Posted on 02/06/2009 6:59:26 AM PST by Lazamataz
The US risks being hit by Zimbabwe-style hyperinflation and there are signs that the world's biggest economy risks turning into a banana republic, Marc Faber, author of the Gloom, Doom & Boom report, told CNBC's "Asia Squawk Box."
"In the US, we have a totally new school, and its called the Zimbabwe school," Faber said. "And its founded by one of the great leaders of this world, Mr Robert Mugabe, that has managed to totally impoverish his own country. And that is the monetary policy the US is pursuing."
The government's increased intervention in the economy is likely to slow down economic growth because history shows that every time the private sector shrinks to make way for the government sector, the economy suffers, he said.
Asked whether the US risked being faced with 200 percent inflation, Faber answered: "Well, not yet. Not yet. But I think eventually. If I look at government debt in the US, and debt in general, I think the only way they will not default physically on their debt is to inflate."
The Federal Reserve's policy of printing money and the government's intervention in the economy might undermine the US's economic and political clout, Faber warned.
"Well, I wrote two years ago a report entitled 'Is America becoming a banana republic?' And there are some features that characterize banana republics- totalitarian states, very strong government intervention into the economy, and the polarization of wealth," he said.
"And we have all these trends occurring in the US. We are not yet there. And in theory it could be reversed, but I doubt it will be," Faber added.
Because of these factors, US government and corporate bonds, including that of CNBC parent General Electric [GE 11.00 0.15 (+1.38%) ], should be downgraded, he said.
"Yeh, I think GE should be a junk bond. But I also think the US government should be junk," Faber said, adding: "I dont pay much attention to rating agencies. The rating agencies have totally failed over the last 3-4 years to identify sick companies."
Don’t do it Laz!
At least not until I have an insurance policy signed and dated on ya, LOL!
I just can't believe that we're actually going in that stupid direction.
Wow! My truck will be worth over $250,000!
Too late.
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Inflation is the A#1 method used by the left to reduce the value of savings and investments to ZERO, thus making everyone equally poor and dependent on the government.
It doesn’t matter if you had a bank account worth $100 or $1,000,000. Both will become equal to a few pennies under hyperinflation.
Leftists’ dream! Eliminate the “haves” and blame it on some mysterious outside force called “inflation.”
No problem. The federal government can just print more money to give to everyone to cover the loss of purchasing power.
See how easy that was?
So those on yer ping list are a bunch of shiftless bums ?
Ro does the present economy have them all scared sh!tless?
I'm wondering how long the deflation is going to go on.
The Fed is going to start buying treasuries, in large part because of a declining demand for them from overseas. The Fed and Treasury are printing money like crazy. The govt is committed to trillion dollar deficits for at least the next couple years. Yet we don't have any real inflation right now.
No scared of Washington elected esp Democrats. You trust them with economy? LOL . You got hope?
zimbabwe here we come.
In another interview today (Feb 6) Faber said that the price of gold could exceed the DJI. It just recently became higher thatn the S&P 500.
When pressed by the interviewer at what price that might be, he said if we pursue Zimbawe-like policies, it could be a trillion for the DJI & a trillion $ per OZ of gold.
“I’m wondering how long the deflation is going to go on.”
The truth is no one knows, not even the so-called gurus on Wall Street. But you can bank on this....Deflation will end at some point and inflation will rear it’s ugly head. And that turn from deflation to inflation will be swift, adrupt, and absolute. It’ll be an eye-popping experience.
Lot's of hope. Hope that aliens come down in the demonRAT conclave in VA and abduct every friggin' one of them. Beyond that---
NO HOPE---ALL IS LOST
Thank you. You saved me the trouble of finding a good pic from an alternate comic universe to post.
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