Skip to comments.Marc Faber: "Fed QE3 Will Destroy The World" (and the middle class)
Posted on 09/15/2012 7:20:35 AM PDT by dennisw
Free Republic moderators--- please do not excerpt.--Zero hedge does not mind
"Everything will collapse" is the consequence Gloom, Boom, & Doom's Marc Faber sees from the Fed's latest 'stimulus' (and the fallacy and misconception of how money-printing can help employment). In a wondrously clarifying interview on Bloomberg TV this morning, Faber explained why he was 'happy', since "the asset values of his holdings will go up" but as a responsible citizen he is worried because "the monetary policies of the US will destroy the world." It truly is class warfare under a veil of 'its good for you' as he notes: "the fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won't. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols." Congratulations, Mr. Bernanke.
Must-watch (or read the transcript) - it is truly remarkable
Faber on more Federal Reserve stimulus:
It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don't like bonds. I don't particularly like equities, but I think equities are a better space to be in than bonds.
On what he will do with his portfolio in reaction to yesterdays move:
I own corporate bonds and I recently, as I wrote, I pulled some bonds from Kazakhstan because Kazakhstan economically is a much sounder country than the United States or any European country. But it is in small doses. I wouldn't put all of my money in corporate bonds. They have an equity character. I also own equities still in Asia and as I pointed out already four months ago for the first time in my life I bought equities in Portugal, Spain, Italy and France because they were unbelievably distressed. I think what people overlook today is they look at markets but they don't look at what happens within the market. In the last 12 to 18 months the U.S. has massively outperformed European markets, Asian markets with a few exceptions and now some markets are relatively depressed. I could argue the Chinese stock market is now relatively depressed. So the asset allocators may move some money in Chinese stocks and then they can rally 10% to 20%.
The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won't. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols Very happy. Very good for the Fed. Congratulations, Mr. Bernanke. Im happy. My asset values go up but as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world.
On whether theres any credibility in the Federal Reserve trying to bring down the unemployment rate and improve the housing market:
I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don't want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don't add to employment. They destroy employment. Secondly, I would just like to mention one thing. This money printing business, they have been saying that for the last 15 years that bailing out LTCM were necessary. Then they say the NASDAQ collapsed after March of 2000. We need to create another bubble, print money. They created a gigantic credit bubble and the misery that we have today.
On where gold prices are headed:
I think that the trend for gold prices will be steady, but the trend for the dollar and other currencies will be down. In other words, in dollar terms the price of gold will trend higher. How high it will go, you have to call Mr. Bernanke and at the Fed, there are other people actually that make Mr. Bernanke look like a hawk. So they are going to print money. And they have done it for ages already and where has it led? To record high unemployment essentially since the Great Depression and structural unemployment. Unemployment goes among low paying jobs, not high paying jobs. So, you ought to own some gold, but dont store it in the U.S. because the Fed will take it away from you one day.
On whether he would buy property in the United States:
Yes. Property prices in the south of the U.S. are very inexpensive compared to property prices around the world. The tragedy is that the people that were evicted from these homes have no access to credit. They have no money. They cant buy them. So, with easy money by the Fed well-to-do people can buy these properties and then rent them out to the people that were kicked out of these homes. What a great achievement of the Fed. First they create the property bubble and destroy the wealth of poor people, then the poor people have to rent and the rents have been up over the last 12 months. What a great achievement. Thank you, Mr. Bernanke.
Marc is always a sunny person.
He has been saying this for years and he may be right.
BUT none of the Fed policies work UNLESS the banks start lending more. Then, WATCH OUT for hyperinflation.
As semi-ludicrous as it may sound or read, I have tendency to agree with Faber given it is utter amazing that a man with the academic education of Bernanke can be so historically unaware of what happened to the Weimar Republic, Zimbabwe, Argentina, etc.when they routinely created money out of thin air by printing it. What a frakin’ Idiotmaximus who either is clueless and doing such on purpose knowing full well what is to come down the road for this country - while he obtains a future academic position at/with the likes of Harvard, etc. =.=
Pay off? This Gov’t is accumulating more debt by the minute than it pays off. If inflation makes debt cheap, hyperinflation makes it what...cheaper or valueless? Again, I point to the Weimar Republic, Zimbabwe and Argentina.....ask them how that making their debt cheaper to pay off played out for them by printing money....better yet, just Google images under those names and you can determine for yourself. =.=
Bernanke might just as well have held a gun to my head and demanded my money, or come with a gang of thugs to kick my family out onto the streets. He is a thief.
Like a stopped clock...
You got that right. I am doing alright business wise. Even expanded a little bit. I needed a car for the company as there are many things I don’t need the gas guzzling van for.
I could have taken a loan and bought a new or slightly used car.
Nope, bought a sub 1000 fixer upper. Runs/drives great. Needed a windshield, fender and hood. (tree feel on it) my clients don’t care if it has a rebuilt title and neither do I. I’ll drive it in to the ground.
I also need a 10,000 dollar piece of equipment. I won’t borrow for that either. I can rent one when needed while saving money to buy it.
Only thing I borrowed money for was my house.
I have read the quote.
That comes directly from his Wikipedia page.
We need to prepare the gallows for all these treasonist bastards when the house falls in. Our children will not only be strapped finanacialy for decades but will have to shed thier blood uneccessarily because of the commie cretans in DC. Where are our balls America?
Read the history of the collapse of the Austrian and German economies post WW1 in “When Money Dies”
Hundreds of assassinations of government officials occurred.It got to such a scary point for the turds, that the official line became: “It wasn’t us, it was those greedy speculating Jews!”
And the rest, as they say, is history.
His field of study was the deflation of the American Great Depression and his is determined not to have a deflationary depression while he heads the Fed Reserve. But Bernanke is not a dictator. The Fed's Board of Governors and Open Market Committee approved this QE3 to infinity by a 13-1 vote
Bernanke knows what happened to Weimar and so does the committee that approved QE3 by 13-1 vote. They are willing to take their chances. They feel the need to flood the system with new money which Marc Faber says will only benefit the upper middle class and those wealthier than that
the inflation hysteria crowd -—— goes wild when the money supply is expanded. Where’s the inflation? We are in a deflation.
The money supply can be expanded. it can also be contracted.
Have you filled up your car, tried to buy gold or gone food shopping lately?
Am so sick of the double speak we get from these con artists.
And even with a Google search and reading his quotes, it is obvious and glaringly apparent that most of you see no problems with this. Here’s a thought, how about YOU do some Googling and read about the German, Argentinian, and Zimbabwe economists and such that said virtually the same thing YOU are now telling me I need to Google concerning Bernanke’s quotes on inflation, etc. YOU might find that those who thought like Bernanke were in denial and dead wrong given their countries went into hyperinflation - which they, like Bernanke said they could control - and their money became as worthless as the paper they printed on...in fact, it was so worthless, that no matter the denomination printed on the paper, the true value was by the weight of the paper.....but yeah, perhaps I should Google Bernecky... =.=
I didn't think they were going to do QE3 with oil near $100 and the drought pushing food prices higher. ECRI and others think we already in an another recession. Maybe the FED agrees with them and this is the reason they felt they had to do more. There wasn't much dissent among members.
Did you know that was in the Constitution?
The Constitution calls for the death penalty for:
2. Debasing the currency.
Of course, the Fed has been debasing the currency for the past 99 years.
The guys on www.streettalklive.com had a good analysis of Bernanke’s move.
The MBS buying is a desperate attempt to shore up the balance sheets of the big banks. Nothing more. He has no hope that this will increase employment, raise RE prices, or any other positive result. How the hell was the money supposed to find it’s way into the pockets of the citizens?
Ben is just taking junk bonds off the banker’s balance sheets. The banks will give the funds to their proprietary trading desks who will pump it into stocks and commodities.
Rising oil and food prices will screw the consumer.
Strapped consumers will stop discretionary spending, go bankrupt, etc.
The economy will nose dive.
He will sacrifice all for his banker masters.
We are damn well past Clair Wolfs “awkward moment” people.
Perhaps if you got off the crank for awhile you could see what their agenda is.
2. Debasing the currency.
Something definitely up. Hard to believe they are taking extra ordinary measures for just a sluggish economy..
Well, I heard it on the radio, ergo, it must be true.....not.
OK, I searched the Constitution. It’s not in there. Not explicitly anyway.
Thanks for noting the error.
Exactly what Article is that in?
See 27 above.
I repeated something I heard.