Some bears say scenes like these Greece riots herald the end of capitalism as we know it (Photo: Yannis Behrakis/Reuters) Ian Gordon is a likable and accomplished guy. Since moving to this country in 1967 to study history at the University of Manitoba, the former Scottish platoon commander has worked as a stock broker and an investment firm manager. Today, in addition to raising capital for junior precious metals outfits, he runs Longwave Group, an economic think-tank based in White Rock, B.C., that has won the respect of billionaire fund manager Eric Sprott. At 69, Gordon comes across like one of those wise old gramps in family movies. He starts most days with a smile as he sets out to walk Pippa, his Staffordshire bull terrier, along the beautiful Serpentine River. “She is off the leash, running, and I let my mind wander everywhere.”
Despite his friendly disposition, Gordon doesn’t attend many social gatherings. “I can’t remember the last time I was invited to a dinner party,” he says. He thinks that’s because he is a “loner” with more acquaintances than friends. But there is another explanation. After all, what Gordon thinks about when he walks his dog would terrify most people—unless they secretly desire to live like Mad Max.
The most high-profile recent event Gordon attended was held in Toronto’s Elgin Theatre in April 2009, in the midst of the global financial crisis. Bay Street butterflies fluttered about, but this was no party. Billed as A Night with the Bears, the event featured gloomy forecasts by market watchers imported by Sprott to warn his clients about the shaky state of the global financial system. Stern School of Business economist Nouriel Roubini, a former Clinton administration adviser, told the crowd not to expect any economic growth for at least two years. Banking analyst Meredith Whitney warned that credit would remain tight. Gordon predicted the Dow Jones industrial average would plummet to 1,000.
The media feasted on the scary projections presented that night, but the warnings were soon drowned out by the cheers and sighs of relief that greeted a market recovery. Two years later, however, the economic picture is even grimmer—and the bears are out of hibernation, roaring like never before. Roubini, commonly known as “Dr. Doom,” now warns that unless global leaders can figure out how to totally redesign the capitalist system, we are facing “unending stagnation, depression, currency and trade wars, capital controls, financial crisis, sovereign insolvencies, and massive social and political instability.”
For Gordon, that’s too optimistic. He is one of the world’s so-called perma-bears who believe capitalism as we know it is destined to implode. They typically prowl the fringes of economic debate, garnering mainstream attention only when things look really bad. But with mounting sovereign debts, anti-austerity riots in southern Europe, and the price of gold soaring, even some moderate financial observers are worrying that market grizzlies might turn out to be right.
Gordon bases his views on a modernized version of a controversial market theory first promulgated in the 1920s by Russian economist Nikolai Kondratiev. His “long-wave theory” states economies follow a long-term pattern of expansion, euphoria and then disaster. As Gordon sees it, the cycle is approximately 60 years long. He compares it o changing seasons, with the first half (spring and summer) a period of growth, followed by a plateau of contentment (autumn), then a deflationary depression (winter).
Based on Gordon’s interpretation of the Kondratieff theory, the current global forecast calls for a long, cold economic winter with a 100% probability of short-term total chaos. “This is a massive upheaval we are predicting,” he says. Simply put, he thinks the money you have in your wallet and in the bank will soon be worth pennies on the dollar, if anything at all. Today’s currencies are backed by nothing more than political promises not to destroy money’s value by printing too much of the stuff, he points out. Yet self-serving governments trying to prop up struggling economies are printing money like never before. As a result, says Gordon, “paper money currencies of the world are all collapsing and will fail.”... continue reading
