Doug Casey on Self Immolation – Individual and National

(Interviewed by Louis James, Editor, International Speculator)

L: Labas, “Dougas,” as we might say in Lithuania -- sure is beautiful here! It’s 11:30 p.m. and the sun is below the horizon, but the sky is still smoldering. Where are you, and what’s on your mind this week?

Doug: It’s afternoon here in Aspen, a nice little communist town in the Rockies. From here the world seems to be turning as usual, but that’s only because the place is full of people who are so rich that they’re largely insulated from the real world, as are the parasites who live off them. We’ll have to talk about the politics and sociology of Aspen sometime. But out in the real world, the engines are grinding toward a halt on the American Titanic – but it’s still moving, so everyone thinks everything is fine. There are signs that the 2008 iceberg was bigger than the crew is telling us, however, for anyone paying attention. Did you hear about that man who set himself on fire in front of a courthouse in New Hampshire?

L: I did, but only through email from friends.

Doug: Yes, the same with me; we have the same friends. It’s truly shocking that a story like this got absolutely zero major media coverage, even though it went out on AP. In Tunisia, a fruit and vegetable street vendor sets himself on fire to protest his government making his life impossible, and it sparks a revolution that doesn’t even stop at his country’s borders. Something similar happens in the U.S. and no one even hears about it… at least not this time. In February 2010 there was a guy who crashed his plane into an IRS office: That did make the national news. But perhaps since then the word has gone out that these things shouldn’t be reported for fear of encouraging others, “national security,” or whatnot.

L: Thomas Ball wasn’t a fruit vendor, but a divorced man who apparently felt that the court system had put him in an impossible situation. [Editor’s note: Ball’s last statement is available online, subscription required.] I’m not a conspiracy theorist, but it defies belief that every single major news editor across the country decided on his own that such a striking story wasn’t news.

Doug: I know. Not a lot surprises me anymore, but this truly is shocking. In my entire life I can only remember two previous instances of self-immolation. The first was that of Buddhist monks during the Vietnam war. I didn’t know what to make of it at the time, but it sure caught everyone’s attention.

L: Why did they do it? U.S. troops on the temple steps?

Doug: No, they were protesting the rule of Ngo Diem in the south, who was Catholic and giving them a hard time. The U.S., of course, was supporting the terminally corrupt Diem regime. When, I’d like to know, has the U.S. ever supported anybody but the worst criminal available in Third-World countries? The second instance was the one in Tunisia earlier this year that touched off the Arab Spring – which is far from over, by the way. Thomas Ball is the first case of it in U.S. history – first one I’ve ever heard of, at any rate – and it received no press whatsoever, outside of acknowledgement in the local papers. The Internet picked it up, of course, but to me it seems extraordinarily serious that an event like this can transpire and not even get noticed. Instead, the headlines were dedicated to such urgent matters as that stupid congresscreature, Weiner.

L: So, are you saying that the powers that be censored the story?

Doug: If they didn’t, it’s certainly further proof of how degraded society has become in the U.S. that something like this could go unnoticed. It’s appalling – disgusting, actually. And scary, on a couple of levels.

But get this: When I was in Dubai a couple of weeks ago, a guide I’d hired to show me around had heard of the event. It was big news there that everyone heard about – it was in all the papers. So you could make the argument that the average Arab may know more about what’s happening in the U.S. than the average American does. That’s a turnaround…

L: What were you doing in Dubai?

Doug: It had been a while, and I wanted to see how things had changed since the crisis. I also went to Israel, Egypt, and Lebanon. I’ll have some articles on my findings in the Middle East in the next few issues of The Casey Report. Obviously, the area being prime oil hunting ground, I was thinking about energy-related speculations a great deal. In practical terms, energy really means oil, coal, gas, and nuclear – green energy is nice, but hydrocarbons and nuclear are the only forms of mass power that can satisfy any need, anywhere, anytime. Most particularly oil. Developments in oil affect the Middle East, and developments in the Middle East affect oil.

L: Hm. Speaking of nuclear, we haven’t talked about that since our conversation on Fukushima, and there’s been time for new market trends to become visible. What do you think?

Doug: Well, as we speak, I see that the price of uranium is $54.25 per pound. It was about $70 before Fukushima, dropped to about this level, bounced back to the high $50s, and is now fluctuating in the low $50s, so it’s definitely cheaper than it was before. But it was over $140 a pound in 2007, so it’s much cheaper than it has already been in this cycle. On the other hand, it’s still roughly six times what it was at the end of the 1990s, when it bottomed around $9. That’s pretty good performance for a commodity. Still, I’ve got to say that I think it has a lot of upside yet ahead – although keeping track of prices in dollar terms is becoming ever more tricky, as the dollar itself fluctuates wildly – mostly down – and the official CPI statistics become ever more unreliable.

The reason I’m still bullish on uranium is because, as we said before – and Fukushima notwithstanding – nuclear power is still the cleanest, safest, and cheapest type of mass power generation available. I find it quite ludicrous that the Germans have announced that they will phase out all of their nuclear plants over the next decade. Where are they going to get the power to replace the approximately 22% they get from nuclear now? Windmills aren’t going to do it. Solar doesn’t have a prayer in northern Europe. Are they going to burn more coal? That’d be great for their environment.

L: Aside from pumping sulfur into the air, coal plants emit C-14 too, and that’s radioactive. Nukes emit less. Maybe they plan to wear thicker coats and eat more cold food?

Doug: There’s a lot of radioactive material released from burning coal, including uranium. Geothermal would be nice, but Germany is not Iceland. Maybe they think they can burn more natural gas, but that’s a greenhouse issue – although the whole greenhouse gas/global warming hysteria has always impressed me as something in between a political scam, a fraud, and a new age religion. But we covered that in a prior conversation; no need to beat a dead horse. Anyway, it seems to me that the global warming hysteria actually peaked a few years ago, and will soon be just another idiotic embarrassment everyone will be anxious to forget. Especially when another hysteria catches their attention.

L: The Russians would love to see the Germans burning more natural gas.

Doug: Of course. And they wouldn’t be shy about demanding political concessions as well as higher prices when they can shut off the pipelines to Europe in the middle of the winter. The Germans will get what they deserve. But then, most everybody eventually does. I’ve got no sympathy for them; stupidity is its own reward.

L: That would literally be a cold war. No need for ballistic missiles. Looks like national self-immolation on the part of the Germans.

Doug: Right – the German reaction is clearly political grandstanding pandering to hysteria. I wouldn’t count on the policy ever being carried through to completion, and wouldn’t be the least bit surprised to see it reversed after the first winter when there’s not enough power to go around. They really have no other practical alternative… though they might try to finesse it by importing electricity from France, which produces over 75% of its power from nukes.

Meanwhile, that hysteria is certainly going to slow down nuclear power in the U.S., but as we said in our conversation after the disaster in Japan, world demographic trends leave no choice but to employ more nuclear power. That makes the current relatively low prices an opportunity.

L: In that context, we should probably mention that there was a flood in the U.S. midwest, and the Fort Calhoun nuclear power plant in Nebraska was flooded. A dike surrounding the plant was even breached, but there appears to be no sign of danger yet. Granted, the plant was shut down for maintenance at the time of the flood, but still, the thing seems to be taking the abuse as designed.

Doug: That’s right, and it bears reiterating that at this point, all of these operating plants are basically 40-year-old technology. Because of the hysteria and resultant government regulations, newer, better, and even safer designs have not been implemented. Almost all the reactors in use today are what are known as “Generation 2.” But there are probably two dozen Gen 3 and 3+ designs that could be deployed; and in a few years there will be Gen 4 units available. Some of these designs are extraordinary – from 10-50 megawatts, self-contained, with almost no moving parts, extremely small, low cost, and capable of being buried for a decade, until they need refueling.

L: So, buy uranium and uranium exploration stocks?

Doug: That’s one way to play it, and we do have a lot of exposure to uranium’s upside in our portfolio. Another, more ground-floor way to play it might be to look into thorium plays. As I understand it, thorium – element 90 on the periodic table – is actually better for power generation than uranium or plutonium. Nuclear scientists originally proposed it for power generation, but governments opted for uranium because it coincided with their weapons programs. As usual, government interference takes us down the wrong path.