Skip to comments.Faber Predicts 'Massive Wealth Destruction' Hyperinflation, Social Unrest, Credit Collapse, Etc
Posted on 04/02/2012 6:55:24 AM PDT by blam
Marc Faber Predicts 'Massive Wealth Destruction' Through Hyperinflation, Social Unrest, Credit Collapse, Or War
April 2, 2012
Marc Faber was on CNBC this morning, peddling his standard doom
He had two good lines:
The first was that the #1 question investors should ask themselves is not 'where can I make the most money' but rather 'where can I avoid losing the most money'?
He then predicted that the endgame of all this easing will be "massive wealth destruction" through some combination of hyperinflation, credit collapse, social unrest, and WAR!
Doom, boom, and gloom indeed.
For what it's worth, he didn't predict, exactly, when this is coming.
As for what investments he does like....
"In Georgia, in Arizona, in Florida their property values will not collapse much more and will stabilize, so I think to own some land and some property, not necessarily in the financial centers but in the secondary cities, these are desirable investments relatively speaking."
(Click to the site to see a video)
(Excerpt) Read more at businessinsider.com ...
Dr Marc Faber is the editor and publisher of the 'Gloom, Boom And Doom Report.'
It's been nothing compared to what a second obama term will bring down on us. I hope everyone remembers that.
"...the stock market rally has largely been driven by a couple of guys, trading stocks back and forth to each other while most sit idly by on the sidelines."
....Human Sacrifice, Dogs and Cats Living Together....Mass Hysteria!
THAT it’s coming is independent of knowing WHEN it’s coming.
Interesting take in this interview:
This guy is “all in” on “junk” silver.
His idea is that after the dollar collapse, those with the only hard currency will be able to purchase producing land and property and rebuild society.
He knows dems have artificially ginned up the economy to have it humming by election time. He knows how they did it...
It’s like a family that’s broke deciding to ‘look good’ for the family reunion so grandma will leave them big money - assuming she dies quickly - before she realizes it’s all a lie - ‘success’ an illusion based on maxed out credit cards and a triple mortgaged house....
In housing, certainly. The wealth destruction could also continue slowly like the frog in the pan slowly getting boiled but doesn't realize it. Like gasoline and grocery prices ignored by government CPI figures slowly sapping purchasing power. Or near zero interest rates taking away income of savers and people on fixed income.
Faber has predicting disaster for the last 7+ years.
My favorite line from him - made in 2009, and appears to be absolutely correct:
“Central Banks and the FED can never raise interest rates again. They are caught chasing deflation by trying to pump up new asset bubbles and won’t be able to raise interest rates ever again. They have no choice. They will print, print, print to the point that it all collapses.”
I don’t think it is a bad idea to have some junk silver on hand.
How much is the issue. I would feel much better if I had more. Maybe 10% of your liquid assets in silver?
I started buying when it was $7 an ounce, and more at $15, but stopped when it shot up to $45.
The guy in the interview had ALL his investments converted to junk silver.
I don’t think I want to live that way - “hunkered down”, so to speak, waiting for the crash.
But, I think 5-10% of your total assets in metals is a good idea. Dirt is another good investment.
If nothing else the whole worlds economy is a house of cards just waiting for the right zephyr to send it tumbling.
If the present spending continues I dont see how we can avoid a collapse like that of Argentina ( http://www.youtube.com/watch?v=7yerKMQc7-w&feature=grec_index )but on a global scale.
But the market is up you say, yeah its up using billions in printed money in the hands of corrupted bankers, investors and their cronies. The world is now flooded with fake and faux money. The game is so rigged and now even the house is starting to lose.
When the whole thing tanks as it will what do you think the entiled class will do when they cant get their cell phones, their food stamps and EBT cards, rent vouchers and so forth.
What we will see is a much more violent version of Argentina, we will certainly see something much closer to Bosnia. American has become Balkanized and splintered, we no longer share the same basic beliefs we have become pocks of people with little in common with one another.
And many of this pockets are very larger entitlement minded and believe they are owed much by others and already shown that they will use violence to get their due.
I see many many small business wiped out by flash mob looting, and see rape, robbery and murder for murder sake. You will see what I call pocket pogroms where yutes will think no more about killing those unlike them than most people think about stepping on a roach. That will be the test of many. Most preppers I know are Christian people and they will hesitate to do what they might have to do to stop the yutes. On the other hand the yutes wont think twice nor lose a minute of sleep, in fact they will smile and laugh about it.
Think of this quote which is one of my favorites:
Star Trek: Deep Space Nine: The Siege of AR-558 (#7.8) (1998)
Quark: Let me tell you something about Hew-mons, Nephew. Theyre a wonderful, friendly people, as long as their bellies are full and their holosuites are working. But take away their creature comforts, deprive them of food, sleep, sonic showers, put their lives in jeopardy over an extended period of time and those same friendly, intelligent, wonderful people... will become as nasty and as violent as the most bloodthirsty Klingon. You dont believe me? Look at those faces. Look in their eyes.
On top of all who knows how many saboteurs (Islamic, Chinese etc) and sleepers have crossed our borders and are now just waiting to cause havoc.
For those who are just starting or are old hands at prepping you may find my Preparedness Manual helpfull. You can download it at:
NOTE! THIS IS A FREE DOWNLOAD. I DO NOT MAKE ONE CENT OFF MY PREPAREDNESS MANUAL!
For those of you who havent started already its time to prepare almost past time maybe. You needed to be stocking up on food guns, ammo, basic household supplies like soap, papergoods, cleaning supplies, good sturdy clothes including extra socks, underwear and extra shoes and boots, a extra couple changes of oil and filters for your car, tools, things you buy everyday start buying two and put one up.
As the LDS say When the emergency is upon us the time for preparedness has past.
Or as the bible says: A prudent man sees danger and takes refuge, but the simple keep going and suffer for it.
NIV Proverbs 22:3
Lastly this for the doubters and the scoffers.
There is no greater disaster than to underestimate danger.
Underestimation can be fatal.
It is hard to predict on short term horizons whether you get inflation or deflation given that monetary debasement causes an initial loss in velocity as people withdraw from the economy. Long term obviously we are being inflated to deth. What we are in currently is a Biflationary Depression. http://www.futurnamics.com/biflation.php
(in before the “shoot my neighbor and take his stuff” guy)
>> “Through Hyperinflation, Social Unrest, Credit Collapse, Or War” <<
With that wide of a window to pass through, he can claim success in his prediction no mater what happens.
The folks in urban areas will attempt to "raid" the folks in the rural areas through confiscatory property taxes.
The best investment is in one's own skills and abilities, and while they will confiscate gold and silver, they won't confiscate a good set of tools (which will preserve their value - or even grow in value).
A person is going to have to think a bit out of the box to survive into the future.
Yup...bet on it.
Also, mileage tax (tax you by the miles you drive), 'enter the city' tax, exorbitant water tax (everyboby uses water) and other things like this that we haven't even thought of yet.
See post #19 & 20...you could be taxed off the land. He can take his silver with him if he has to leave.
Wow, I have an old Prowler trailer like that (different color) that I use as a tool shed up at the ranch.
Does that mean that I can be prezuhdint?
What is “constitional silver?”
“There *will* be massive inflation and confiscation of precious metals - you can bet on it. It will be just like FDR.”
That was done by a willing public. There was little resistance to edicts coming from the White House during that era.
I don’t think there would be near as much compliance today. As long as you don’t advertise your holdings, and its not being held in an IRA,registered in a bank account, or insured, you would be safe, and actually better off, as confiscation would drive up the value of precious metals.
I could never figure out why “shoot my neighbor” guy doesn’t realize that his neighbor is most likely stockpiling lead of his own to defend against such looters.
He’s using that term instead of “junk silver”, the term used for pre-65 US coinage with no collector value.
As the interviewer commented, he’d rather call it “ugly, dangerous, cancer causing, junk, worthless silver” instead, to keep the demand down. :)
“Long term obviously we are being inflated to deth. What we are in currently is a Biflationary “
This is the result of Bernanke’s free money policy. Decrease the interest rates so low that people can not afford to save money in the conventional way, the return is actually negative when inflation is factored in. Where else are you going to make even a semi decent return? The only place for the majority, is the stock market.
So you are forced to either lose money in bonds or CD’s, or take a big risk in an over bought market.
For savers, the Fed is stealing your money and giving it to crony bankers and institutions.
What goes up, must come down.
You will note, though, that all four of his predictions generally fall into the category of “Bad Things”.
My Krugerrands are legal currency.
LOL. I was going to post that if one happens all others would follow. I wasn't sure that it was true so I didn't post it.
Someone has to make you leave your land. OR keep you from returning to it.
Probably before that, there will be ‘officials’ who will try to stop your travel to/fr your land. They’ll be in uniform and armed, and will sincerely believe they are right.
They will want you to report to an area where you can be protected.
First the little zombies will come; followed by the bigger/meaner zombies; followed by the organized, barbaric zombies.
If we get a hyperinflation, and we could given the Fed’s current predicament, stocks will ultimately be a good investment because they will be selling their products at the inflated prices, paying their costs at those same inflated prices, and reporting profits in those inflated dollars.
If you multiply everything on the income statement and the asset side of the balance sheet by 100, the share price should go up 100 times once things settle back down. And if the company is currently a little debt heavy, that debt becomes easier and easier to pay off besides.
Granted, in the interim things can get a bit messy, but owning a piece of a mutual fund composed of solid companies is a good way to ensure that your investment portfolio participates in a hyperinflation. Owning bonds instead is a good way to ensure that you’re wiped out, by the way.
“If we get a hyperinflation”
This is the part I’m having trouble with. Increasing inflation takes at least two basic elements, Demand and a shortage of supply, based upon true value.
Right now there is no demand side of the equation. There is no incentive to increase workers wages, to support an increase of inflation. The profits made by a lot of the companies during the past 3 years has been at the cost of workers, resulting in increased productivity and higher earnings.
To increase workers wages would put pressure upon profits, because there would be little reward in increasing prices in a weak demand economy. A lot of the US economy is in a deflationary cycle: Housing, which impacts a large number of people.
It seems to me there would have to be a total loss of confidence in the US dollar to trigger high inflation, and I just don’t see that for some time.
Right now we are in a circular cycle, where almost free money in being used, by a limited number of people, who invest in the market driving up prices. There is little risk for them.
Inflation will show up in commodities, which is the true value of the US dollar, but that inflation can’t be matched on the demand side because there just is no sustained increase in real wages. So the average person is left being shorted from both ends.
“but owning a piece of a mutual fund composed of solid companies is a good way to ensure that your investment portfolio participates in a hyperinflation”
I agree, and will indulge that philosophy further when the market is a little less hot.
I’m investing in good quality companies that pay out a decent dividend and then hold for a long time.
Yeah, the whole idea that the preppers wouldn’t be armed is some sort of delusional thinking.
I suppose the “SMN” guys just think that they’ll just roll over everyone without resistance.
And I guarantee, the battle rifle would probably be part of your gardening equipment post-SHTF.
More specifically. Don't make a tax payment on your land today and see who shows up to claim it.
You don't own it, you're just renting it from the government......
True indeed today.
In a post-SHTF scenario, the enforcers will be different.
“And I guarantee, the battle rifle would probably be part of your gardening equipment post-SHTF.”
REM: POST-SHTF: always garden/patrol/scavenge/recon in pairs. always be armed. study small unit tactics: http://www.globalsecurity.org/military/library/policy/army/fm/7-8/index.html
Thanks Blueflag, I had lost that FM.
It is generally a chunk o' change to do somewhere between five and ten years worth of taxes in one blow but it is possible.
Here is a recent bloomberg interview with Faber
I can’t even find constition in the dictionary.
I think that we all have figured out that nothing good is coming down before JC returns. If you’re predicting bad stuff, you have to be specific on what and when to get any respek these days.
>>This is the part Im having trouble with. Increasing inflation takes at least two basic elements, Demand and a shortage of supply, based upon true value.
Right now there is no demand side of the equation. There is no incentive to increase workers wages, to support an increase of inflation.<<
In my opinion, inflation takes only one “basic element,” that being a rapid acceleration of the money supply. It has virtually nothing to do with supply and demand. As for wages, they will always lag, not lead, in a hyperinflation.
We might not get one, but the Fed has certainly set up the situation so that it’s now highly possible, though not necessarily highly probable. This is because they have allowed excess bank reserves to grow to unheard-levels, and if banks decide to start deploying those reserves, instead of accepting a low level of interest income from the Fed for holding them, we will get rapidly accelerating prices.
The Fed could counteract this by raising reserve requirements dramatically, or by selling off their security portfolio (although they will likely be taking massive losses if they decide to do that), but I’m not altogether sure they’re prepared to do that, not that they even realize the need to do so. We’ll see eventually, I guess.
My main point was that quality stocks do constitute inflation protection to a large degree, although the ride can be a little “too interesting” sometimes. Nevertheless, if prices are up by a factor of ten in the economy five years from now, so should revenues and profits, so stock prices should follow.
If you aren’t familiar with Faber’s perspective, he is actually tying all those catastrophes together as the inevitable result of fiat currencies created and manipulated by international central banks.
“April 2, 2012
Marc Faber was on CNBC this morning, peddling his standard doom “
And Joe Weisenthal was on BI delivering his typical, “debt-doesn’t-matter” and “fiat-currencies never lose value” knob job to the central bankers.
Skinny little Joey with the mussed-up-hair is an idiot.