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 ...
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.