Posted on 06/01/2012 7:12:18 AM PDT by blam
Dr. Gloom Mellows But Dr. Doom Does Not
By Howard Gold
June 1, 2012
Commentary: Dire warnings on inflation, dollar don’t pan out
NEW YORK (MarketWatch) — They are this era’s Dr. Doom and Dr. Gloom, two Cassandras who warned long ago about the housing bust, financial crash and debt explosion that almost wrecked global markets.
Marc Faber, the Zurich-born investor and editor of The Gloom Boom & Doom Report, and Peter Schiff, CEO of Euro Pacific Capital, were lonely voices in the mid-2000s when they predicted the debt-induced party would soon end very badly.
Reuters Republican presidential candidate Ron Paul speaks to supporters at a rally in Des Moines, Iowa, in January. And no doubt, events have vindicated most of their maverick views.
But since then they, unlike other permabears like Nouriel Roubini and Gary Shilling, have gone much further, warning repeatedly about the collapse of the U.S. dollar and hyperinflation of the kind experienced in Weimar Germany in the 1920s and Zimbabwe a few years ago.
Those comparisons have become articles of faith among hard-money conservatives who, like Schiff and Faber, support libertarian GOP presidential candidate Ron Paul.
Many of them — with good reason — blame the Federal Reserve under Chairman Alan Greenspan for keeping interest rates artificially low, producing cheap money that led to bubbles in stocks and real estate, as well as an explosion of debt-fueled consumer spending.
Schiff and Faber also took to task Greenspan’s successor, Ben Bernanke, for pumping $2 trillion into the system since the financial crisis began through two rounds of quantitative easing.
They say all that extra money (which banks are holding as reserves) will spur hyperinflation and the collapse of the greenback.
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(Excerpt) Read more at marketwatch.com ...
You’ve seen the warnings all across the major newspapers about a global slowdown. But why no warnings of austerity dead ahead? Why? America’s still deep in denial. We prefer happy talk to the truth. No, nobody will get honest about austerity till after the elections. Then it’ll hit hard.
DJIA down 203 as I post.
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