International Man: The US government recently took a 15% stake in MP Materials and a 10% stake in Intel to counter China’s dominance in rare earth elements and revive the domestic semiconductor industry.
Are these national security necessities, or a fundamental break from free-market capitalism?
Doug Casey: First, whenever you hear the term “national security,” rest assured, some grifter is selling you on a fraud.
It’s natural for the State, like all living entities, to want to grow. The problem is that the State has coercive power, unlike other entities in society. Force and coercion are antithetical to free market capitalism. Worse than that, people think that the State is something magical. They think that “we the people” own the State. So they’re favorably inclined toward State-owned industries, idiotically believing they’re “stakeholders.” Sure. Just like Soviet citizens were stakeholders.
Trump is making some huge mistakes with what you just mentioned about MP Materials and Intel. As well as taking a so-called golden share in US Steel, and forcing Nvidia to pay 15% of its revenue on sales to China. This is all right out of Mussolini’s playbook.
Most people don’t know that Mussolini coined the word “fascism.” In ancient Rome, an ax, which represented the State, was surrounded by rods called fasces, which strengthened it. Mussolini’s idea was that the State and large corporations would be hand in glove, working together in a “public-private” partnership. Unfortunately, everything that Trump is doing these days is headed in that direction.
International Man: Government equity stakes risk blurring the line between politics and business. Do they build real long-term resilience, or are they politically driven projects destined to fail without state support?
Doug Casey: The State does things because they’re politically productive, not because they’re economically productive. And when you do things that are economically counterproductive, no matter how popular they may be with the hoi polloi, the result will be the failure of the enterprise and a lower standard of living for everybody.
The State is not oriented to political power, not economic profit. And because the State isn’t oriented to profit, nobody has a real stake in the success of its ventures. It’s naturally inefficient. It destroys capital. Trump seems to think that, because he is in charge, things will be different. He’s wrong. MP and US Steel will start to resemble the Post Office or the DMV.
Or the US railroad industry. High levels of regulation caused passenger trains to fail. The government then put them together as Amtrak—losses went higher, efficiency went lower.
Or NASA, which had a day in the sun when it first started. That was before, like all state enterprises, it devolved into a bureaucracy. That’s why almost everything is being done now by SpaceX and other private enterprises.
What I’m afraid of is that Trump will inadvertently, unwittingly, Sovietize the US economy. His idea of negotiating a good deal is to increase the size of the State.
His most recent cockamamie scheme is to have a “Sovereign Wealth Fund.” Which means the bankrupt US Government must borrow money in order to capitalize companies. Great idea. Print money so the State can have ownership and control of even more of the economy.
International Man: Under Peronism, Argentina took similar stakes in the name of sovereignty—with disastrous results.
Do you see parallels today, and what lessons should Americans learn?
Doug Casey: Under Juan and Evita Perón, Argentina actively modeled itself on Mussolini’s fascist Italy. Everything was about State intervention. The State was involved in absolutely everything. Argentina went from being one of the world’s richest countries to just another dysfunctional Third World backwater.
Trump’s big thing right now is massive, arbitrary tariffs. They amount to a national sales tax, thereby reducing the average American’s standard of living. But worse than that, they cut the US off from foreign products and innovations, which become too expensive to bring in. Worse yet, they bureaucratize international trade. As Tacitus said 1900 years ago, “The more corrupt the State, the more numerous the laws.” It’s equally true that the more numerous the laws, the more corrupt the State…
One of the reasons Trump has put on these tariffs is that he thinks it’ll bring manufacturing to the US. That’s what Mussolini and Peron thought, too. But the way to do that is to cut taxes and regulations. High taxes and regulations were major factors driving manufacturing out of the US. Trump seems to think putting 100% duties on Guatemalan bananas will result in a domestic banana industry.
International Man: Reports suggest nuclear energy may be next in line for US government equity stakes. How does that shape your outlook on uranium?
Doug Casey: The utility industry is already a creature of the State. It’s highly regulated, and commissions set the prices that utilities charge. That limits their ability to build more generation and transmission capacity.
There’s no question that nuclear power is the safest, the cheapest, and the cleanest form of mass power generation. Small modular reactors, roughly the size of those on nuclear submarines, are undoubtedly the answer. Hundreds of them could be built and placed where needed, to basically run on a set-and-forget basis for 10 years. Energy is critical to the advancement of any economy, but the US has been falling behind in energy generation for many years.
Therefore, I remain extremely bullish on uranium, which is currently around $75 per pound. And the companies that mine uranium.
Not only do the fundamentals favor nuclear, but, as we speak, the mining industry is totally out of favor with investors. Miners’ proportion of the US stock market is at the lowest level in history, about 1% of market capitalization. In the past, it averaged more like 8% to 12%. Things revert to the mean. That includes mining stocks in general, and uranium stocks in particular. They’ll go from something that everybody hates to something that everybody loves. It’s already happening…
International Man: Where is this trend ultimately headed, and what are the implications for investors and speculators?
Doug Casey: It seems the United States– and therefore the whole world—now revolves around Trump. Harris Kupperman, the hedge fund manager, did a hilarious piece that appeared in Zero Hedge. An investor’s whole day amounts, involuntarily, to just reacting to what Trump does and says.
It’s funny, of course, but it’s also scary. In an increasingly politicized world, everybody feels they can’t act without second-guessing The Donald.
Remember how MAGA started out talking about abolishing the IRS, with no tax for anybody who earned less than $200,000? And how anybody who lived offshore would be tax-free? We don’t hear about these things anymore. We also heard about how MAGA was going to have no wars, ending the Ukraine war overnight. But the US is still sending billions of dollars and thousands of missiles to the Zelensky regime.
It looks like Israel will become the 51st state, with the US bombing Iran. And if that’s not enough, the Navy has a flotilla off Venezuela, sinking a speedboat containing 11 people, without warning, in international waters, with a Hellfire missile. Iran and Venezuela are likely the next tar babies the US will get stuck in.
DOGE started off great—and it still exists, of course—but it’s lost all momentum. Instead, we’re building a new bureaucracy in the form of ICE. Although it serves a useful purpose right now in getting rid of illegal migrants and lawbreakers, when the current crisis is hopefully solved, it will still exist. Like the TSA, it won’t go away. It will be another dangerous armed bureaucracy that can be redeployed in the wrong direction.
Meanwhile, the government is running multi-trillion-dollar deficits, financed by printing money. I’m afraid that MAGA isn’t even talking the talk anymore, forget about walking the walk.
The Greater Depression approaches. As does WW3, and something like a civil war in the US. I suggest fastening your seat belt.
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