The Good Doctor's Diagnosis

Dr. Ron Paul sees hard times a-comin' — Believer in small government predicts 15-year depression. "This is the big one," says the man who "has been viewed as a crank in Washington, dismissed as a doomsayer and a party-pooper," but whose "views are, for the first time, being taken seriously in Washington."

"The US government just won’t allow the correction the economy needs," he says. Citing the mini-depression of 1921, which lasted just a year largely because insolvent companies were allowed to fail, he says, "No one remembers that one. They’ll remember this one, because it will last 15 years." He predicts, "We are likely to see an inflation depression. In the 1970s, we had stagflation, but not depression. Inflation depression is what you see in Zimbabwe."

About our fiat money, he says, "People will start to abandon the dollar as current and past economic policies create a steep rise in interest rates." More to the point, "The dollar as a reserve standard is done."

Like a good doctor, he not only diagnoses the disease, but prescribes a cure, unpalatable though it may be: "People don’t like the Austrians because they are against big government, against armies and against the welfare state. To accept Austrian economics, you have to accept limitations of credit expansion and that is what has kept the government and financial firms in business for so long."

He also offers some healthy advice to the little guy: "If you are in Treasuries, you will need to be watchful and nimble to time your escape." And this: "The last place you want to be is in the stock market." He suggests "only one" investment option: "It is not so much that gold will go up but that fiat currencies will go down." He continues, "Gold is natural money and has been for 6,000 years."