- LIVE FROM -

Casey Research 2013 Summit
"Hopeless, But Not Serious"

By Shannara Johnson, Chief Editor, Casey Research

"After listening to some of this morning's speakers, I made sure to program the number of the suicide hotline into my cell phone," real estate expert Andy Miller joked at the beginning of his speech.

And legendary natural-resource investors Rick Rule quipped, "It's amazing-I actually get to be the positive guy here."

This is my first time at a Casey Summit, and over the years I've heard tales of the shock-value speeches as well as the natural bond among attendees and speakers. Frankly, I always thought the latter was somewhat exaggerated, so I'm all the more amazed to see that the vibe is every bit as cozy as I've been told. Since early in the morning, the expansive Map Room has been abuzz with laughing, chatting, good-humored people from, it seems, all walks of life and all ages-some in Armani suits, others in khakis and polo shirts.

They've come here to hear the big names present their latest findings: from Doug Casey, who started this morning's intellectual fare with an analysis of the decline of the Roman Empire vs. that of the US (his conclusion: we're all freakin' doomed), to Casey Chief Economist Bud Conrad who made his case that when-not if-the bond bubble pops, it'll be bound to burst some ear drums, to James Rickards, who in his typical rapid-fire way presented one jaw-dropping fact after the other.

A Great Nation in Decline

Disturbingly, there are more parallels between the dying Roman Empire and modern-day America than you may think, says Doug Casey. For example, shortly before its downfall, Rome saw a distinct decline in population and Roman citizens were disarmed by their government. On the other hand, Doug argues, "does it really matter if the US declines?" After all, it only follows the Second Law of Thermodynamics, according to which all things entropy, nation-states being no exception.

Bud Conrad, too, had some choice words to say about wars not just endangering the national but also the financial security of a country. Due to outsized military spending and a huge debt burden, the US is even more vulnerable to the inevitable bursting of the latest bubble after dot-com and housing: the interest rate/bond bubble.

Bonds peaked in 2012 thanks to QE, says Bud, and central banks continue expanding the money supply at an annual growth rate of 17%. GDP growth of the G7 countries is up 60% over the last 12 years-while that may sound good at first glance, debt growth is up 100% over the same time span, and the Fed's excessive money printing will ultimately crush the US dollar.

However, you don't have to stand by and watch the sky fall. Bud recommends to "actively profit from the destruction of the dollar, instead of just trying to protect yourself." He suggests buying put options on the iShares Barclays 20+ Treasury Bond Fund (TLT) with a strike price of 80 and an expiration date of July 2014.

Inflation, Deflation, Depression

"I bet in a competition with Bud Conrad about the most depressing presentation, I'd win," claimed Currency Wars author and Senior Managing Director of Tangent Capital Partners, James Rickards. (He was actually wrong. Lacy Hunt beat them both later on, presenting numbers that no doubt made half of the audience crave a double dose of Prozac.)

Jim presented compelling evidence that all the talk about economic recovery is a bad joke. "If you want to know what a depression feels like, this is it." He says most economists have been dead wrong in their recent forecasts because they believe we're in a normal business cycle-but this is anything but normal.

His analysis shows that we are due to enter the second recession within this prolonged depression, which he believes will start in early 2014.

"Deflation is the Fed's worst nightmare," he says. To maintain a semblance of control over the economy, Bernanke & Co. have to manipulate Americans into behaving in certain ways-encouraging people to borrow through negative real interest rates, and encouraging them to spend through inflation expectation shocks.

In the last installment of the game, Jim says the Fed will employ the "helicopter money" tactic, putting more money directly into the hands of the populace... by persuading the US government to provide more tax cuts.

Jim accurately predicted that the Fed wouldn't taper this year. How did he do it? Simple: "The Fed said we taper if the economy grows according to our forecasts-but their forecasts are always wrong."

He says Bernanke is playing a very dangerous game: "The Fed thinks it's playing with a thermostat, but in fact it's playing with a nuclear reactor, and if they do something wrong, they'll cause a meltdown."

Face to Face with Ron Paul

During the coffee break, in the luxurious resort lobby I run into former US presidential candidate Dr. Ron Paul, who's going to be the keynote speaker at tomorrow's banquet. He came a day earlier, as promised, to mix and mingle with the crowd. He's already surrounded by a small circle of freethinkers as I step closer and shake his hand.

As usual, he's not holding back with critique of the US government. "The government shutdown is just a charade," he says, smiling, and everyone loudly agrees. After all, none of us was born yesterday.

"If the government is such a nonessential service," says a Ron Paul fan whose attendee tag shows the name "G-Man," "then why do we have to pay for it?" Laughter and nods all around.

I'm thrilled to meet Ron Paul face to face; he's just as nice and modest in person as he appears on TV. At the risk of appearing sycophantic, I tell him that I usually don't vote, but I would have if he'd been the Republican candidate. I can't believe that he's here all by himself-any other politician would have shown up with a huge entourage, but he doesn't have anyone with him, not even a personal assistant. I actually heard he stopped at a McDonald's on the way to the resort-I would have loved to see the customers' faces.

Lacy Hunt: The Must-Hear Speech of the Day

Then I'm heading back to the Grand Ballroom, where Dr. Lacy Hunt is starting his speech, "How Debt-Induced Monetary and Fiscal Policies Are Undermining the US Economic Prosperity." The speech is every bit as cheerful as it sounds (during lunch break, I tell Lacy that he won against Bud Conrad and James Rickards hands-down, and some attendees at our table wholeheartedly agree with me).

Lacy Hunt says there's no doubt that Obamacare will mean a huge de facto tax increase for Americans. He fully agrees with Jim Rickards that there is no economic recovery.

"Consumer spending," he says, " is at 2%, that's very low. We've seen lower percentages before, but never in a phase of economic expansion." For another shocker, he compares economic growth throughout the entire US history with what we're seeing today. It turns out that in terms of GDP growth-currently a pathetic 1.6%-we're only doing marginally better than in the 1930s, during the Great Depression.

And then he fires off charts with plunging lines and plunging numbers, one after another:

I have to say, his charts and numbers are brilliant and right on the mark. While the audience and I are raptly listening to his presentation, I kind of wish he still worked at the Federal Reserve (which he did, at the Dallas branch), just so they could have at least one person with a bit of common sense.

There's a lot more to say about Lacy's speech, way too much to fit here. You can hear it all on our full-length Summit Audio Collection-in CD and MP3 format-which comes with an extra CD containing all the charts and presentation slides. To pre-order and save $100 right now, just click here.

The information may not all be pleasant, but my personal motto is that if there's something to know, I'd rather know. The phrase "Ignorance is bliss" must have been coined by a very ignorant person.

After Lacy Hunt's bone-chilling speech, it's easy for the rest of the day's speakers to appear like rays of sunshine. Take technical analyst Dominick Graziano, for example. While he thinks gold may be going lower still before a real recovery will happen, he also believes we may be at the beginning of another great equity bull cycle.

Or real estate wiz Andy Miller. While he doesn't believe that housing is in any kind of real recovery, he asserts that there are still good investments to be had. He himself, he says, just bought a multi-family apartment complex in a particularly resource-rich, booming region of the US.

As he has predicted at the beginning of his speech, Rick Rule, chairman of Sprott US Holdings, indeed comes across as exceedingly positive with his presentation, "Bear Market Lessons for Bull Market Profits." He's also the speaker paraphrasing behavioral psychologist Paul Watzlawick: "The situation is hopeless, but it need not be serious."

Rather than a reason to shy away from buying stocks, he reminds the audience, bear markets are the greatest opportunity to load up on the best junior resource companies at fire-sale prices. You wouldn't insist on buying any other product when prices are high and shun it when it's on sale-so why act differently with stocks?

"You've already been through this," he says, "you've been through the pain. Why not hang on a little longer and actually enjoy the gain?"

The day is closed out by goldsilver.com owner Mike Maloney showing a not-yet-released episode of his hit video series "Hidden Secrets of Money," and by a panel on International Diversification with International Man Editor Nick Giambruno, Casey Senior Economist Terry Coxon, World Money Analyst Editor Kevin Brekke, and several other experts. It's almost too much to absorb.

Looking at the attendees at the end of a long day, I don't get the impression that today's shock-value speeches have been much of a downer. They're still laughing and chatting, in groups amongst each other and with the faculty none of whom seem to mind socializing with their fans. The bar is opening now, and I bet the lively conversations will go on for the rest of the night.

I'll be back with more observations "live from the Summit" tomorrow.