Inflation and Social Decay: A Discussion with Doug Casey

The Impact of Inflation on Living Standards

Everywhere we turn, from grocery stores and malls to restaurants and airports, we encounter inferior goods and services at higher prices. Living standards have recently taken a significant step backward and the trend seems to be worsening. So, what is really happening? Doug Casey points out that people often blame the producers of products for these issues. However, this is misguided as these people create real wealth. They are struggling against the effects of government inflation, which only generates fiat currency and credit, driving prices higher. Inflation is essentially the state subtly taking capital and wealth from individuals. The real issue here is the State and its central bank, the Federal Reserve.

Inflation and Ethical Standards

How does inflation erode ethical standards, leading people to cut corners, lie, cheat, or even steal to maintain their living standards? According to Casey, the prime directive of life is to survive, and entities, whether they be governments, corporations, or individuals, will do whatever they need to survive. Inflation, being a form of theft, breeds more theft. It eventually leads to revolution and the overturning of society itself.

Inflation and Litigious Society

While the average person may not understand economics very well, they do understand that some people in modern society are getting rich without producing anything. They are benefiting from the subtle creation of fiat currency. This leads to a society based less on production and more on the theft of pre-existing wealth, resulting in a Hobbesian war of all against all, where counter-theft takes place through the legal system rather than actual physical violence.

Historical Examples of Inflation

The destruction of currency often leads to social upset. People who have worked and saved their entire lives using the national currency lose everything when that currency is destroyed. Inflation upsets the entire basis of civilized society. It was a significant reason for the collapse of Chiang Kai-shek’s regime in China after World War II and the rise of the Nazis in Germany after World War I. Countries that suffer from perennial inflation often experience constant attempts to overthrow the government. When real wealth becomes hard to produce, there’s a tendency for people to go into politics to gain wealth and power instead of producing things. This is why countries with unstable currencies become unstable socially, economically, and politically.

Protecting Yourself from Inflation

Aside from the financial effects, how can people protect themselves from the negative social, cultural, and political effects of inflation? Casey suggests the most important thing is to gain skills, lots of skills, both in breadth and depth, so that no matter how things evolve, you’ll always be in a position to produce things that people want.

Bottom Line

We are on the brink of an economic crisis that could surpass anything we've seen before. Most people will not be prepared for what's coming. That's exactly why it's crucial to educate ourselves and prepare intellectually, psychologically, and skill-wise. What are your thoughts on this matter? Share this article with your friends and let's start a conversation. And don't forget, you can sign up for the Daily Briefing, which is every day at 6 pm.