Doug Casey: “Artificially Low Interest Rates Are Very, Very Stupid”

Holding back no punches at this year’s New Orleans Investment conference, Doug Casey of Casey Research blasted the Federal Reserve for cutting interest three times in four months.

“It’s incredibly stupid,” he said.

“What you want to do is encourage people to save, even squirrels understand how important it is to save that’s why they put nuts away for the winter. But our equivalent of putting away nuts is we put away dollars in bank accounts and you are encouraged to (save) if interest rates are high.”

While other speakers believe we are heading towards uncertainty, Casey foresees a “greater depression” due in part to the collapse of Western civilization, the mass printing of trillions of dollars globally and distortion of investor sentiment.

“The government is really on its way to taking over the economy indirectly through the Federal Reserve printing money by the trillions. Not just the American government, but the Europeans and the Chinese and the Japanese and all these little countries are doing the same thing and this is going to have immense consequences,” explained Casey.

“It’s going to destroy the savings of the average person … if you destroy the currency you are going to destroy all the people that are saving.”

By keeping interest rates “artificially low” the Casey Research founder and namesake believes consumers and investors are being falsely lulled to spend.

“(Low rates) encourage borrowing and living above your means and discourage saving, which is how you get rich,” he said.

Instead of using currency as a safe haven or wealth generation tool, Casey suggest gold coins and silver.

“Why gold?” he said. “Because it’s the only financial asset that is not simultaneously someone else’s liability and in a world that is walking a tight rope you want to have financial assets that can’t be defaulted on or can’t be inflated out of existence.”

He continued, “So I suggest that people buy gold coins, they buy silver and if they want to speculate, and you are probably going to have to speculate in order to stay ahead of the chaotic financial environment we are looking at, the only cheap place in the market are gold mining shares.”

However, the veteran market watcher did warn that gold mining shares are highly volatile.

Listen to the interview above for more from Casey on the gold price and how high he sees the precious metals going as the global economy becomes opaquer. You can also click here for our full New Orleans Investment Conference playlist on YouTube.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.