International Man: Today, we're going to take a close look at a pressing issue that's growing in importance every single day: political risk.

No matter where you live in the world, political risk is growing and may soon have serious implications for you and your investments.

In the United States, this has become a significant concern…

Unsustainable government debt, a corrupt and failing political system, and swings in attitude toward more government involvement in daily life have severe ramifications you should know about.

Doug is recognized as one of the founders of the concept of using international diversification to reduce one's political risk. Today we're asking him about this problem.

Doug, what inspired you to write your best-selling book, International Man?

Doug Casey: Well, that book first came out in 1976, which was long before most people were thinking internationally and when relatively few Americans had even traveled abroad.

Most people seemed to have the mindset of a medieval serf—one where people were born in one country and stayed there. That's still true today. Most people don't recognize that they need to diversify themselves geographically and politically. It's not enough to be diversified just among investment classes—stocks, bonds, gold, real estate, and so forth— because your biggest risks today are political.

That's what the book was all about: making the most of your personal freedom and financial opportunity around the world. I've travelled to about 160 countries and done business in many, and it's been very rewarding on all levels. I believe in putting theory into practice.

International Man: What is the nature of political risk?

Doug Casey: Well, the world is currently divided into something over 200 nation-states. For some reason, people have loyalty to a government controlling the piece of geography that they're born into. They don't recognize that the government asserting control over them views them as milk cows, typically taxing them—directly and indirectly—for 50% of their incomes. Worse, if you accept being treated like a milk cow, they may decide to turn you into a beef cow.

However, it's not necessary to be treated like a farm animal.

If you are an American citizen, the government treats you as its property. But if you transplant yourself to Argentina or Singapore or any other country, the US government finds it much harder to control you. You still have to deal with the local authorities, of course. But the local government will tend to treat you as a valued tourist, rather than a milk cow. That's the essential philosophy.

International Man: A fascinating fact is that International Man was the best-selling book in the history of Rhodesia. What is the story behind that?

Doug Casey: I was traveling through Africa in the '70s and went up to Rhodesia, today Zimbabwe.

This was 1976, and the war was very hot then. At the time, I must have been the only tourist in the country. At least the only tourist who wasn't packing armament.

When I was in Salisbury, I opened the yellow pages—as I always did in those days when visiting a new place. I looked for a publisher, because I realized that International Man was a perfect book for that environment.

There were around 250,000 Europeans in Rhodesia at that point. Most of them were interested in making what they called "the chicken run." In other words, get out of Dodge before you get your throat cut. Now there are less than 5,000, if that.

I sat down with two publishers and got along very well with one of them. He published the book, and we both did very well on it. In the late '70s, I became something of a media personality in Rhodesia, while it still existed.