Doug Casey: Almost all markets are distorted in some way by government intervention.

Interest rates are the price of money itself. They're the blood of an economy; when they're manipulated, it amounts to blood poisoning.

Currencies have become nothing more than floating abstractions. They move up and down by government fiat.

The same is true of every single food item, starting with all the grains, which provide 50% of mankind's calories, directly or indirectly. Governments subsidize some, put duties on others, regulate how much can be planted, then often store surpluses. This is true of every food—citrus, sugar, coffee, etc., etc. There are no exceptions.

The State distorts metals markets directly with price or import/ export controls as well. But regulations regarding permitting and production are more serious and stretch over decades.

We can't be sure what prices would be if we lived in a free market economy. Except to say they'd be much lower without the dead hand of the States constantly throwing sand in the gears of commerce.

International Man: Oil is the world's most important commodity, yet its price can be distorted by sanctions, strategic-reserve releases, production quotas, subsidies, and political pressure. How much of today's oil price is determined by genuine supply and demand?

Doug Casey: Oil is certainly the most important, most political, and by far the highest dollar volume commodity.

Like every commodity, its basic price parameters are set by supply (how much is produced) and demand (how much is used). But both of those fundamentals are distorted by government policies, starting with taxes on both producers and consumers.

And now we also have to guess how long the wars between Russia and the Ukraine, and the U.S./Israel and Iran will last, and how bad they'll get. Russia is a huge hydrocarbon producer. The Middle East produces about 1/3rd of the world's oil and 1/6th of its natural gas. Most of it is now cut off.

It's not just a question of reduced production. People forget that raw petroleum is basically useless. It only becomes useful and valuable after it's "cracked" by a refinery into its valuable components—gasoline, diesel, kerosene, and other distillates. And they forget that oil's only buyers are refineries.

But the refineries are major targets in these wars. Not only that, but they're about the easiest targets to damage and the most expensive to replace. And they won't be replaced quickly because they're likely to be blown up again.

Since I believe these two wars are not only going to continue but get much worse, I'm betting the prices of oil and its products are going up, and availability is going way down. And that's not even counting the possibility that these wars will expand to something worldwide.

War is historically the major activity of governments. It's been said, correctly, that war is the health of the State. And governments today are far, far larger and more powerful than ever before. So you can count on much more interference in both the production and consumption of oil in the future. And radical movements in its price.

International Man: When governments can create trillions of currency units, rescue favored institutions, and intervene whenever markets move against them, has investing become less about finding value and more about anticipating the next manipulation?

Doug Casey: Let me define a couple of terms—investing and speculating. Many people throw these words around without really understanding what they mean. The result is sloppy thinking.

Investing is about allocating capital so that it can mix with labor and produce more real wealth. Think about planting a seed to grow a hundred new seeds. Profitable investing is always hard work, but it becomes risky and unattractive in a highly taxed and regulated environment, especially in wartime.