Today’s show guest is none other than Doug Casey. Doug is a New York Times bestselling author, world-renowned speculator, and he’s the founder and chairman of Casey Research. Casey Research is a financial newsletter publisher which advises its readers on investments ranging from stocks, precious metals, and other alternative investments. Doug’s views have traditionally always been quite polarizing, which has sparked a lot of healthy debate and controversy, especially when it comes to his views on capitalism and the US government. Suffice it to say, it was a very interesting discussion we had today.

Now, this episode veers more on the side of investing, so for the listeners out there that are interested in personal investing and how to make money, this is definitely one for you. We touch on some interesting topics around the difference between investing and speculating, what key elements it takes to be successful as a speculator, what the next country is that Doug thinks is ripe to make a lot of money off of speculation, and finally, which asset class we should all be looking at right now amid this “everything bubble.” I hope you guys will enjoy this one as much as I enjoyed recording it. Let’s get right on to the show.

Jay: Doug, nice to speak with you again. Thank you so much for coming on the show. Please tell our audience where you are right now.

Doug: Well, we’re lucky that we got to speak this morning, Jay. I live half the year in Argentina and part of the year in Uruguay, the backward little socialist country across the Plate River from Argentina. But I like it here, believe it or not, because although it’s a backward little socialist country, the government generally leaves you alone. And I have a very nice estancia here. I’m kind of in the middle of nowhere, close to the ocean, but in the middle of nowhere on a thousand acres. And occasionally stuff, like the electricity, goes out. So I’m glad we caught up with each other.

Jay: Absolutely. I believe the last time we spoke you were actually… I feel like you were in Colorado or somewhere stateside, but I don’t know where. You’re a world traveler, so it’s hard to keep with your travels. But we appreciate it. We appreciate the time, and we’re excited to have you on. Maybe you could just give us a quick introduction of who is Doug Casey. A lot of my listeners will probably have heard of you, but for the minority that haven’t, maybe you could give us a quick background and how you became an investor. I know you’re also a bestselling author as well. So you could give us a little bit of color there.

Doug: I guess I’m best known as the author of several books. Two were on the New York Times list. One was number one for a dozen weeks. That was Crisis Investing. Over the years, I’ve traveled to 155 countries, most of them many times, lived in 10 different countries, and I watch all the markets around the world.

Most recently, I’ve started writing novels. The first two, one is Speculator, which talks about theories of speculation in the context of our hero, Charles Knight, getting involved in a bush war in Africa and a gold mining fraud. And the second is called Drug Lord where Charles, after he made a couple of hundred million dollars and had it stolen from him in Africa, gets into the drug business as a drug lord. It’s actually quite technically competent talking about the way the drug business works — both legal and illegal, incidentally. So that’s kind of who I am, I guess.

Jay: Those books, are they out now?

Doug: Yeah, they are. You can get them on Amazon, or you can go to High Ground books. Highgroundbooks.com. They’re quite good. They’ve won awards and so forth. There are so many books published every war. Most books of whatever genre, most people just don’t hear about them. But these are excellent novels.

Jay: Fantastic. I can’t wait to link them up in the show notes, and hopefully the readers will be able to purchase some of your books and read all about them.

Now, I know that you, like you said, have traveled extensively, over 150 countries in the world. Tell us a little bit about how you started off as an investor. What got you into this whole world of investing?

Doug: Actually, the first thing I wanted to be when I was a kid, like many kids, was a paleontologist. Maybe not many… Maybe most kids want to be baseball players or a fireman. I’m not sure. But I was very interested in dinosaurs. That’s a division of geology. And then later, I read a brilliant book, which I recommend to everybody, called Economics in One Lesson by Henry Hazlitt — only 150 pages but a gem, a work of genius. I put geology together with economics and came up with gold as actually being money, which most people don’t realize. I continued researching it.

My first book was a book called The International Man, a guidebook to making the most of your personal freedom and financial opportunity around the world. But my second book was Crisis Investing, and it was a huge bestseller because my timing was right, as well as the theory being sound. And this was back…gee, a long time ago now in 1979. Most people have forgotten that interest rates on government paper was 15%, 16, 17%. So it looked like the world was coming to an end. And this book talked about what to do and how to profit from it.

Then from there, I set up a newsletter publishing business, and I still do that today under the banner CaseyResearch.com. That’s kind of the story in a nutshell.

Jay: And there you even have — I don’t know if it’s a sub-newsletter or one of your divisions called International Man. Is that right?

Doug: Yes, that’s a free blog, a daily blog. It’s actually quite excellent, done by Nick Giambruno, who is kind of a protégé of mine. I do things for it too occasionally.

Jay: So I’m curious, Doug. Over the years, you’ve obviously seen the ups and downs and have traveled the world, what would you say your investment style is, if you could classify it as one style? You’re obviously a global investor. Would you call yourself somewhat of a contrarian investor?

Doug: I’m definitely a contrarian and so far as… I don’t even consider myself an investor. I consider myself a speculator. Now why is that? Speculators have a bad name, a bad reputation. It’s because the world is changing so quickly and is also so unstable today because of huge government interventions in all areas of the economy — debasing the currency, regulating, changing taxes — usually up. It makes it very hard to be an investor. An investor is some who takes a dollar someplace and invests it in a business, hoping to grow it to two dollars — very intelligent methodology and certainly one that Warren Buffet has used most successfully. A speculator is different. A speculator is somebody who looks at distortions, generally politically-caused distortions in the marketplace, and attempts to capitalize on them.

As a speculator, we’re looking for volatile things, things that are extraordinarily depressed or extraordinarily over-priced and acting accordingly. So a speculator is quite different from an investor. Most people confuse a speculator with a gambler, which is totally incorrect. A gambler is just somebody that’s playing a zero-sum game where chance is 100% the determinant. So, another distinction worth making.

Jay: So when you are hunting for these speculative-type situations, what is your MO, so to speak? You obviously have your ear on the ground in a number of different areas. I know you spent a number of years or a lot of time in Africa where you, perhaps, had some quite profitable speculative bets, if you will. What is your process in how you seek out and find these sort of speculative opportunities?

Doug: Well, the original Baron de Rothschild is famous for having said “Buy when blood is running in the streets.” He said that during the Napoleonic Wars. That’s still good today. So wherever there is chaos and fear, prices are likely to be low. There are likely to be a lot of people that — for good reasons or bad reasons — have to sell whatever they have to get out of Dodge. So this is why, ideally, a speculator is very internationally oriented, because… First of all, history, actually… The US has been one of the most stable and prosperous countries in the world. Therefore, the US offers fewer speculative opportunities, generally, than other crazy places.

Talking about Africa, the big one that got away for me but would have changed my entire life course, was during the war in Rhodesia, which no longer exists and is now called Zimbabwe, of course. We’ve been to Rhodesia and Zimbabwe many times over the years, and there was a fantastic piece of real estate. It was a castle built by Italian prisoners of war during and after World War II — beautiful, incredible castle with a 9-hole golf course and 50 hectares of coffee and all kinds of stuff, right on the Mozambique border. Beautiful. I could have gotten that whole thing. It was run as a bed and breakfast, incidentally. I could have gotten that and the silverware and the linen and everything for $85,000. And I had the money, so why didn’t I do it? Because I realized — this was at the height of the war — that unless I stayed there, in 24 hours, everything would be stripped naked, and it would be gone. That’s just the way things were back then.

So should I have bought it or shouldn’t I? Well, I would have had to stay there. My whole life would have been different. But that was in 1979, and when I went back to Zim the next time or the time after — I forget — but it was 1985, and it had just changed hands for $13 million. So simply holding onto it for six years would have been a gigantic score. And $13 million then was worth a lot more than $13 million today, I promise you.

Jay: I think the Africa… So the Africa… There’s a hurdle that’s involved if you want to look at Africa even. And I think that a lot of outsiders are wary of that hurdle because they’ve heard bad things, and they haven’t ever been there, and they don’t know what’s a scam and what’s real, but I guess, as a speculator, if you go over there and spend some time there, and you start to get to know the landscape and make some connections there, then that makes the opportunities seem a little bit more reasonable and you have a little bit more comfort there, which I guess is the reason why speculating, if you do it right, can be adventurous. And you can get an edge by just kind of outworking people and doing the trips and actually doing the on-the-ground, field research.

Doug: Yeah. Because I don’t believe in a level playing field. I like to be on an unlevel playing field where I have the high ground. So you go to a place like Africa. Almost certainly, you’re going to have much more experience, more money, better connections. You can have everything over the local population, so you can bring something to the party. And, as a foreigner in these countries where few people go, I’ve found I can be sitting down with the president of the country in a week or two weeks from a standing start. Impossible in an advanced, Western country.

Now I don’t particularly recommend Africa as a lifestyle choice, but as a place to make money, fantastic.

And also, let me point out, Jay — this is a big thing going on in the world today. Few people are aware of the fact that the population is dropping — stable to dropping — dropping radically in most countries of the world, including even in Asia. At this point, the only place the population in the world is growing is Africa. And by the turn of the next century — 2100 that is — 45% of all the people in the world are going to be from Africa, south of the Sahara. This is quite an amazing figure, something most people never think about.

“Well, that’s so far in the future. Why bother?” But the trend is in motion over this time.

Jay: Well, it’s important to spot these trends. You told me before that you had spent some time in Asia as well and Hong Kong, as a matter of fact. I don’t know if you still have it, but I know that you owned some property here as well. That was quite a number of years ago. Is that right?

Doug: Yes, I bought an apartment in Causeway Bay above the Hong Kong Yacht Club. I was overlooking it. I was on the other side of the highway. I bought the top floor of a building. It was during a China crisis. What year was that? 1986. Anyway, at the time, everybody was afraid that China was going to take over Hong Kong. I mean, before the transfer actually occurred, there were these occasional crises. And you could buy a top floor apartment for less than a ground floor apartment, because they were afraid the Chinese weren’t going to fix the elevators. I mean, it was a different world back then.

And, of course, since then, Hong Kong has had one of the hottest real estate markets in the world. I sold that place for more than 15 times what I paid for it. I sold it three, four years ago. Incredible. I wouldn’t buy Chinese real estate today or Hong Kong real estate, in particular. It’s too expensive. I like to go places that are really nice but really inexpensive and, in fact, I get paid for living there. I did this in Spain before Spain entered the EU and things exploded upwards because, predictably, all the Northern Europeans wanted to live in Southern Spain, which became easily possible as they joined the EU, and real estate prices reflected that.

Where else? New Zealand. I bought a lot of land in New Zealand in the late ’90s. I went there to play polo. I played polo for many years. I played polo in Palm Beach where it was very expensive. Very expensive. And I didn’t like the social ambiance or anything about it. But I went to New Zealand, and I found that it was a totally different culture. It was really nice farm polo, and you didn’t have to pay pros. So I bought a lot of land and played polo down there for years. But I bought this stuff when the kiwi dollar was $0.39 US. It subsequently went as high as $0.86. And also, New Zealand was a very backward little socialist country in those days. And anybody with any sense and money for a plane ticket to Sydney or London or L.A. got on it. So it was suffering a brain drain, and prices and the kiwi dollar were very low.

Well, everything changed. It became a bubble. It’s a bubble in New Zealand now. So I’ve sold the thing.

Jay: Yeah, New Zealand is like a billionaire’s safe ground now because it’s way off the grid, and I guess North Korea’s missiles can’t reach it or whatever. I’m just curious, Doug—

Doug: Don’t worry about North Korea’s missiles. That is not going to happen because if you want to attack another country, the last thing you do is use a ballistic missile. That’s the worst way, the dumbest way to do it. So forget about that. North Korean is not going to do anything. Although the US might. The US is a big danger in the world today, actually.

Jay: Yeah. And you have a good reputation, I should say, of holding some strong views, polarizing views, which always make for interesting discussion.

But I’m just curious, over the years, 150 countries, when you see an opportunity forming, maybe it’s like a macro picture that you’re monitoring from a distance, and you see, whether it’s a currency situation or a political situation forming where you might be able to go in and, with the right timing, be able to speculate on, say, a property and take advantage and exploit the crisis, how long does it take you to sort of establish a thesis and then actually go in and do the groundwork and set everything up? Because a lot of these countries, it’s not that simple for, I guess, a foreigner to just waltz in and, say, buy an apartment. Right?

Doug: That’s true. Usually an apartment isn’t a problem anywhere. They don’t care about that. Buying actual real estate — farm land and all that — is often a problem in countries. It depends. But you just have to size things up and ask yourself, are people afraid of this country? Is it a country that has a culture that might allow it to turn around and get better in the future? You just add everything up together and then act.

You’re probably asking, well, where’s the best opportunity right now?

Jay: You read my mind.

Doug: Well, actually, I think Argentina is. I was premature in Argentina because we bought a lot of stuff down here in Argentina. Of course, I’m across the river in backward little Uruguay, but we bought a lot of stuff in Argentina during their last crisis, which was 2002. It looked like a neutron bomb had gone off over Buenos Aires. There were no crowds in the streets, no people. It was deserted. Where did all the people go? I guess they were staying in their apartments because they couldn’t afford to go out or something like that. So we took advantage of that, and it’s been okay.

But then, as can happen in these countries, they elected a moron, a criminal, a sociopath for president. And this happens all over the world because it’s the worst kind of people that go into government — not the best and the brightest. So they elected the Kirchners. First — what was that guy’s name? He’s dead now. And then his wife was much worse than him — Cristina Kirchner. She ran Argentina further into the ground for 10 years. Now she’s out, and the new ruler of Argentina is a guy named Macri, who’s got a lot of problems to solve, but he’s a decent guy doing the right thing, got generally the right view on things, and Argentina is doing very well. In fact, I think Argentina, which has a terrible reputation — justifiable for investors — may be the best place in the world to be right now.

Jay: That’s interesting. I want to ask you about a couple of other areas that are extremely buzzy and hot. You probably know what I’m going to ask you, but one of them, obviously, is cryptocurrencies. It’s just ridiculous. That’s all anyone ever talks about is crypto. So I wanted to not take too long but just to hear quickly your views on that. And then the other area that I’m excited about that I know that you have done or are doing some work under your publishing brand is cannabis and marijuana and the future of that.

Doug: That’s true. Both are true. I was given my first bitcoin by a young Belgian guy that came to visit me at our development I have in Argentina in Cafayate. It was in 2013, and it was worth about $14 when he gave it to me. I bought him lunch; he gave me a bitcoin. I still have it today. I got involved in these things in a big way last year, first of all, when I bought into a company called HIVE Blockchain — which is a publicly-traded bitcoin miner, and that’s done really well; it’s not cheap anymore — and also buying bitcoins and other cryptos, most of which I’ve sold as of the first of the year, three or four weeks ago now, for tax reasons.

So, what to do about cryptos? I’ll say what everybody says. Blockchain is going to make it. Whether the currencies make it or not — I don’t know. The good thing about the currencies is this: they’re an alternative to the fiat, the dollar, and they’re drawing the attention of a whole generation of people to the fact that all of these national currencies — dollars and pounds and euros and whatever — are all just fiat currencies backed by nothing. Actually, they’re just the unsecured liabilities of bankrupt governments. So this is an advantage of bitcoin and some of the other cryptos. And, especially for people in third-world countries, they’ll be able to use these things and save them and transfer them much more readily and profitably, potentially, than dollars, which is what they want to get. This is three-quarters of the people on the planet that have to use worthless things like kwachas and pulas — crazy currencies.

So I like them, although I’m not in them right now anymore. It just got too crazy.

And as far as the cannabis is concerned, I think it’s going to become as big or bigger than the liquor industry for many, many reasons. It’s criminally insane the way governments have had this war on drugs for so many years, because there are many, many medically beneficial aspects to cannabis and many, many other Schedule III drugs that can’t be investigated because of these stupid laws, and millions of people have had their lives ruined because of them. So the legalization of cannabis is a very, very good thing. And it will also open up the door to using hemp for fiber, for clothing, and to replace wood pulp for books, although books are going away, I guess, but still… I think that cannabis has a lot further to run.

Jay: Yeah. I have to agree with you there. I personally haven’t researched it that much, but just from the macro perspective, seeing the way the regulations are going, it’s just opening up. It’s literally… If you’re able to invest in any number of plays, it could be a long runway, sort of like investing into a liquor company in the Prohibition or something similar to that.

If you had to — as an investor or a speculator in your shoes — let’s say for our young audience here listening — and they’re probably amped up now after hearing some of your stories, and they want to get out there and make a name for themselves… If you had to rank the following three criteria — intelligence; connections/contacts; and lastly, just sort of hustle and grit and getting your hands dirty and doing the traveling and that sort of thing. How would you divvy up those three? What’s most important to lead to success as a speculator?

Doug: Definitely the hustle and grit is the most important thing. There’s all kinds of intelligent people that are living in their mother’s basements now and will continue to do so. The grit and hustle is number one.

Intelligence — I think you can actually improve your intelligence. I think you can raise your intelligence. How do you do that? By reading lots of books. And that will allow you to put things together and have a better understanding of the world. So anybody that isn’t reading a lot of stuff written by intelligent and knowledgeable people is getting what they deserve, which is basically nothing. So that’s number two.

Then the grit combined with the knowledge will help you go out there and hustle and get connections, because there is a certain amount of truth to “it’s not what you know; it’s who you know.” Well, you’ve got to know something, otherwise nobody is going to want to know you. It’s important to know lots of people so that when an opportunity comes up, you can call somebody to help you realize it. So all three. There’s really no excuse for failure. There’s bad luck that happens and stuff like that, but you just have to keep humping to make life interesting.

Jay: Yeah. Absolutely. I agree. It’s sort of the allure and the magic of it all is that you don’t need an Ivy League education, and you don’t need a pedigreed family or anything like that. If you just start off from the ground up and you hustle and you have grit, then you can form your own life. You can shape it how you want. And I think that’s the attractive thing, actually, about your type of lifestyle, of speculating, because a lot of people, they think investors that make all this money, it’s only for people that are smart or went to work on Wall Street or blah, blah, blah. But it’s not. And I think that’s the magic of it all. It’s that anyone can do it, and you just have to build upon it.

Doug: You’re absolutely right because if you even start with a dollar — everybody has got a dollar — and you double a dollar every year, after 30 years — that’s the number incidentally, 30 — a dollar to the 30th power is about a billion. So if you can just double dollar every year for 30 years, you’re a billionaire. But probably you could start out with more than a dollar. So, sure.

Jay: There you go. 30 years. So you’ve given us Argentina. We’ve talked about cryptocurrencies. We’ve talked about cannabis. Any other nuggets that you can leave us to start researching?  

Doug: Yeah. Absolutely. Right now we’re in a bubble in most financial markets. We’re in a hyper bubble in the bond market. Interest rates are going back up to levels higher than they were 40 years ago. They’re going to the moon. That’s already started from a very low level. So don’t own bonds under any circumstances. Stocks are also in a bubble for many reasons. Generally, don’t own stocks. Real estate is in a bubble because interest rates are so low. So what do you do?

Jay: Exactly, what do you do?

Doug: And you can’t hold dollars because they’re going to destroy the dollar. I mean, that’s going to happen. This is the time when you own gold, silver, and commodities in general. The only thing that’s cheap in the world now are agricultural commodities — wheat, soybeans, cattle, all the metals, all the foods, cocoa, coffee, things like that. That’s hard for most people to speculate in because trading on a futures exchange is very, very volatile. It’s easier to lose money than to make money, even in a bull market.

So what I suggest people do right now is look at these junior mining stocks. They’ve been going down for the last seven years. This is the most volatile class of securities on the planet. Most are traded in Canada, but when they start running, they go ten to one; they go a hundred to one; they go a thousand to one, as unbelievable as that sounds.

And we’re in a special situation right now. So I would learn about the mining industry and these exploration stocks. I think people are going to make absolute fortunes in the next few years on them in addition to other commodities.

Jay: Yeah, that’s absolutely right. It’s one of the few areas that can, like you say, just have that exponential growth. But you do have to do your work. I mean, a lot of people have lost a lot of money because they don’t really know what they’re doing. They throw some money into these junior miners that haven’t moved for years, and they just sell at a loss or whatever. So you do have to do your research and do a little bit of hustling and grit there. But I agree with you there.

Doug: Yeah. You have to learn something about geological theory and mining engineering and something about the underlying commodities because there are dozens of metals and other commodities that are mined. There’s a lot to learn about. You have to learn about the people running these companies, the way they’re financed. It’s not as simple as you might think. But you do some homework. This is the ideal time. That’s the area to be in, as far as I’m concerned, for the next several years anyway.

Jay: I’ve heard that as well from a number of your peers as well that are in the space — the likes of Rick Rule and such that are deeply in that space — specifically around the junior miners, metals, and stuff like uranium are all interesting at this time, at this juncture, particularly given the backdrop that you just painted for us with the everything bubble, if you will.

Thanks again for your time, and I just wanted to ask you about the projects that you’re working on now. You did mention that you’re working on some fiction, which is actually much harder to write than nonfiction, from what I hear. Are there any things that you’re working on that you’d like to share with our audience?

Doug: Yeah. At the end of this year, my coauthor and I, John Hunt, who is an M.D. who no longer wants to practice medicine because they make your life so miserable being a doctor these days… Our third book in our series, the High Ground Series, is Assassin, where our hero, Charles Knight, having had a couple hundred million dollars stolen from him when he was a speculator and then a drug lord, becomes an assassin. This book is going to be very interesting because it’s about political assassination, a hot topic.

A lot of people say they want to kill Trump. I’m not one of them incidentally. We’re examining these topics and history and, most importantly, the morality of political assassination. So look out for that one. But in the meantime, get in front of this by reading Speculator and Drug Lord.

Jay: Right. Speculator and Drug Lord. And those are available on Amazon. Is that right?

Doug: Yeah. Or at HighGroundBooks.com.

Jay: Okay. And finally, where’s the best place people can find you? I know you have Casey Research. Are you contactable or reachable on there or on social media or anything like that?

Doug: Oh, I hate social media. It’s a huge time killer.

Jay: Yeah. We won’t do that.

Doug: I guess I have an account I opened up many years ago on Facebook and one on LinkedIn, but I don’t mess with them. Best thing for people to do, if they want to contact me, send me an email at info@CaseyResearch.com or at InternationalMan.com. Either one.

Jay: Sounds good. And the Casey Research site is pretty good. I’d recommend our audience to go check it out. You guys actually have a lot of free stuff on there, which is pretty nice as well. Well, Doug, it’s been such a pleasure man. I can hear birds chirping in the background there, so I will let you get back to your—

Doug: I’m out in the country. You can hear the birds. You’re right.

Jay: Yeah, it’s amazing. Thanks again for sharing your thoughts and your insights. We really appreciate it, and we’ll be in touch soon, Doug.

Doug: Okay, Jay. There will be something gigantic, and hopefully not tragic, that will happen over the next six months. So we can get caught up at that point perhaps.

Jay: When this thing happens, you’re going to be the first person that I think of. I’ll most certainly call you. Alright, Doug. Take care. Thanks again.

Doug: Okay. Fantastic, Jay. Talk to you later.

Jay: Alright. Talk to you soon. Bye.