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Marc Faber's Must Watch 2010 Presentation
As someone once said, the only man who can tell a room full of people they are doomed and get a standing ovation, Marc Faber, gives a terrific hour long presentation to the Mises Circle in Manhattan on May 22, discussing the economy, interest rates, markets, why having massive output gaps (see previous post for Bernanke's most recent dose of lunacy on the matter) and hyperinflation can easily coexist, why the Fed will never again implement tight monetary policy, why Greenspan is a senile self-contradictor, why Paul Krugman is a broken and scratched record, and the fact that pretty much nothing matters and we are all going to hell. Little new here for long-term economic skeptics, but a must watch for all neophytes who are still grasping with some of the more confounding concepts of our dead-end Keynesian catastrophe and not only why the world can not get out of the current calamity absent a global debt repudiation, but why gold is the asset to own, even though one must not be dogmatic and shift from asset class to asset class in times of tremendous currency devaluation (i.e., such as right now). 2010's must watch Marc Faber presentation.
One thing we disagree with Mr. Faber on, is that Asian banks did not buy CDOs during the housing bubble - this is patently wrong. As a detailed perusal through the Goldman discovery will confirm, Goldman looked increasingly eastward, first to Europe, and then to Korea, Japan and Taiwan, when finding the dumbest money around to invest in monstrosities such as Timberwolf, Abacus and others. If Mr. Faber is investing based on the assumption that Asian banks are free of this relic of the credit boom, we urge him to promptly reevaluate his investment thesis as he will certainly lose money here.
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Faber is not only a genius when it comes to finance; but he is also one cool dude human-wise. Growing your own pot on a plantation deep in the wilderness of Thailand is what I call being a tough motherfucker. Also working as one of the "big swinging dicks" at Drexel is a plus.
The cool factor comes mostly from his accent, sandals, and little pony tail. And Cheeky, you and I have vastly different definitions of tough. But I still love ya, baby.
"ze beahr markit iz in itz begining .... ze kapital outflowz will increase and ze value od ze azestz will fal zignivicantlly ... "
But ponytail on a bald dude just screams "bad guy in a 1991 Jean Claude Van Damme D action movie".
...or even Jean Claude Van Damme in a Jean Claude Van Damme D action movie.
- watching now, this is the best comprehensive presentation of his I've seen.
Not a bad guy, just another gwai lo Mong Kok spa patron (cool factor). He probably gets his pedicures from the 70 year old old man with the 9 inch blade on Nathan Road in TST (toughness).
I do like his observation on easy money re crude oil outlays as an add'l tax on consumers. Paging Ben S. Bernanke: Unintended consequences are indeed a mother fucker! Of course Ben's reply is, "I meant to do that, just ask the Bush's family and their oil rich friends."
Also his geo-political illustration of China's exposure to transiting Middle East oil was well done. Maybe US is in Afghanistan for reasons other than Osama? Duh!
More on owning rural land, gold, etc. I think Marc would agree with me when I say,
DISINTERMEDIATION, BITCHES!!!!!!!!!!!!!!!!!
Lol...I could see him being a regular wanchai warrior back in the day as well, though I believe he’s traded up for greener pastures in Thailand in recent years. Nonetheless he does call a spade a spade – a trait that often goes begging in certain circles.
I still can't believe they call Roubini "Dr. Doom". Whatta piker...
The coastguard after searching my boat told me they where looking for dope,,,so I told them, I'll follow you..They got a kick out of that...Fred Reed...Guadalajara Mexico..Farber is of the same ilk...
I thought you told me to not smoke (this was after that shooting...the dude was driving around the country high on pot...I swear you said not to!). I cut way back since then. Until you make up your mind, Ima start burning some trees!
GeoPol - Fred Reed is one out of the box; less directly relevant to markets, of course, but required reading for anyone who wants to imbibe good sense from teh interwebs - what he wrote about aircraft carriers a month or so ago was awesome (and not just because it agreed with my prejudices).
Cheerio
GT
Fred is obviously a War Nerd reader.
@Booger Smoot - War Nerd (Gary Brecher) and William S Lind, if I'm not mistaken... although Fred has a wealth of personal background both in Muddy Paddies and around Foggy Bottom.
Lind is especially good on theory, but WarNerd's knowledge is more compendious. I often go to the arhives of the (now defunct) Exile in search of an old WN column (or one of Vlad Kalashnikov's rants if I need cheering up).
I had to knuckle smack a cop in Acapulco, bitch tried to take my funny money.
CB the Faber video and this one by Zulauf have my vote for 2 best so far this year...
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/5/28_Felix_Zulauf.html
I watched this Faber video a few days ago when someone linked it in one of the comments. Faber knows what he is talking about, but from a traders [which I am not] perspective the lack of him setting any time-frame to his "predictions" is a little disadvantageous to his calls. Most of the stuff [sans his bullishness on Asia [China especially]] he said has come to fruition. Thanks for the link. Its almost 6 am here, and there isn't much to do, so this will help kill me some time [if nothing else].
Timing is not my forte either Cheeky B.
But, I go with Faber re his warnings for us. I have taken High Potentate Chumbawamba's (as well as Gordon_Gekko's) advice and bought gold. Ammo too. Next up: storing food.
As a condo dweller, I have to hope "Mad Max" doesn't happen when TSHTF.
Think Hormel canned products my friend...unlimited shelf life...and very cheap.
You can still get plenty of reasonably fresh "surplus" MRE's. An entire day's calorie count for an average adult in one bag - and they taste pretty good if you're hungry enough. Nice long shelf life, too.
Signed, fellow condo-dweller
To say this delicately, be sure to have other food on hand besides MREs. Your, er, system, if you eat them exclusively, could back up dangerously and result in a dramatic blowout event. Ask soldiers who have had to eat them exclusively, baaad business that. I have tried to get foods I rotate and work into my regular diet. Won't shock the system so bad if TSHTF.
MRE's are irradiated. They'll give you stomach cancer.
MREs aren't healthy for you long term, the packaging is a huge amt of trash that will pile up outside your apt (telling neighbors--hey! that asshole's got food!), and the air inside takes up valuable space (esp. if you're in a condo).
Short recommendation from me to you? Stacks and stacks of Ensure Plus, some corned beef, and a good water filter with two receptables. One marked "Post-filtration--drink me" and one marked "Pre-filtration--pee into this".
Yes I posted it and I loved it and will watch it again and again it was much better than Cats!
And here is something from King World News:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/6/7_Mai...
And
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/6/7_Joh...
CB...I am not into timing, don't own stocks...last one I owned was GE back in 04.
Been buying gold since 68...back then a double eagle with little or no numismatic value could be had for ~ $60. As Faber is fond of saying 'the price might vary but the weight is the same'. I never believed in fiat and I suppose that came from my grandfather. He left me a stack of Confederate bonds and currency from the N.O. mint. Gold stays in the family and we use fiat for taxes, utilities, etc...bad money drives out good. Hope you are feeling better.
btw, thanks for the futures updates, I check them daily and I enjoy reading your posts.
Faber is a machine sent back in time to kill the Central Banks.
http://www.youtube.com/watch?v=QKF-tOtK6nw&feature=fvst
LOL
What model?
Agreed in spades, Cheeky; the only podcasts I ever used to listen to back in the day (circa 2001/02) were Faber and Steve Roach of Morgan Stanley.
I remember one Faber-ism in particular, which went something like -
I know, I have not done the phoneticrendition very well - but in fact I do an EXCELLENT impersonation of Faber (no ponytail though - if I was going bald I would go bald: no pony tail, no Netan-Yahoo combover... both are signs of insecurity, the latter being the worst thing a man can do short of a bad toupee).
Faber was Dr Doom to us oldies (who read Nassim Taleb's "Fooled by Randomness" in hardback when it FIRST came out) when Roubini was unheard of and when Bill Bonner's "Daily Reckoning" was crazy enough to permit nutjobs like me to write for it.
Cheerio
GT
+1... Bill Bonner is one of the best scribblers on the internet. I envy his writing skills and style. He is also very savvy and gets his thoughts across in a laid back manner. Still on my daily must read list.
He writes very well, although I confess that I stopped reading DR religiously once I stopped writing for DR (my own fault - a story that to this day causes me embarrassment: I asked to be the Antipodean end of the DR team, just as I got struck with Chronic Fatigue, which until that time I thought was mostly psychosomatic in sufferers... it's not).
To me, the most elegant summary-forecast ever written was written by Bill Bonner in (roughly) 2001, describing an upcoming lost decade (or worse)... I never cut and paste it (because I can't find it), and can never remember it verbatim, but it went something like:
Between Bonner, John Hussman, TD/ZH and Faber, investors have no excuse for making dumb decisions. And yet they make them with monotonous (and profitable, for sensible contrarians) regularity.
Cheers
GT
That Bill Bonner guy was the fellow who announce that SPX at 700 was a buy?
He seems to be the fellow who, under all conditions, reminds you to keep massaging yourself for profit. That advice is difficult to trade.
Faber was Dr Doom to us oldies
I didn't think I could be alone in that...
i think the coolness comes out @ 28:05
"Faber is not only a genius when it comes to finance; but he is also one cool dude human-wise."
I suspect it's because Marc understands dimininshing returns on education. Those who study only one subject area like finance suffer diminishing returns on their time the more time they study. But by studying, and experiencing, diverse subjects you are able to integrate disperse concepts, and end up with a 2+2=5 phenomenom.
Even if you think you've ovedosed on Faber, trust me, this is worth watching.
Is he still bullish on Japan?
Thanks for this.
Bottom line:
This shithouse is gonna go up in flames;
Be your own central bank and hold physical gold.
Even when a genius such as Faber can reduce it to such simple, easy to understand terms, the worlds traders will continue to gnash their teeth.
Raise your hands if you own physical gold....
Yo! I do, and I want more! More and now!
Hands up all around at this end. And happy about it. "Price" is no object.
Actually, I intended that as a rhetorical question, as in Faber asks a room of 300 traders, and only a couple raise their hands. I didn't phrase it well.
Point being, even as it seems so obvious, and has for quite some time to some of us, gold is definitely not a crowded trade, and when it does become one, it will be crowded in exactly the same way as lifeboats on the Titanic.
And there weren't enough of those, either.
It's only too big to sink until it sinks. Still a bit of deckchair rearranging going on, I see.
If you have loved ones who don't understand what gold is, and why they should consider some, this thread...
Aristotle on Gold
.... may make good reading. It has for mine.
Amen... brother!!!
just YO! From Biloxi Blues...
Better yet, if you want to be real doom and gloom about where this economy is heading......hold/own whatever you think your neighbors will want. Nuinut, if you came at me with those gold bars for my food, high-end alcohol and ganja, I'd laugh dem gold bars off!
What would I do with all that neanderthal metal? Absolutely not a God-damn thing! So if you think gold is the answer......better re-think rationally.
What will I do with all my top shelf......hmmmm.....get smashed and laugh at all the misfortuned, get the munchies and eat into my food storage, hold parties cause I can, Trade for whatever, con daughters, con wives, eat like a king, sit by the pool or beach just chillen and enjoying the time off!
Buy everything you might "want" now. If Bernanke is saying the Economy is on track.....you might have 3 or 4 days! Just like when he said we had a resilient Economy......back in July of 08'!
monstoricites >> monstrosities.
It's way late and you have no editor, except us. So we provide.
this was great. i've never heard him give a lecture. was awesome to hear him speak in non sound bite form.
Faber has been long term bearish about the American economy for a number of years and continues to be so. He concluded his June 2008 newsletter with the following mock quote:
Yes, because as we all know, absolutely nothing of value is manufactured in the US anymore...
Are you really this stupid? Is anyone??
Save the hyperbole, bud.
We've still got a lot of farming, software, uhm, I'm trying to think of stuff. Someone help this poor guy out.
lots of fresh water.
We got Hollywood, baby.
Yeah, we got Hollywood but other than the Coen brothers who is making films worth watching?
Most of the crap is fantasy, car crashes or gunfights...damn few actors or directors or editors, or writers...mostly not worth watching.
We have the best Intellectual Property laws on the planet, and our Media and Entertainment business is worth hundreds of Billions. A huge majority of those hundreds of Billions are being lost to piracy of Digital Media and as that issue is now being resolved, there is a reason to believe that the US can be a Global magnet for creativity. Tax incentives for taking 18-wheelers off diesel foreign crude and running them on Domestic CNG can cut our OPEC crude consumption by one-half in 5 years as in Boone Pickens's analysis. It's only over when you say it is. And, not for nothing, but the answer to "Just don't call me 'late for dinner!'" is "OK, shit for brains".
So you're basing your hopes for recovery on the government's ability to force people to obey IP laws? That's faulty on at least 3 levels:
1. government's ability - Getting less and less effective as time wears on.
2. to force people to obey - Won't play too well with a growing portion of the population.
3. IP laws - a legally protected monopoly on the use of ideas and information. This is a dying paradigm that stifles creativity and competition. The debate is interesting, but the writing is on the wall (and it's not copy-protected).
...Re. selective tax incentive programs: Unintended consequences are guaranteed, T-Bone endorsement or not. Why not focus instead on eliminating government subsidization of oil and transportation industries (or any industry, for that matter), and regulatory capture related thereto?
The government has shaped, deformed, distorted, and bastardized the economy into what it is today. What makes you think they can fix it with more 'tweaking'? If you want to have some hope for the future (i.e. in the next go-round, because this one's done for, whether you say it is or not), train your sights on getting the government out of the way.
Not so fast and faulty. We have well-established and robust copyright and patent law that are in full effect. Dolby Labs, Qualcomm get paid per device. Their treasure is not regularly plundered and distributed to eyeballs (as in digital media) who they charge for their delivery of other's expensively created content, yet deny payment to the content-providers. The pipes are not in control any longer as they were a decade ago. A secure copy management system will regulate this commerce as the Copyright Law , Chapter 10 so defines. The copyright and patent laws are designed to provide disclosure rather than obfuscation and advance, not deny, future creativity. Copy protection can be metered as purchased as the content-provider so defines. Point #3 is completely upside-down; you may choose to reconsider.
There is a huge reason why we have not shut down the 200 Billion spigot to foreign crude providers and left domestic or N.A. natty gas in the can: the blowback/payday is the hugest financial force on the planet that keeps our boys out there protecting our lifeline (= their payday) The tide will turn when XOM and RDSa complete their acquisition of XTO and East Resources and another chips away at CHK reserves and so on..then the Congress will be shown the new light. You are not entitled to your own facts, but you are entitled to your opinion which prove your gloom and doom scenario. You are welcome to purchase guns and ammo but lay up plenty of no-doz when the first shot is fired. I'm getting longer IP.
Marlboros, tanks and missiles, GM foods.
We make Japanese trucks.
Let's not forget, the military industrial complex is still alive and kicking.
FYI, the third largest economy in the world is the US manufacturing sector. And before I hear the shit about not believing the government statistics, I refer you to the China-Comms who apparently have GDP accounting down to an exact science seeing that they never have to revise anything, have it out mere days after a quarter, and always hit their targets. God, if only we could all be like the Great Mao (maybe that's part of the problem; people over there don't have to worry about gods...)
porn!
We excel in the following industries: BS, malarkey, hokum and balderdash. Plus nobody rivals us at WMD.
Farming. You can stop right there. The USA is a grain/food exporter -- and when it comes to agricultural technologies, we own.
Water and food are increasingly scarce globally. Food tends to get lost in the shuffle during boom times (it's a boring investment), but when the shtf, all those government agricultural subsidies suddenly make massive economic and strategic sense.
China is a rice importer, and has a scarcity of fresh water. (Good luck with that fellas!)
Guns & Ammo
Deadly weapons killing thousands of innocent people daily. Also the space shuttle that can be used in war after going bankrupcy.
Hey, Muir I left you a response under the ABX, CMBX article in which the question of "20% deterioration in the ABX.HE.AAA collateral in May" came up.
Here you go; I hope this will manage to clear some things.
Sorry guys for diverging the thread with this, but I want to clear this misunderstanding.
Thanks cheeky!!!
hahaha, and he talked about going to Pattaya at the start of the talk. Pattaya is a nice place though, lots of golf courses and beaches.
He has looked closely and assessed Detroit.
We have screwed ourselves with nonsense.
I'm still going with Faber over ZH on his general thesis regarding Asian markets.
the american economy produces a lot of zit cream .
for the young Keynesian
LOL +5000 by June
If your still up cheeky, what do you think of this (below). It's a response i wrote to a previous post from Econophile. Anyone else who wants to comment also.
I personally like Faber very much and believe his material is critical in our appraisal of the economic future. As Tyler said, this was a "must watch presentation."
But I can’t help but be disappointed in all the economists and investors who criticize the Federal Reserve as if it were a legitimate body making mistakes on the road to good intentions. The fact is, the Fed is a private, secret, all-powerful banking cartel that knows exactly what it is doing every single day. If it is the selector of winners and losers, then a handful of big banks who own the Fed and their key officials are the winners and the American people and their former economic freedom and their once great nation are the losers.
It’s an obscene picture; a bigger story than Faber portrays. Because of the Federal Reserve’s policies, its owners have become the most obscenely wealthy and most powerful men in the world—taking away billions and billions and billions, everyday. At the same time, these policies have reduced many Americans to Third World penury. And I don’t call this “unintended consequences.”
In short, this is no longer some kind of academic argument.
The political system, democracy, that nobody can say no in America, caused all these financial disasters. Interest groups drive policy makers to decide on shortterm cure. Voters want to be given chances to stay "weathy" for a few more years because they face the realities. Group decision always come up with short term cure, as majority of people are shortsighted. Good decisions sometimes are made when there are powerfu leaders and authoritative political system. It is happening in China now. Of course, if chairman mao are in power, it would be a different story.
"The fact is, the Fed is a private, secret, all-powerful banking cartel that knows exactly what it is doing every single day."
I agree 100%, JR! Back in '06-'07, I was infuriated with the apparent stupidity of the FED and the government economic policies in general. Finally it dawned on me that they are not stupid at all, and in fact are very much aware of the consequences of their actions. Policy consequences that beggar large sects of the population are not necessarily, 'unintended consequences.' US history has shown repeatedly that policy makers in the US are perfectly willing to sacrifice the well being of the many for the profit of a few or even at times, the good of the country.
I have said this before in this forum, more than once, but I believe it is an investment mistake to believe Bernanke is stupid or reckless. Much better to believe he has obvious agendas as well as hidden agendas, the latter usually feeding the common misconception, that he is stupid.
The US is a global, 'player,' in competition with many countries around the world. It is not difficult to imagine there might be times when US economic policies are crafted as a weapon, rather than as a means to enrich her citizens.
Coming from a military Intelligence background, I have seen first hand how easily the US manipulates information in the media both domestic and foreign. I would say, the media gets about half the information correct on any given day when it comes to US policy and intentions. So, with that percentage in mind, it is difficult for me to be so negative about Bernanke, when I feel I am missing half the story. He could very well be an idiot, but he is just one of the FED governors who dictate economic policies. It's not as if he is single handedly decides economic policy for the world. If you believe that, then you probably believe Obama is omnipotent and runs the US government single handedly.
Investing is difficult. Information is king. Making assumptions and allocating resources based on false premises can be disastrous. We all know this, but emotions can interfere with our best intentions at any time. I DO NOT believe the FED is stupid or inept. Of course I could be wrong, but since I don't have ALL the facts and never will be privy to internal machinations of GLOBAL U.S. economic policy, I simply try to diversify in a way that will enable me to KEEP investing, no matter the outcome of those policies. My investing mantra, Avoid Risk and Preserve Capital, has seen me through in the past, the present, and will enable me and my descendants to prosper in the future.
I'm with you in agreeing that Bernanke is not stupid.
However consider that he has decided to accept a job that is supposed to support an unworkable system from the foundation. Just because it has worked for 50 years does not prove that it really is sound. Now, though, he is the provider in chief that has to make sure it continues, no matter what he may see as failures in the beliefs. When the failure actually is effective, it will be painful. Would you like to visit the dentist today or put it off for a year or two?
Just like in Godfather I.."It was the FED the whole time."
They fix all problems for their Members with credit=cash written against the debt of the US people..but only the Members earn the interest, and the people pay it.
Nice deal if your name is Rothschild..forums, macroeconomics vide infra
I gotta say something about all this Keynes junking. Keynes gets a bad rap.
Keynianism is the Atkins Diet of economic policy: few people remember all the components, and fewer still have the discipline to make it work.
Yeah, deficit spending in times of recession was part of his prescription. Governments love this.
But surplus accumulation in boom times was also part of his prescription (IIRC). Governments hate this.
Spending yourself into utter insolvency was never his idea. (Wm. Buiter wrote an FT column 'bout a year ago to this effect).
Some people seem to think the Atkins diet allowed you to eat bacon cheesburgers and get thin. Cheeseburgers were indeed part of it - but most who tried it ate the bun and the fries and the shake too, and just got clogged and fat.
Tantric sex is a way to enlightenment - but most who try it end up diseased and dissipated. (Or at best, with a big grin on their face, but no enlightenment).
Keynesianism is just counter-cyclical policy, and counter-cyclic strategy is completely valid - see, e.g. control theory. It takes discipline to pursue counter-cyclical policy - discipline which may be structurally impossible for modern liberal democracies.
please on Keynesian counter cyclical policy.
this policy is the most pernicious and and wealth destroying economic culture ,
it is the cause of poverty, war, unemployment , suffering and misery.. gives the power to undermine the labor and division of labor attempts of productivity into the few hands of the fed and central banks
just look out at the wars . killing . destruction of the wealth of nations ,
this is a Keynesian poison mixed with gruel program .
a failed policy for many years .. and getting worse .. how any one with a scintilla of of experience and understanding would attempt to glorify and try to make a dead man walking policy into peaches and cream is deluded
It also presupposes that 'cycles' are somehow organically economy-wide and significant enough to warrant a policy of countercyclic strategy. Which I would suggest is not necessarily the case, especially in a free market economy using (market determined) solid currency.
If I know there's going to be some spending coming up, down the road, that will tend to influence my actions vis-a-vis growth and contraction. Even if it's limited to recessions, government spending to 'solve' or 'save' the economy is still a type of moral hazard.
You've cleary never actually read Keynes. It's OK, most Keynsians haven't either, as it is gibberish from start to end and the myth is much more palatable to those who've pissed their intemellectual life away as an ebubblemist. However, we can easily use your statement to point out a rather obvious flaw in generally accepted Keynsian nonsence.
"deficit spending in times of recession was part of his prescription....But surplus accumulation in boom times was also part of his prescription (IIRC)."
Well, for starters, the second bit is just sort of false. And second, just on the face of the statements, either one or the other MUST be false. If you saved during a boom, you would need only to consume savings in a recession. Debt would be unnecessary. The converse is also true. Further, of course, we MUST deal with the implicit stupidity that entrepreneurs, businessmen, and the average person some how save "too much" during a recession, but the same flawed human beings (let alone non-same human beings that occupy government) when blessed by their appointment to government office know precisely the rate of savings in a boom such that it is not "too much" to eviserate the private formation of capital.
But enough on such inanities. The real issue must lead us to look at "the economy" as a structure of human association that transmits information and allocates resources ala Hayek. Now, during a credit (ponzi, counterfeit money) boom, the production structure gets mal-allocated. Thus we have both large masses of human and physical capital devoted to, say, building, buying, remodling, selling and otherwise diddling with houses.
The Keynsian response to this government indueced failure (via the banking syhstem) is for the government to seize (from whatever source) funds and "spend" them to "kick" start the slumping demand. Thus, we would have government subsidize and spend into the mal-allocated structure to rekindle the activity that was so recently exposed to be, well, wasteful. This, of course leads to even greater waste of both human capital (as more of workers lifetimes are wasted in a non-economic activity) and physical capital (more mcmansions being built and left essentially empty).
Of course, this is precisely what government has done in the recent depression, and, low and behold it has failed miserably. As it did in the 30's as well. As it did in the 70's. As it must do, due to the information problems that Hayek went at great lengths to describe in the 20's and 30's.
Anywho, off the soap box.
Cheers,
Only "just sort of false"? Is that a roundabout way of saying "basically right"? ;)
What I'm saying is that I don't think Keynes can be quoted anywhere as stating that government debt may grow without bound (as a percent of GDP). Do you claim that is what he said?
And no, I've not read Keynes, but when someone like Buiter (way to my left) claims even Keynes had his limits with respect to deficit spending, I believe him (sorry, wish I had the link, it was some time ago).
Look, the surplus accumulation I'm talking about is simply the opposite of deficit - the fact that you run a surplus in any given year just means you pay down the debt you ran up in the previous recession. So there's no math or accounting identity violation at all in what I said.
Look. I'm not a Keynes fanboy. Neither am I an Austrian fanboy. The vocabulary you sport indicates you're substantially bought in to the Austrian thing - awesome.
I'd observe that in the real world, there were plenty of eras of Gold. Hard money did not prevent boom-bust, war, or herpes, brought no panaceas or ponies. Every gold (/silver/bronze/copper) standard ended in debasement, war, and misery - see, e.g., the Roman crisis of the third century.
And if you claim "those weren't pure systems" or there was "interference", I'd say you're on your way to creating an unfalsifyable proposition - where every failure of your hypothesis is attributed to insufficiently suitable prior condition, or some exogenous crisis (in itself an admission of a lack of resiliance).
In short, any system of government powerful enough to effect the kind of free market and hard money that would satisfy the Austrians would be too strong to avoid degradation into tyranny (humans being such as they are).
So the whole "Keynes/Hayek/Sucks/Rocks" thing is utterly uncompelling to me - don't misunderstand, I've don't begrudge the Austrians their insights, and I'm not about to endorse Paul Krugman - but the absolute and unqualified prescriptive rhetoric eminating from some of the Austrian proponents I find, well, unpersuasive in light of historical reality. At best.
Cheers...
i would like to note a bit of disagreement.
The problem is that the government in this case has not actually siezed anything of mine to date, as described in the hypothetical. It has been painless.
But they have actually used identity theft to increase my obligations as I am someday toing to have to fork over the money the got. used to pay my neighbor's mortgage. And until it is repaid by me or another taxpayer, we will have to pony up the interest bill. Of course those who pay no taxes could care less about what my increasing obligations my be. Hello Greece.
. . . you too.
Keynes was a fag, its on wiki.
Keynes has proven mathematically not to work by the Austrian school
The biggest problem with Keynes is it ignores demographics and assumes uniform population growth thus a continuing growing taxable worker population. It doesn't take into account spikes in retirement age, and other squirrely factors that are part of simple chaos of life. Uniform economic cycles just don't occur..there is always some peice of the puzzle that is naturally out of whack.
Biggest problem with Keynes is the premise that bureaucrats will do the 'right thing' in regards to adding and reducing the money supply.
:-)
I got my weekly dose of extreme negativity...and on a monday too, this should carry me through to Friday.
Not allowed!! Be positive !!
Jack us some 11th-hour volume in a cup, dood.
so lets see ..if i get it right...the relationship between equity market and the strength of the dollar is a reverse one???
learn new things every time i come to zh,,,
Equities could pop back up. Really, I don't think anyone knows. The trouble is that a weakening dollar fucks over most US corporations, as they're set up to import both goods and labor. Plus, most of our surviving megacorps are heavy in cash with little to invest it on profitably.
Plus, when investors get scared, they barf equities. Goldman getting investigated, BP blowing up, and the global political situation entering a tailspin make people nervous as hell.
Inflation fucks up price signals.
All your currency hedges are busy being monkey hammered. Please call back when you got some gold.
Marc Faber Rocks!
Faber provides many warnings and a good insight, but investing is a dollar contingent event.
Without a currency solution I am not investing in EM that are effectively commodity plays.
I also think he should quit talking about war and such stuff. What does he know of Chinese subs? He may know, but it makes him sound dumb.
It's just a note, not the focus. It's part of risk analysis.
When the mises institute holds a seminar or circle within a few hours of you, go. I've been to several and never left disappointed in anyone other than myself for being such a moron. I always leave feeling like there's just so much more to read and consider. Their circles are actually for businessmen and women, not just academics. And though faber may be a doomer, the general feeling is one of hope. And just because they believe in the message and enjoy the debate, they post everything on their site within hours.
I will forward this article to him. Pretty sure he will have a good read. Thanks for sharing!
Degree Program
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PhD Degree
Faber is a survivor. No matter how exact his claims will be, he will survive.
If wrong, he will still act as a reference.
Guy was big on Zimbabwe style. The US government has gone Zimbabwe style. The USD will go under following that madness.
Result: the USD has not gone under. It might even be strengthening.
Total fluke on this one.
But still, the guy is up. Still invited everywhere to pour his comments, no matter how wrong they can be. Never questioned on his past failed claims. Always speaking as he was right.
This guy is no opposition. This guy is part of the business.
One growing issue is that people do not want to buy a factual analysis. They want a fictional analysis that suits their tastes and needs.
The US government could not go with an Iraq empty of WMDs. It did not serve the best interests of the US people. Then they went with that Iraq full of WMDs fictional story.
Slight difference: they admitted later there were no WMDs (maybe because it was a non reversible situation)
What facts do you have, that suggest the dollar is not headed for collapse? How strong do you think it is? How many more oil and gas well explosions will it withstand? What if a year's worth of crops are decimated when Katla finally blows? And where is the money going to come from, to pay the US debt? (Or even just to service it. Never mind the unfunded liabilities...)
All currencies (including gold based currencies) fail.
Calling for the collapse of the USD is like calling for the death of a person.
You dont know when but you know for sure it will happen.
Moot point.
At present point, the focus should be on providing evidences that the USD collapse is near (lets say a term of five years), not providing evidences it wont happen in the same term.
That is the way it is at present times.
Debt will be naturally eliminated with the fall of the mass production capability.
What we are through is a vast speculative move at the world scale.
You got in debt what everything was still plentiful (and therefore cheaper) and you get rid of debt when everything is scarce (and therefore more expensive)
There are some who have said the collapse was due 10 years ago, so it may be that we are talking about the probability of an 85 year old person dying here.
At any rate, the dollar is no spring chicken...it has seen better days, and its resilience is very limited. A sufficiently big shock to the system could kill it.
Who can tell when the collapse will happen? Faber cannot answer this question. But he pointed out the trend, and what is going to happen in future. Nothing wrong. Somebody don't even want to believe it.
How would the dollar values respond it someone in the US developes a one pill cure for cancer?
What if someone found a way to convert sunlight into oil at $1.00 a bbl?
What if a 6 Bln bbl oil reserve was discovered in Illinois?
What facts do you have to prove that these could absolutely not happen?
..what if we woke up and it was all a bad dream?
its about as likely..
The issue of Iraq WMD will be debated until it is proved in years to come with the collapse of the Syrian dictatorship. In the mean time, this may help with your understanding:
http://pajamasmedia.com/blog/satellite-photos-support-testimony-that-iraqi-wmd-went-to-syria/
Meh. The WMD in Iraq were a mirage. The whole operation was a test for US-Chinese relations. The US will bleed now to secure energy exports for China so they don't consider expansionary efforts in the Middle East to do it theirselves.
The only clear and undeniable thing he may claim is that
Gold is forever a Metal.
Say...uh...what's with all the vertical lines I'm seeing on the gold chart at the moment.
Check out if leases are expiring . That might be one of the reasons. Maybe some HF [or even Phibro] borrowed in hope that gold will continue to go down [or maybe that it was overbought or something like that] and have gone short via a 1 month [or a 15 day] lease and now need to cover their bet. That could be one of the reasons. I dont know what the volume is, but this price upswing can not be generated simply by going long. No way.
I read the Bloomberg site headlines for chuckles because they attribute asset price movements to whatever fits their agenda of the moment...
This one is from today, about 6am...
"Stocks, Pound Drop on U.K. Debt Concern; Futures Rise, Gold Reaches Record "
Gold is mentioned in one sentence...'Gold advanced as much as $11.86, or 1 percent, to a record $1,252.11 an ounce.'
IIRC gold for August delivery is ~ $12.54 oz.
Honestly, this is the right timming for Faber and Schiff to appear again. I think they are all right about the economy but timming is crucial to survive these markets. If you repeat the same stuff on and on, you will be eventually be right. I recall Schiff's videos from early 2000 talking about same thing. If you recall 2008/9 if you listened to them when we were at the 666 level, you'd missed the rally. Just get back to early 2010, you will find Mr. Roubini saying there were no risk of double dip. Now you can find a massive amount of articles saing it is very likely.
I agree with most of their views, but they make money on these speechs, and not trading.
This speech shows me that we are a couple of weeks from a bounce on this downtrend.
"Just get back to early 2010, you will find Mr. Roubini saying there were no risk of double dip."
He said there were strong signs that it was unlikely we were to see a double dip. He didn't rule it out.
He still has to account for when central bankers are hush hush on the real problems ahead.
Now factor in US muni debt obligations. The second dip is going to be worse that the first.
Mr. Roubini...which ivory tower is he occupying? Big difference between the business man Faber and all those epidemics...er, academics.
He runs a private business and all that. Sure, it's just research subsidized by Columbia foundation donors, but it's not like they have any stake in the human behavoiral changes that result from Roubini's research.
I missed the rally...I bailed a few months prior to the crash.
Any day trader that believes they can consistently make money against this machinery, 'the new marketmakers', is delusional...
http://rajivsethi.blogspot.com/2010/06/new-market-makers.html
Faber is cool. Always stimulates thought - whether or not you agree with all his conclusions.
I have my doubts about the Emerging markets ( BRIC). Obviously theu have gone through a huge boom in the last 10 years - but their financial and political systems are in many cases fragile. It remains to be seen how they cope with a global , multi-year, slowdown/depression. Inflation is already a problem in places like India and starting to be a problem in China/South East Asia. China has a decade of excessive CAPX and commercial property development and the associated debts to deal with.
Of the large countries - the US has the best natural resources ( fresh water, farmland, energy) and ( OK yell at me now) and is aleader in many key new technologies ( biotech etc). Also politically the most stable ( its all relative- remember).
Let me preface this with, I really like Faber.
Only saw the first 35 mins, but all I got was "the fed will do X, with impunity." I agree that is the norm, but what about the trend? There is more and more light being cast... more and more effort to uncover their machinations... more and more effort to limit the ability of congress to "stimulate" the economy. (i realize the conceptual difference between monetary and fiscal policy, however I'm not sure that at this juncture there is a functional difference).
Seems to me that all of the political headwinds in this country are incredibly deflationary.
The other issue is whether we ever have a collective realization that deficit spending after a certain point has no beneficial effect. Rather, such spending becomes harmful in virtually all potential circumstances. In other words, the inflation hawks (and even many of the deflation monkeys) contend we will have (hyper)inflation behind deflation in the short/medium term. However, I think this view is conditioned upon substituting current sentiment for future sentiment in a changed world (the achilles heel of empathy). In short, I'm not convinced (fence sitter) that after we have a deflationary collapse predicated upon X policies (e.g. deficit spending), that we will somehow agree to contradict ourselves and magically print... In other words, it may simply be that our printing is a function of our ignorance and we may be getting a swift dose of reality in the very near future, whether we like it or not.
Well, all I can say is that was one hell of a video!
I wonder what he would say today after the G20 meeting and EU deciding to go down a different path than Bernake.
I highly recommend this video and want to say thank you to zerohedge.
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