Special Guest: Chris Casey is Managing Director of WindRock Wealth
Management. Combining a degree in economics from the University of Illinois
with a specialin the Austrian school of economics, Mr. Casey advises clients
on theinvestment portfolios in today's world of significant economic and financiintervention.
Mr. Casey has served as a trusted advisor to a diverse range of business owners,
advising them on financial issues impacting their companies and thepersonal
wealth. Throughout his career as a Director with the national financiservices
firm Stout Risius Ross, he advised business owners from a variety industries
on the risk and return profile of their equity interests. In addition, MCasey
advised high net worth individuals and families related to their financialtax
and estate planning. At his previous firm, he was also in charge marketing
Private Client Services on a nationwide basi Mr. Casey has been a frequent
speaker before a number of organizations anconferences, including USA Watchdog,
GoldMoney, Freedom Fest, anvarious bar associations and radio shows, including
weekly financial aneconomic commentary on The Edge of Liberty (WNJC 1360, Philadelphia).
Hwritings have appeared in a variety of publications and websites including
TheLudwig von Mises Institute, Zero Hedge, Family Business, Casey Research,and
Laissez Faire Books. He is a board member of the EconomicsDevelopment Council
with the University of Illinois, a Policy Advisor for ThHeartland Institute's
Center on Finance, Insurance, and Real Estate, and Chartered Financial Analyst
charterholder (CFA®). He enjoys cycling, cookingreading, writing, and spending
time with his children. Mr. Casey resides Elmhurst, Illinois.
A 33 Minute PODCAST
CHRIS CASEY DISCUSSES TYPES OF FINANCIAL REPRESSION, THE MYTH OF MONETARY
VELOCITY, AND WHAT IT MEANS FOR INVESTORS.
FRA's Gordon T. Long interviewed Chris Casey of Windrock Wealth Management
on the monetary policy aspects of financial repression. Mr. Casey, an Austrian
economist, is a frequent speaker and writer on macroeconomic topics and their
related investment implications.
Types of Financial Repression
"Financial repression can best be described as government intervention in
the financial markets which causes distortions not only within financial markets,
but throughout the economy."
According to Mr. Casey, financial repression can take direct and indirect
forms. The most damaging form of indirect financial repression is the expansion
of the money supply decreases interest rates. The artificially lowered interest
rate structure causes widespread malinvestment within an economy.
All of this would perhaps be tolerable if monetary policy actually stimulated
the economy, but Mr. Casey states that even Federal Reserve economists have
recognized the ineffectiveness of the multiple quantitative easing programs.
The Myth of Monetary Velocity
Mainstream economists believe inflation is currently mitigated by today's
historically low monetary velocity ("the number of times one dollar is spent
to buy goods and services per unit of time"), so the money supply can be expanded
without the damaging effects of inflation. Chris Casey takes issue with this
as well as the very concept of velocity.
"Velocity has no impact whatsoever, in fact it is a meaningless statistic."
Worse, the theoretical construct from which the concept of velocity derives,
the Fisher Equation of Exchange, is equally faulty. This equation attempts
to explain the price level within an economy, but while it includes the supply
of money, it ignores the demand for money which renders it useless. A useless
theory in the wrong hands can create disastrous policy:
"The real danger is that by looking at velocity, by being focused on velocity,
mainstream economists have been focusing on a false measure which creates false
decisions which is going to have a very real impact on investors."
What Should Investors Do?
Where may the faulty policy decisions lead the U.S. economy? Chris Casey believes
that "the endgame eventually will be a massive inflationary recession." Gordon
T. Long then asked Mr. Casey:
"What could you suggest to our listeners that they should be doing or thinking
about to protect themselves in this environment?"
After recommending investors consider becoming fairly liquid, Chris Casey
addressed how to profit from the coming economic environment:
"Build a portfolio of hard assets. You want to look at anything from precious
metals to certain types of real estate such as rental residential real estate
to farmland. You potentially want to look at foreign currencies to diversify
from the U.S. dollar despite the dollar's strength over the last year."
