the Mines and Money Hong Kong conference, Doug Casey shared his predictions for the future of the world economy and the mining industry. Casey is a well-respected economist and seasoned, expert analyst of the precious metals industry. His economic viewpoint aligns with Peter Schiff’s, and he believes that the astronomical levels of global government debt and paper currency are going to lead to a “Greater Depression.” What will be the ultimate fallout of this depression? The world will return to precious metals as the most reliable money.

There’s a good reason why gold is money. It’s the only financial asset that’s not simultaneously somebody else’s liability. This is a critical thing in a world as unstable as we live in today. You don’t want to hold somebody else’s liability, certainly not the liability of a bankrupt government or an idiotic and bankrupt central bank. So what are you going to hold? People are going to go back to gold.”

Video Length: 00:27:39

Highlights from Casey’s talk:

“As far as the economy, the financial world, the monetary world is concerned – let me say that we are now at the cusp of a restart of what I call the Greater Depression. Why do I call it that? Because it is going to be much more serious and very different from what happened in the 1930’s, but it’s actually going to be the biggest thing since the Industrial Revolution, I think…

“Let me give you three, good, working definitions of a depression. Number one, it’s a period of time during which most people’s standard of living drops significantly. That’s actually been going on in the United States since the early 1970’s, but that process is accelerating. The second definition… is it’s a period when distortions and misallocations of capital in the economic system are liquidated. That means bankruptcies and unemployment… That’s a good thing… But it’s painful. The third definition is it’s a period when the business cycle climaxes. The business cycle is caused about 95% by government action in the economy, primarily inflation…

“[Zero-percent interest rate policy and quantitative easing] are not only the wrong things for central banks and governments to have done, but they are exactly the opposite of the right thing. They are incredibly stupid from the long-term point of view. An economist is somebody who doesn’t just see the immediate and direct effect of actions; he sees the indirect and delayed effect of actions. These people that are doing this who you see on television, they are not economists, they’re political apologists…

“[Both governments and central banks] are totally and completely bankrupt with very few exceptions… The assets of all these governments are far exceeded by their liabilities, and their liabilities are growing at this point…

“I think what’s going to happen is that the world, not soon, but in the next generation, is going to go back to using gold as money. There’s a good reason why gold is money. It’s the only financial asset that’s not simultaneously somebody else’s liability. This is a critical thing in a world as unstable as we live in today. You don’t want to hold somebody else’s liability, certainly not the liability of a bankrupt government or an idiotic and bankrupt central bank. So what are you going to hold? People are going to go back to gold.

“This is why the Chinese government… is apparently accumulating a lot of gold. It’s why the Russian government is accumulating a lot of gold. I wouldn’t be surprised if we see a gold-backed ruble, a gold-backed yuan in the future as things get really bad…

“Mining is not going to get better. In fact, it’s going to get worse… All of the easy deposits have been found. We’ve had people running across the globe at execrated rates… and we’ve found most of the easy, surface, high-grade, easy-to-process deposits…

“[I believe] we’re in a cyclical bottom in commodities. It’s been a nasty three-year bear market. Oil is down over 50%. Iron is down 75%. You all know the story. I think we happen to be at a cyclical bottom, so the next step is going to be up…”