Doug Casey discusses the potential impact of tariffs replacing income tax and warns of challenges
From Investing.com: 2025-02-14 00:21:00
In an interview with the International Man, Doug Casey discusses the history of tariffs in funding the US government before income tax, and the potential net positive impact of tariffs replacing income tax today. However, he highlights the challenges in drastically cutting government size for tariffs to be effective. Casey warns that high tariffs could lead to a decrease in government revenue and a negative impact on international trade, similar to the Smoot-Hawley tariffs in 1929. He emphasizes the need to reduce government spending and deregulate for tariffs to work effectively.
Casey also discusses the potential indirect effects of tariffs, such as capital controls, monetary system shakeups, and disruptions in global trade. He warns that significant tariffs could weaken the demand for the US dollar, leading to a currency panic and capital controls. Casey suggests that Trump’s economic policies, including tariffs, could have contradictory effects and urges for constructive actions like deregulation and lower government spending for a stronger economy.
Amid rumors of surging gold demand due to tariffs, Casey speculates on gold transfers from London to New York, potential US government gold purchases, and the involvement of governments and institutions in the gold market. He emphasizes the importance of physical gold ownership and staying informed to protect wealth in uncertain times.
In a time of market distortions caused by government actions like tariffs, Casey advises speculators to remain liquid and hold real assets like gold and silver coins. He warns of the chaotic situation created by tariffs and suggests preparing for potential fallout by owning physical assets stored securely. Casey stresses the importance of staying informed and owning physical gold as a form of wealth insurance in times of crisis.
Read more at Investing.com: Trump’s Tariff and Income Tax Plans: A Major Shift for Gold and Your Portfolio