AMA 41 – “The Corruption of Capitalism” with Richard Duncan

Corruption of Capitalism Richard Duncan[iframe style=”border:none” src=”” height=”100″ width=”350″ scrolling=”no”]

Join Jason Hartman and author and chief economist at Blackhorse Asset Management in Singapore, Richard Duncan, as they discuss the global economic crisis, how it came about, where we are now, and what happens next. Richard talks about the history of the Great Depression and how we’re back in that same spot today. Listen at: for more details on Quantitative Easing 2 and how it is the government’s “fix” to keep the USA out of another depression, and what will potentially happen when QE2 ends. Richard also shares his solution to permanently end the crisis.

Richard Duncan is the author of The Dollar Crisis: Causes, Consequences, Cures, his prediction of the current global economic disaster, and his new book, The Corruption of Capitalism, a strategy to rebalance the global economy and restore sustainable growth. Richard is an equities analyst, beginning his career in Hong Kong in 1986, and has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington, D.C., as well as headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok and worked as a consultant for the IMF in Thailand during the Asia Crisis. His current position is chief economist at Blackhorse Asset Management in Singapore. Richard graduated from Vanderbilt University in literature and economics, and Babson College in international finance. He spent a year between the two universities backpacking around the world.

Richard Duncan has appeared on many major media outlets, including CNBC, CNN, BBC, Bloomberg Television, and BBC World Service Radio. He has published articles in The Financial Times, The Far East Economic Review, FinanceAsia and CFO Asia. He is a well-known speaker, having appeared before The World Economic Forum’s East Asia Economic Summit in Singapore, The EuroFinance Conference in Copenhagen, The Chief Financial Officers’ Roundtable in Shanghai, and The World Knowledge Forum in Seoul.

Narrator: Welcome to the American Monetary Association’s podcast where we explore how monetary policy impacts the real lives of real people, and the action steps necessary to preserve wealth and enhance one’s lifestyle.

Jason Hartman: Welcome to the podcast for the American Monetary Association. This is your host, Jason Hartman, and this is a service of my private Foundation, the Jason Hartman Foundation. Today we have a great interview for you, so I think you’ll enjoy it. And comment on our website or our blogpost. We have a lot of resources there for you. And you can find that at or the website for the foundation which is Thanks so much for listening and please visit our website and enjoy our extensive blog and other resources there.

Start of Interview with Richard Duncan

Jason Hartman: It’s my pleasure to welcome Richard Duncan to the show. He is the author most recently of Dollar Crisis: Causes, Consequences, Cures by John Wiley & Sons. And actually I believe his more recent book, I apologize, is The Corruption of Capitalism. I think you’ll learn a lot from this interview and it’s my pleasure to welcome, from Bangkok, Thailand, Richard Duncan. Richard, how are you over there?

Richard Duncan: Very well, thank you. Thank you for having me on your program.

Jason Hartman: Well, it’s good to have you on even noting this extreme time difference that we have. There is a lot going on in the financial world. We’ve got Greece on the verge of catastrophe. The euro’s in a mess. We’ve got talks about another quantitative easing and, wow, we are living in interesting times, aren’t we?

Richard Duncan: Unfortunately, very interesting times on a macro scale anyway.

Jason Hartman: How did we get to this point, Richard? So many people are quick to blame sub-prime crisis which is certainly part of it but what is your take on it?

Richard Duncan: A gesture of this magnitude doesn’t just develop overnight. This crisis originated back in the 1960s when US government leaders abandoned the core principles of economic orthodoxy, balance budgets and sound money backed by gold, and wherein our leaders abandon these core principles of economic orthodoxy and this opened Pandora’s box and all kinds of evils have flown out that we’re now having to deal with.

Jason Hartman: So did it really stem then from Nixon taking us off the gold standard in ’71 or what were the origins before that?

Richard Duncan: Well, if it preceded that a little bit I would say that this really began under President Johnson. Johnson was spending too much money on the Vietnam war overseas and domestically on the Great Society welfare programs. And by spending too much, this stimulated the US economy. When the government spends a lot of money, it stimulates the economy. And when the economy is booming, the country imports more from abroad.

And in the 1960s, the US is still under the Bretton Woods System. And so as we imported more and shift dollars overseas to pay for our imports, other countries have the right to convert those dollars into US gold and, as a result, during the 1960s The United States lost half of its gold reserves. It lost $250 million. It lost 250 million ounces of gold. And so by 1971 when Nixon ended the Bretton Woods system by unilaterally declaring that the US is no longer at odds, the dollar is to be converted into gold, you really didn’t have very much choice because US simply didn’t have enough gold left to allow the dollar to be converted into gold. And so at that point then, after 1971, there was no longer any gold backing for the dollar whatsoever, and then extraordinary things started to happen.

Jason Hartman: Well, it seems to me that for politicians who love to spend money to buy votes, whether it be with the social programs, Great Society type programs or back to FDR or to split the military industrial complex or whoever puts them in office, getting off the gold standard is a pretty good deal if you’re a politician, isn’t it?

Richard Duncan: It was feared in the short run but unfortunately it’s led to a worldwide credit bubble of enormous proportions. And that credit bubble now is popping, as every credit bubble eventually does because eventually there’s just so much debt outstanding that people don’t earn enough money in their real jobs to pay the interest on all the debt. And when that happens, the debt blows up and that destroys the capital in the banking system. The capital really is nothing more than money invested in other kinds of financial assets.

And that’s how our banking crisis erupted in 2008. When the subprime mortgages couldn’t be repaid, then that eventually destroyed all the capital in the financial system, not only in The US but essentially globally. And the government had to respond by jumping in and replacing that lost capital through the fed’s program of quantitative easing, round one, and they had to also stimulate the global economy through trillion dollar budget deficits to stave off a new great depression.

Jason Hartman: And so when you look at this picture, the first part of the financial crisis was really quite deflationary. And now we are seeing signs, at least in terms of what really matters to people, which is largely food and energy, we are seeing real signs of inflation. Are we past the deflationary cycle in the credit bubble bursting and onto the inflationary cycle where governments, especially The US being the most profligate, think they can just print their way out of the disaster with more quantitative easing? Where are we in the cycle of this?

Richard Duncan: Well, in a sense, we’re on the razor’s edge. On the one hand, if the government doesn’t intervene by printing money and having these massive trillion dollar budget deficits, then the global economy is going to deflate. And that would result in deflation and depression. On the other hand, if they spend too much money and budget deficits that are too large, then we’re going to flip over into a situation where we have higher price of inflation.

So, what we have seen most recently is as a result of QE2 with the fed printing $600 billion extra dollars. This has created inflation in certain areas, particularly in food prices around the world. Food prices have spiked globally and this is a very severe problem because 2 billion people on the planet live on less than $2 a day and these people have started becoming even more hungry and these people have also begun overthrowing our governments in North Africa, for instance, in the Middle East. And if they don’t stop acuity, it’s likely that the spike was growing higher and that there’s a real risk that these to food riots could spread east across Asia and to Pakistan, India, even China, Vietnam, Indonesia. So, at the food price level, there is really quite a humanitarian disaster going on.

Jason Hartman: Yeah, there sure is. Bill Gross is predicting that there’s going to be a QE3, that the fed is going to unveil a Jackson hole. Do you think there will just be continued easing? Like, you explained that governments, especially the US, have those two choices, either print or keep the deflationary depression from happening or just let it happen and eventually we heal from it. It’s really a catch-22. There is no good way out of this.

And what the company line at the fed seems to be, well, we’re just going to play the razor’s edge and we’re just going to print now and when we get to the point where inflation is a real fear, we have other tools, as Bernanke famously said in his first 60 minutes interview, which he thinks he can just turn off inflation at a whim which I don’t think is possible. It can’t be contained – that’s the problem. But what do you think is next? Do you think a QE3 is on its way?

Richard Duncan: I think it’s crucial for everyone to understand that the global economy is on government life support. In other words, it is the depth in spending by The US government that is preventing us from collapsing into a new great depression. Well, The Great Depression itself came about for reasons very similar, in fact identical, to the reasons that perfused our current crisis.

The Great Depression originated in World War I when all the countries in Europe went off the gold standard to fight the war. They didn’t have enough gold to fight the war so they all started printed a lot of paper money and issuing enormous amounts of government debt. Well, all the government debt that they created at that time, that led to a worldwide credit boom that we now think of as the Roaring 20s. Well, the Roaring 20s were great fun, but in the 1930s, the credit couldn’t be repaid. And at that time, the governments didn’t do very much of anything. They just more or less stepped back and let market forces work. They let market forces reestablish a market determined equilibrium in the global economy. And that’s what happened. Market forces did work.

Unfortunately, the equilibrium that was reestablished was at a level of economic output that was 45% less than it had been in 1929 and at the level of unemployment that exceeded 20% or a decade. And the depression didn’t end until The US government started spending massive amounts of money to fight World War II. And when that occurred, then we established a game changer for the global economy.

Now here we find ourselves exactly in the same position again. When the Bretton Woods system broke down in 1971, after that The US government started issuing enormous amounts of debt to pay for its budget deficits, and also its e deficits abroad, all the debt US created and led to a 30 year worldwide boom that we’ve really all enjoyed all throughout our lives. Unfortunately, in 2008, that credit couldn’t be repaid. And this time, the government realizes that if it did the same thing it did in 1930, in other words very little, then we would have a depression, a worldwide depression. And of course the outcome of that is so uncertain. The Great Depression itself really led to World War II – enormous suffering around the world.

So, in order to prevent that sort of scenario from being repeated, this time the governments have jumped in. And instead of allowing market forces to do their thing and to establish a market determined equilibrium, the governments are doing everything in their power to prevent that from happening. And what they’re doing in The United States is the government is spending a great deal of money, it has a budget deficit that’s roughly $1.4 trillion this year – that’s 10% of GDP. If it were not for that 10% of GDP budget deficit, the economy in The United States would shrink by 10% relative to what it will be this year. And then it would get worse next year. So we are on government life support. Now, of course, that’s in many senses humiliating for the proud capitalist American economy to be supported by the government. But it beats the alternative which is collapse into worldwide depression and with unknown geopolitical consequences.

So, that’s where the QE2 comes in, the fed comes in, with budget deficit. It’s a very large number – $1.4 trillion. How can that be financed normally? When the government borrows so much money, it pushes up interest rate which prevents everyone else from borrowing and spending. So, instead of allowing that to occur, the government’s budget deficit is being financed by the fed printing money. And so what we’ve seen now since QE2 started in November, the fed has printed $600 billion roughly over 7 months. During that 7 months, that was enough to finance the entire government budget deficit over that period and keep interest rates at very low levels.

The problem now is when QE2 ends at the end of this month, there will be no one to finance the government’s budget deficit in that way. So it’s very likely that will cause interest rates to go up and higher interests rates will cause prices to go down. And commodity prices will go down also. In other words, by printing money and buying government bonds which is for people who would have bought those government bonds to buy other things instead like stocks. So this has produced the enormous stock market rally that we’ve enjoyed since QE2 was announced. Higher stock prices have created a wealth effect and that’s supported spending and consumption in The United States.

But now all these things are likely to be reversed. When the fed stops spending money, the bond prices will drop, the stock prices will drop, the commodity prices will drop, probably including gold and oil and silver. Then The US economy will weaken again. And I suspect that sometime around by the end of the year the fed will be sort of concerned in other government policy makers that the fed will once again begin a new round of quantitative easing,QE3, in order to drive stock prices and bond prices back up again and interest rates lower.

Jason Hartman: So, I assume we’re going to see an increase in the debt ceiling then?

Richard Duncan: Yes. If we don’t, there will be a depression.

Jason Hartman: This is a real mess. So, what would you be recommending to people now? I want to delve more into that. But what are your suggestions in terms of investment? I mean, what should one do with their money and maybe even their business interest, career path, any advice you have for listeners at all whatsoever?

Richard Duncan: Every investor is in a different personal and professional position. Some people have billions of dollars to invest and others a few thousand. So of course it depends. Everyone’s financial positions differ. But generalizing, I think that everyone should understand we’re on government life support. It is what the government does that will determine the direction of asset prices.

So therefore, investors, rather than trying to do microeconomic research and looking at factors affecting the supply and demand of individual corporations and their profitability, forget all that. What matters is macro. What is the government going to do? Government policy is going to drive the asset prices.

And there are two main drivers. There’s fiscal policy and there’s monetary policy. So, on the monetary side, listen to the fed. They make lots of announcements, publish lots of papers, and now even Bernanke is giving a press conference following the FOMC meeting each 6 weeks or so. So when the fed tells us that they’re gonna stop printing money which they have said in recent announcements that likely suggest that asset prices are going to drop. And so that’s a good idea then for investors to reduce risk and reduce risk, reduce their waiting and risky stocks and also get out of the commodity markets if they are there.

And, similarly, the other driver for the economy is the government’s budget deficit, the fiscal spending. If the government spends less, the economy is going to grow less. That’s just that simple. Let me explain. Every economy is made up of just four major categories. There’s personal spending, business investment, net trade, and government spending. In The US, the personal spending makes up about 70% of GDP. The business investment is about 16%. The net trade is a negative number because The US has such a big trade deficit. That actually deducts 4% from GDP. And the rest, about 20%, is government spending.

So now we’re in a situation where on the personal spending side, the outlook for that is very weak because the households are so heavily indebted they can’t access any more credit. And therefore the outlook for personal consumption is bad, businesses aren’t going to invest more because there’s already too much capacity already. Net trade is a negative number to start with, that’s not going to help. So the country’s economy is being driven by government spending. If the government cuts budget deficit, then it’s just arithmetic. By whatever amount it cuts its budget deficit, that’s the amount by which the economy is going to grow less.

In the old days, people thought, and rightly so, that when the government borrowed and spent a lot of money through death of spending, this was bad because it pushed up interest rates. It was only a fixed amount of money under our gold standard. And if the government borrowed it, it pushed up interest rates and other people couldn’t borrow and spend. And therefore it was always a good thing for the government to spend less because if they borrowed less then interest rates would come down and that would benefit the economy.

But that’s not the world we live in anymore. We live in the world of paper money. And now as the government spends less, interest rates aren’t going to go any lower. Interest rates are at rock bottom levels already. So if the government spends less, this isn’t going to magically boost consumption or magically boost investment. Just the opposite in fact. When the government spends less, fewer people will have jobs so there will be less personal spending and less investment. And interest rates won’t fall because they’re already at rock bottom levels.

Jason Hartman: Let me ask a question just before you go on there, Richard, about that. I mean isn’t the common thinking, at least on the conservative or libertarian side, that the private sector should be making up for the government? I mean, get the government out of the economy as much as possible. Of course you have to have some but the government has grown to such a behemoth monstrous proportion that can’t there be private sector? That’s not a fixed thing that if the government just spends less then there are fewer jobs, maybe there are during a transition period but ideally if the government spends less then the government gets smaller and the taxes are potentially lower and then more money is available to be in the private sector, right? Or no, where’s the distinction there?

Richard Duncan: Well, a couple of things. The amount of revenue The United States government is taking in its taxes is less than 15% of GDP. That’s the lowest it’s been since the 1950s.

Jason Hartman: And before you go on, I would argue that the reason that is so low is because we’re not practicing enough trickle-down economics. When you raise taxes and interfere more, you actually reduce tax revenue ultimately. I don’t know if you agree with me politically on that, but that’s what I think.

Richard Duncan: Well, I think we tried the trickle-down economics and we’ve cut the taxes and the budget deficits just keep getting larger and larger. I don’t think if we cut the taxes any further that it’s going to improve the budget deficit. If we cut taxes, we’ll just have less tax revenue and the budget deficit will get bigger. And in terms of the GDP, in terms of the whole economy, we’re not beginning from some sort of laissez share Garden of Eden. We can’t just take one step back and be back in a situation where we’re starting from day 1 stepping out of the Garden of Eden. The government has spent so much money for so long, this completely transforms the nature of the economy.

Jason Hartman: That I will agree with, absolutely, and unfortunately.

Richard Duncan: And so now if the government’s been less, then that’s just going to cut jobs and cut investments. And there’s no reason that magically somehow new jobs are going to pop up to replace those jobs. Underlying this entire very sad situation is the fact that now this US economy is just simply no longer viable the way it’s currently structured. The main reason it’s not viable is a result of globalization. The US economy is de-industrializing and all the manufacturing jobs are disappearing because the prevailing wage rates globally, in the manufacturing sector, is $5 a day. And in The United States, the wage rate in the manufacturing sector, if you include benefits, is probably something closer to $200 a day. So our wage rates and manufacturing are a good 30 if not 40 times higher than the prevailing wage rate globally.

Jason Hartman: And so the pressure is to see those equalize and, you know, I would argue that the reason that’s true is because of government interference and especially when you look at like Michigan or the Rust Belt unions. And those are largely supported by the leftist government and that has made The US, that has made that disparity so large, and then you put NAFTA and all these different free trade agreements on top of that. It’s Ross Perot, you have that giant sucking sound, there it goes, there goes the jobs. You can’t have an open free trade type of world and a bunch of unions and environmentalists and regulations and in OSHA and all of that stuff at the same time. They can’t coexist it seems to me.

Richard Duncan: Of course. So if our wage rates dropped to $5 a day, then there will be no one else to buy any manufactured goods, not US manufactured goods or Chinese manufactured goods. What we have seen is 70% of the US economy is consumption. And at the end of the day, consumption is based on wages or else credit. And we’ve hit the point now where the credit that we have already borrowed can’t be repaid. So if wages go down, consumption goes down, the economy goes down because of the sudden emergence of globalization.

In many ways, it takes us back to where we were at the beginning of the industrial revolution. When the English who first invented factory system, well, this resulted in a huge expansion of the society’s ability to produce goods. In factories, you could make a lot more goods than you could in cottages. And so the supply side expanded enormously. Production exploded. The problem was that the people in the manufacturing jobs at that time were paid just at subsistence wages, just enough to keep them alive more or less. And so those people couldn’t afford to buy the things that they were making.

Jason Hartman: Right. And that was sort of like Henry Ford’s philosophy is pay the workers more so they can afford to buy my cars, right?

Richard Duncan: Well, that’s right. When he started paying his workers $5 a day 100 years ago, people thought he was insane, at least the other wealthy people did. But pretty soon those people did start buying his cars.

Jason Hartman: That is true. All I’m saying, to follow up on my previous statement, is the wages have got to equalize between The US and all of the other countries like China or we’ve got to have protectionism. It just can’t be both ways, right?

Richard Duncan: That’s right. And wages aren’t going to equalize because the reason that wages are still $5 a day globally is because demographic trends are so adverse, there are so many people coming into the workforce in places like China and India that wages just can’t go up if left to the laws of supply and demand. So I’m not sure how many manufacturing jobs there are in the world – 300-500 million at the most. Well, I can assure you that there are 500 million Indians who will happily work for 5 dollars a day and that’s not going to change for decades.

And so wages aren’t going to go up there, and so if we’re talking about wage equalization, that means the wages in The US are going to go down to $5 a day.

Jason Hartman: That’s what I was suggesting. I think that’s what we’re seeing. And I almost hate to say this, but why is it fair that some factory worker in Detroit should make $40 an hour while his counterpart in Bangladesh makes $5 a day or probably less in Bangladesh. That’s probably the Chinese worker making the $5 a day. Frankly, it’s inequitable. Why should it be that way?

Richard Duncan: Well, when we start talking about what’s fair and what’s not fair, that’s a very complicated situation. In terms of fairness, why should investment bankers make $10 million dollar bonuses when factory workers in Bangladesh make $2 a day?

Jason Hartman: I agree. But that’s a much more complicated thing.

Richard Duncan: So there’s a lot of fairness issues we could discuss, but in terms of practical policy, the reality is that The United States has a democracy. And the Americans are not going to accept their wages falling anywhere near $5 a day. There will be another Ross Perot type political leader that comes around and points out to everyone that globalization, the way it’s currently structured is really not working out very well for The United States.

Jason Hartman: And I think people are really realizing that now and they have the past 10 years or so. That seems very top of mind to most people.

Richard Duncan: And the Americans will vote for protectionism. And that will be bad for The US, it will be terrible for the world. It will be catastrophic for countries like China that are dependent on export growth. Geopolitical consequences is that sort of breakdown of globalization could be catastrophic.

Jason Hartman: So what should be done? What is the right way out of this? The thing I like about your work, Richard, is that you actually propose some solutions whereas most people just talk about the problem. But you have some ideas along those lines.

Richard Duncan: Right. I think rather than accepting protectionism and the collapse of globalization is inevitable or instead of blaming government spending for all of our problems, I think we need to understand exactly where we are now and how we got here and understand that it is the government spending that got us into this mess, but right now it’s the government spending that’s keeping us from collapsing into depression. It’s kind of a sort of stop gap measure that is keeping us from falling into severe economic distress in The United States and around the world. And if that occurs again, normally in that sort of situation, war erupts.

So what we need to do is develop new policy tools for the new century. The US government now has roughly 100% debt to GDP. That’s a very large amount of debt. But Japan on the other hand has something like 225% debt to GDP. Their bubble popped 20 years ago.

Jason Hartman: And they’ve been languishing ever since.

Richard Duncan: They’ve been languishing but they’ve also managed not to collapse into a great depression. But their story is going to have a very unhappy ending sooner or later. Maybe they can take their debt up to 250% of GDP, maybe 300% of GDP. But sooner or later, this is just going to end very badly.

Jason Hartman: And they have a terrible demographic problem in Japan. They’re just not having children.

Richard Duncan: Right. That certainly makes their situation even worse. So, The US needs to learn from Japan’s experience. We need to learn three important lessons. First, when the big bubble pops, the government is going to have vast budget deficits for years into the future to prevent the economy from imploding. And that’s what we’ve seen since our bubble popped and that’s what’s going to continue for years to come.

The second point, though, is when a bubble pops, it’s a lot cheaper to finance all this government debt than people fear. Japan has 225% government debt to GDP but the yield on their 10 year government bond is a little more than 1% and in The US we have trillion dollar budget deficits that now in a 10 year bond deal there’s less than 3%.

So that’s good news because when the bubble pops, no one wants to borrow any money. There are no viable places to invest the money anymore. And so interest rates decline. Now, the third, and most important question we need to learn from Japan, understanding that we are going to spend massive amounts of government money for years to come, the point is what we need to understand from Japan’s experience is not to waste all that money building bridges to nowhere the way they said the Japanese did. If the Japanese realized 20 years ago that they were gonna take their government debt up to such enormous levels, they would have come up with a very clever plan on how to spend that government money. They could have spent that money in a way that could completely restructure their Japanese economy.

So that’s what The US needs to do. Like it or hate it, the government is going to spend trillions and trillions of dollars over the next 10 years. The only question is is that money going to be wasted or is it going to be invested wisely. If we actually invest that money wisely, we could completely restructure The US economy and develop new industries that would allow us to sell new products to other countries that would balance our trade deficit and generate new jobs.

And for instance, it looks very likely that The US government’s going to have $10 trillion dollars or budget deficits over the next 10 years. Now, what I would recommend is instead of having $10 trillion dollars of budget deficits and really accomplishing nothing except getting further down the road to ruin, the US government should spend an extra $3 trillion dollars. The government should spend a trillion dollars on solar or some sort of other renewable energy, fusion perhaps. The government should spend a trillion dollars on genetic and biotech and the government should spend a trillion dollars on nanotechnology. And those investments would give The United States an absolutely unassailable lead in 21st century technologies and industries.

By spending a trillion dollars on solar, 10 years from now The United States could have complete energy independence, free eternal energy. That would cut our trade deficit by 40% because we wouldn’t have to import any more foreign oil. Moreover, we could cut our military spending by $200 billion a year because we wouldn’t have to defend the foreign oil. And on top of that, the government could tax a domestically generated electricity and bring down the budget deficit.

If the government spent a trillion dollars on genetic technology and biotech, it’s very likely that we could create medical miracles. And as soon as The United States government starts selling a cancer vaccine, not only would we be able to balance that year’s budget deficit, it wouldn’t take long to pay off the entire national debt.

So, in other words, instead of just wasting the money, spending it and consuming this money that’s going to be spent, we need to invest the money, invest it in a way that will actually generate investment returns and in a way that would restructure the economy so that we can build up new industries, new products that we can sell abroad and develop new jobs and new industries to tax so that we can build our trade deficit back into balance, bring our budget deficit back into balance and transition back to a point where we can return to economic orthodoxy where we do have balanced budget and hopefully it can reestablish sound money as well and get credit back under control.

Jason Hartman: Well, certainly no one in their right mind would disagree with you that investment rather than consumption spending is wise. I mean everyone in their right mind would agree with that. I guess the only question is what strides can be made for that amount of money, say in your example a trillion on each. And then when you do that, what structural component sort of start lodging themselves in the economy and never go away? That always seems to be the problem with government is you spend money and then all you do is sort of create another thing that’s just there forever and it becomes hollowed out by special interest and greed and corruption and fraud and it’s just so depressing.

Richard Duncan: Well, yes. But we have a democracy. So, the people should know it’s wrong to blame the government. We are the government. If the elected officials are not doing the right thing and not putting in place the right policies, it is our responsibility as citizens to replace them with policies that work. If there is fraud, we as citizens, it is our responsibility to send those fraudulent individuals to prison and to put in virtuous politicians. It is our duty. We are the government. If we do not handle our responsibility, then our democracy will fail and it will be our fault, we the people. So we are capable of having good government. And it is our responsibility to make sure that we do.

Jason Hartman: No question about it. It’s just the only problem comes into effect when you have that voter who has that responsibility as you say reaping the benefits of the government largesse and then they always vote for their own pocketbook. It’s not perfect, it’s just better than anything else so far and that is for certain.

Tell us about your books if you would and where people can get them and you have 3 so far? Is that correct?

Jason Hartman: Two and the third one is a work in progress. The first book is called The Dollar Crisis. It was published in 2003. And it explained why this global disaster was inevitable given the flaws and the post-Bretton Woods international monetary system.

The second book is called The Corruption of Capitalism and that’s now available on Kindle. That came out about a year and a half ago. The Kindle version has a new preface that was just written a month or so ago. The Corruption of Capitalism is divided into 3 parts, the past, the present and the future, describing the past, how we got into this disaster. But the long series of government policy make mistakes that brought us here and the president described the government life support now that’s keeping us from collapsing into depression and the future describes what must be done in terms of reform to permanently dissolve this disaster before the government does go broke, resulting in a new and long-lasting depression, so the past, the present, and the future.

I have a website and a blog. My website is and everyone’s welcome to go there and sign up for my blog. The blog’s free. If you input your email address, it’ll be sent to you when I write it every week or so.

Jason Hartman: Fantastic. Well, Richard, thank you so much for your insights today. We really appreciated it. And, by the way, I never asked you, what are you doing in Bangkok? Are you living there permanently?

Richard Duncan: Yes, I have been living in Asia most of the time since I started my career in Hong Kong in 1986. So I have spent almost all of my adult life living outside The United States, most of the time in Asia, moving around between Hong Kong, Singapore and Thailand.

Jason Hartman: Fantastic. Well, thank you for coming to us from such a long distance tonight. And we really appreciate having you on the show and everyone should go out and get those books and check out your blog as well. Appreciate having you on, Richard.

Richard Duncan: Jason, it’s been a pleasure talking with you. Thank you for having me.

Narrator: The American Monetary Association is a nonprofit venture funded by The Jason Hartman Foundation which is dedicated to educating people about the practical effects of monetary policy and government actions on inflation, deflation and personal freedom. Our goal is to help people prosper in the midst of uncertain economic times. This show is produced by the Jason Hartman Foundation, all rights reserved. For publication rights and media interviews, please visit or email [email protected] Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate professional if you require individualized advice. Opinions of guests are their own and the host is acting on behalf of The Jason Hartman Foundation exclusively.

The American Monetary Association Team

Transcribed by Ralph

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