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Marc Faber Warns The Fed "Will Never End Its Insane Policies"

Tyler Durden's picture




 

"The Fed will never end QE for good..." blasts Marc Faber, "they may do some cosmetic adjustments, but within a few years, [Fed] asset purchases will be substantially higher than they are today." There will be another weakening in the US economy, Faber warns, and "the Fed will argue it hasn't done enough and will do more... they have been irresponsible for 20 years."

Noting that investors should "not buy stocks but be in cash", the stunned CNBC anchor exclaims "How could you sit in cash when th emarket is on fire and interest rates are so low?" to which Faber blasts, "The market is not on fire, look at IBM, Cisco, and Intel - all lower than 2011; it's on fire if you are in Facebook or Twitter and not everyone owns them."

Use rallies to reduce exposure, he warns, "we will go up until it is over; and when it is over the drop will be larger than 20%"

 

 

On The Fed

"They will never end QE for good... they may do some cosmetic adjustments, but within a few years, [Fed] asset purchases will be substantially higher than they are today"

 

"Do not forget, the stock market and the so-called economic recovery will be in its 5th year... and at some point the economy will weaken again. The Fed will argue it hasn't done enough and will do more"

On Money Printing

If money printing can truly enrich the world, we should all be on the beach! Money printing does not create wealth but that's what the Fed thinks.

On the Fed's ability to spot bubbles,

Faber analogizes the members sat on top of a barrel of dynamite covered in gasoline and lighting a cigar..."and still not notice any danger."

 

"The members of the Fed have never worked a single day of their lives in business" and are blind to the real world impact of the policies.

 

"They have been irresponsible for at least 20 years," by creating one bubble after another and "bailing out institutions that should have failed."

On Stocks,

The S&P will not go up forever, and the happy times will not last forever; use any rally in the US markets from here to lighten up on long positions...

 

We have had a huge run off the lows in the US stock market, "we will go up until it is over; and when it is over the drop will be larger than 20%"

 

I don't think people should buy stocks - they should be in cash.

On Going To Cash,

The most-hated asset at the present time is cash

 

The stunned anchor exclaims "How could you sit in cash when th emarket is on fire and interest rates are so low?" to which Faber blasts,

 

"The market is not on fire, look at IBM, Cisco, and Intel - all lower than 2011; it's on fire if you are in Facebook or Twitter and not everyone owns them."

On the US economy,

In the US, the numbers may look better - but look at who publishes the numbers... globally the numbers have actually deteriorated.

On the Global Economy,

The global economy will not be strengthening next year, it will be weakening as all the Asian economies are slowing

On Gold and Gold Stocks,

Of all the asset claases that I look at, the most depressed is precious metals (and precious metals equities).

 

If money printing continues, which he sees as likely around the world as they "continue their insane policies", these will benefit the most.

 

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Tue, 12/17/2013 - 16:55 | 4255014 cougar_w
cougar_w's picture

A 20% correction seems wildly optimistic. Maybe 20% in the first 3 days, but it could become 60% before the last dog is hung.

Tue, 12/17/2013 - 16:58 | 4255031 gmrpeabody
gmrpeabody's picture

" before the last dog is hung"

Coug..., WTF...?

Tue, 12/17/2013 - 17:05 | 4255058 cougar_w
cougar_w's picture

It's a pirate/oldwest reference. One hangs we all hang ...

Tue, 12/17/2013 - 18:19 | 4255245 gmrpeabody
gmrpeabody's picture

Roger that...

Tue, 12/17/2013 - 18:46 | 4255298 SilverIsKing
SilverIsKing's picture

If the FED does a minimal taper for cosmetic purposes and a short while later, ramps it back up higher than it is today, can there be a valid threat of tapering from that point forward?

Of course not.

That is why there will be no taper.  Once they do it and reverse course, they'll no longer be able to use the threat of tapering to control things.

Tue, 12/17/2013 - 19:17 | 4255361 SRSrocco
SRSrocco's picture

Why wouldn't Faber be bullish on gold... Hell the U.S. had Record Gold Bullion Exports in the first nine months this year.

 

Record U.S. Gold Bullion Exports Head to Hong Kong & Switzerland

http://srsroccoreport.com/record-u-s-gold-bullion-exports-head-to-hong-k...

Tue, 12/17/2013 - 19:51 | 4255406 MillionDollarBogus_
MillionDollarBogus_'s picture

And bitcoin..??

Faber, don't forget about the crypto-currency...

Tue, 12/17/2013 - 20:29 | 4255494 frankTHE COIN
frankTHE COIN's picture

I think he is Bullish on Gold, going by his other interviews. Gold dropped with everything else in 2008 because people had to sell their winners to meet Margin Calls. Then it was the 1st one to stop falling and turned around and doubled in price from the previous high. Faber has stated in the past that $ 5000. - 9000 is not out of the question.

Tue, 12/17/2013 - 19:27 | 4255370 ZH Snob
ZH Snob's picture

what if there is a method to their insanity?  what if they not only know what they are doing but have actually been planning for it for years?  it is difficult for moral, sane people to consider this, so the first barrier to overcome is to realize these supposed respectable guardians of our wealth are completely immoral sociopaths.

Wed, 12/18/2013 - 07:27 | 4256440 Offthebeach
Offthebeach's picture

Marx planned out to the end of history. Hitler a thousand years. The 1700s Wigs & Federalist a couple of hundred.

Why wouldn't the Pharisees of FedReGov not be out a hundred years? Their paychecks, pensions , Gulfstream V are just dandy. And they get Corporate, big Labor, both big gov parties support. Plus we are their econ lab rats.

Tue, 12/17/2013 - 17:01 | 4255042 Unprepared
Unprepared's picture

Everybody knows that stock prices never go down. And the last 5 years are proof.

/snark off

Tue, 12/17/2013 - 17:27 | 4255118 Bananamerican
Bananamerican's picture

20% drop?
I think Faber just threw in the towel...

Tue, 12/17/2013 - 18:02 | 4255176 zaphod
zaphod's picture

I don't understand the logic of these guys. The basic arguement is since the FED is going to print to infinity that stock prices will crash.

Yes businesses and the economy will suffer, but if the FED prints to infinity then there will be a run out of dollars and into anything else (housing, PMs, land) and yes even equities.

Equities will go up in Faber's world, not down. They will go down but only in real terms, not nominal. Wasn't there just a ZH article this morning talking about the flight into equities?

In short, those who predict infinite printing and a dollar collapse, who are at the same time long cash (i.e. long the very USD that they predict will become worthless) make no sense to me.

The main play today is be diversified into various types of real assets with a balance of PMs, land, and yes certain classes of equities.

Tue, 12/17/2013 - 18:05 | 4255206 chubbar
chubbar's picture

I don't claim to speak for anyone but I've seen scenarios described where the market crash precipitates the rapid increase in money supply and that is what drives your above analysis. I think Faber is describing a defensive move and that diversification into the assets where you will get not only nominal but real gains is what is recommended even though they may take a dive with the market as well. Obviously cash will be king for a period of time should that scenario play out. Just my interpretation of what I thought I heard.

Tue, 12/17/2013 - 18:07 | 4255210 fonzannoon
fonzannoon's picture

A 20% drop? Maybe more? WTF is this guy talkin aboot? 

I thought he had a clue. a 20% drop after a 150% gain is just a nice calm correction. 

it looks like he and Hugh Hendry are the next Jeremy Siegels

Tue, 12/17/2013 - 19:02 | 4255330 CrashisOptimistic
CrashisOptimistic's picture

20% drop on a sunday night says the markets don't open monday.

 

Then another 20% on monday night and they don't open Tuesday either.

You can be down 60% like this before anyone can trade, other than insiders in Asia moving futures.

Tue, 12/17/2013 - 23:07 | 4255822 Cabreado
Cabreado's picture

Faber has no interest in making % predictions -- he is trying to make a greater point (which has nothing to do with % of anything) and, he is media-savvy too.

 

Wed, 12/18/2013 - 04:43 | 4256330 HardlyZero
HardlyZero's picture

Funny bone says HH and MF are both doing the same thing.  They figure if they go in with the wild side then the Kraken will finally be released.

They sly that way, and short all the way down.

Reverse psychology, which may work in a total fiat Bacchanalia.

Got Gold ?

Tue, 12/17/2013 - 23:54 | 4255933 scrappy
scrappy's picture

POMO POMO POMO - ã¯ã„ !  (YES in Japanese)

http://www.aviation-history.com/mitsubishi/zero.html

Tue, 12/17/2013 - 17:31 | 4255128 KnightTakesKing
KnightTakesKing's picture

Yes, 20% in the first few days or hours. I would not think about getting into the market until it loses 80% of it's current market value. I think the downside is an overall 90% "correction". 

Tue, 12/17/2013 - 21:20 | 4255607 drdolittle
drdolittle's picture

Could be, certainly if the banksters actually cause deflation (first by boom then by bust) but I think we're zimbabwe, melt up where the dow is 30k but a loaf of bread is $30. Rah rah rah on the sqwauk, most imbeciles can't do the math

Tue, 12/17/2013 - 21:45 | 4255655 rum_runner
rum_runner's picture

So may I assume you have a massive position in SH?

And, as a total aside, HTF do you guys keep track on replies to your comments?  ZH seems to have no such functionality.  Must I reload every thread I've posted in and scan through all comments to see if anybody has replied?

Fri, 12/20/2013 - 23:51 | 4266082 KnightTakesKing
KnightTakesKing's picture

Pretty much. ZH really needs to upgrade their software.

Tue, 12/17/2013 - 17:46 | 4255149 max2205
max2205's picture

Feeuck....if its only 20% then I am all in

Tue, 12/17/2013 - 17:50 | 4255160 max2205
max2205's picture

What mark meant to say is we'll be up 50 to 100% up from here so what's a 20% dip if thats the case

Tue, 12/17/2013 - 18:27 | 4255258 venturen
venturen's picture

unless JP Morgan, Goldman, Citibank and BOA disappear it is going to be more like 80%.....they have so leveraged up this cluster fuck....it is all going to disappear in vortex. Lehman was a warm up act....next time they are going to expect government rescue....but we are so levered, we won't be able to rescue. We are going to be driving 2013 cars in 2050 kind of like Cuba does.Obama is modeling us to be like Cuba!

Tue, 12/17/2013 - 22:55 | 4255794 Bobbyrib
Bobbyrib's picture

TARP 2 will happen. There is no way the banks do NOT get bailed out. Our elected sociopaths must make sure the TBTF are around forever.

Wed, 12/18/2013 - 07:40 | 4256447 Offthebeach
Offthebeach's picture

Agree.
they aren't even banks. They are FedGov national critical something or other. (The term escapes me.)
One of them goes when all of them go, and this present time isn't even stressing The Racket.
Civil War, a little bit,
Loved ever war since, including welfare/poverty war.

Tue, 12/17/2013 - 18:59 | 4255324 Mr Pink
Mr Pink's picture

Another day, another warning from Faber, another Hindenburg omen, another gold and silver smackdown, another blah blah blah...

Anyone else getting bored?

Tue, 12/17/2013 - 19:09 | 4255343 zaphod
zaphod's picture

Yes. The same thing over and over is getting boring.

There will be a SHTF moment, but nobody really knows when or how. What happens is just too dependent on central planning to predict. I am sure there are lots of rabbits to pull out of their hats to come.

Remember, they have the ability to change to rules, so anything is possible.

Tue, 12/17/2013 - 22:05 | 4255688 stocktivity
stocktivity's picture

It's all Bullshit!!!

Tue, 12/17/2013 - 22:51 | 4255781 Alternative
Alternative's picture

If I could spend my time in Thailand, I would also keep sending dire warnings to people who watch me on TV.

Tue, 12/17/2013 - 19:37 | 4255387 Papasmurf
Tue, 12/17/2013 - 20:08 | 4255444 vaft
vaft's picture

In one of his earlier interviews, he said there should be a 50% drop simply due to the re-election of Obama. Now it's merely a 20% drop when the entire game of musical chairs comes to an end? I think it's just about time for someone to resurrect the ghost of Irving Fisher and claim that the markets have reached a permanently high plateau.

Wed, 12/18/2013 - 10:55 | 4256982 fallout11
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St. Louis Fed reports 465% monetary inflation since mid 2009.
http://research.stlouisfed.org/fred2/series/BASE?cid=124

Next stop, Weimar.

Tue, 12/17/2013 - 16:54 | 4255018 alphamentalist
alphamentalist's picture

because bernanke

Wed, 12/18/2013 - 04:44 | 4256331 HardlyZero
HardlyZero's picture

Because Yellen won't let Bernanke pull out (too soon).

Tue, 12/17/2013 - 16:57 | 4255021 Gumbum
Gumbum's picture

"The Fed will never end QE"

If I had a quarter for everytime I've heard Marc saying that....

Tue, 12/17/2013 - 17:01 | 4255039 Oldballplayer
Oldballplayer's picture

Wait a second. Let me fire up the laser printer and I will print you some.

Tue, 12/17/2013 - 18:39 | 4255280 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

Don't be dissen quarters, there metal content is worth at least $.045.  Paper on the other hand....not so much.

Tue, 12/17/2013 - 21:48 | 4255662 ultraticum
ultraticum's picture

My quarters are worth over $3 bucks.  What year you holdin' there friend?

Wed, 12/18/2013 - 04:47 | 4256334 HardlyZero
HardlyZero's picture

New Sterling will be plastic (polymer).  Poor absorption and scratchy fiat.  But you will be able to stretch it some.

Plastic money has arrived.

Tue, 12/17/2013 - 18:20 | 4255243 jefferson32
jefferson32's picture

Well, the Fed hasn't stopped QE since Faber started saying it wouldn't, now has it? In fact he was similarly dismissed when nobody had started counting QEs yet.

Tue, 12/17/2013 - 22:48 | 4255773 Tall Tom
Tall Tom's picture

Gumbum...You wrote this?

"The Fed will never end QE"

If I had a quarter for everytime I've heard Marc saying that....

Well I do agree that sooner, or later, QE WILL STOP. Of course on that day THE US ECONOMY DIES. Of course the US Economy is a ZOMBIE Economy on Life Support.

 

Currency, liquidity, is analgous to Blood. Liquidity is the Lifeblood of any Economy.

 

QE is like a Transfusion of Blood,  a Transfusion of Liquidity. The problem is that the US Economy has suffered many Fatal Injuries due to an extravagant, reckless, and an imprudent Lifestyle. The surgeons (Federal Reserve Bankers) cannot repair the injuries as they are too numerous and systemic.

 

Everytime they sew a new suture many other aneurysms (Bubbles) form and are in imminent danger of bursting. The liquidity of QE has pooled into these aneurysms and does not circulate. The Circulatory System has failed and cannot contain the pressure. Very little of that QE Liquidity ever Circulates throughout the Organism (The US Economy) to provide the Nutrients and Oxygen to promote healthy growth and cellular function (a productive employment of the cells).  Thus cells will wither and, eventually, will die off as a result of starvation.

 

The US Economy, the organism, is bleeding to Death. Yes the surgeons can hang more Bags of Blood and pump it in as a vain attempt to maintain Blood Pressure.

 

But they will run out of Blood when the Blood Donors (the Creditors) see the futility of attempting to prop up a Zombie, that which is already a Walking Dead Man on Life Support.

 

Now some Organs are not as affected as others. The Body has responded by draining the lifeblood from the Muscles (the Workforce) to the vital Organs (the Heart and Respiratory Systems) for survival. This is a SHOCK REACTION that every organism does after suffering a catastrophic injury. It is an Instinctual and autonomic activity.

 

So the Heart (Government) and Respiratory System (Wall Street) may not currently be experiencing the same affects as the rest of the organism. Life may be good in the Beltway or in the Hamptons.

 

But the rest of the Nation is DYING. And when it succumbs so will Wall Street and the Government.

 

So they are hoping that a Taper on the Transfusion will serve to decrease the Blood Pressure and buy the surgeons a little more time.

 

But of course that will kill the patient as the predicamaent has degenerated from when the initial injuries happened.

 

Yes I want to see a taper. The organism must die as it is parasitical on the productive. Starve the Beast.

 

Tue, 12/17/2013 - 16:55 | 4255022 Al Huxley
Al Huxley's picture

I don't trust the miners - they're either the dumbest bunch on the planet, or they're working with the banks.  Either way, they're fucking garbage.  I'll take the metal on sale at this point.

Tue, 12/17/2013 - 17:03 | 4255043 Al Huxley
Al Huxley's picture

Nice to see there's still at least 2 true believers out there who still think the miners are going to come through in the end.

Tue, 12/17/2013 - 17:19 | 4255095 ParkAveFlasher
ParkAveFlasher's picture

I can't quit you, miners.  Seriously, why do not think they will come through? 

Tue, 12/17/2013 - 17:32 | 4255125 Al Huxley
Al Huxley's picture

Price of gold and silver will be held below production cost long enough to bankrupt the small ones and force the big ones to sell their futures to the banks.

Wed, 12/18/2013 - 04:49 | 4256338 HardlyZero
HardlyZero's picture

Its tough, they put their money in the ground, or the money goes away (no finance), or gets taxed.  And then they are captive to their governments.  If they mine it out too quickly its gone.  If they sit on it too long they lose their finanance.  The cost of doing nothing is expensive !   No answers just problems.

Wed, 12/18/2013 - 00:00 | 4255959 DeadFred
DeadFred's picture

Bankruptcy? Most of their loans were made by JPM, I think Jamie wants to own a bunch of small producers before they turn back towards $2000. But I'm a bit paranoid

Tue, 12/17/2013 - 17:19 | 4255106 Dr. Engali
Dr. Engali's picture

I'm with you on the miners. History has shown that when governments get desperate the will steal everything they can lay their grubby paws on.

Tue, 12/17/2013 - 17:18 | 4255100 chubbar
chubbar's picture

As someone who has made a lot of money and lost a lot of money on the miners over the past 10 years, I have to say that you have a point. I'll also admit that I'm completely baffled how they could have done what they have done the past couple of years. The only possible explanation that makes any sense is a concerted gov't effort to short sell these in order to keep investors away from them. Of course I'd say the same about physical as well. The fundamentals were/are absolutely astounding but yet no movement unless it's down. I am not comfortable with the idea of relying on conspiracy theories to explain all aspects of this market but I can't really think of anything that would take miners down 80% or so with the fundamentals we are seeing and given the movement of other unrelated stocks?

Tue, 12/17/2013 - 18:15 | 4255217 JenkinsLane
JenkinsLane's picture

The theory that the main reason for the fall in the miners is because of some type of government conspiracy to

short them is total and utter nonsense.No doubt they're being shorted by hedge funds, etc., but that's because

they deserve to be owing to rising costs, falling grades, falling PM prices, (which are manipulated),

rising capex, etc. Plus once the selling starts PM fund redemptions start and can snowball; Sprott's

funds haven gotten killed. Try these links for starters:

http://www.hindecapital.com/blog/message-to-all-gold-mining-ceos-a-gold-...

http://www.hindecapital.com/blog/gold-and-silver-mining-a-post-mortem-3/

If you want a no bullshit assessment of the sector I recommend you start reading Gary.

He's literally one of a handful of no-BS operators who covers the PM sphere:

http://biiwii.com/wordpress/

 

 


Tue, 12/17/2013 - 19:36 | 4255384 new game
new game's picture

started in on the miners and oilers 12-13 years ago - got out entirely 4 years ago and cashed the works thru 401 withdrawl/penalty shit stick tax b.s. never go back-gave some back on phys gold; cashed out 67 percent phys gold and moved to r.e. to enjoy day to day...fuck gold for now...

Tue, 12/17/2013 - 20:10 | 4255452 AngelEyes00
AngelEyes00's picture

"The only possible explanation that makes any sense is a concerted gov't effort to short sell these in order to keep investors away from them."

I agree chubbar.  It goes hand in hand with QE, otherwise USD tanks. 

 

Tue, 12/17/2013 - 18:56 | 4255320 joego1
joego1's picture

I think the Chinese have something to do with this manipulation. It May be something like "keep the gold coming or we blow the treasury thing up".

Tue, 12/17/2013 - 16:56 | 4255027 Spungo
Spungo's picture

Does anyone else read his comments with an accent?

Tue, 12/17/2013 - 17:02 | 4255050 Elliott Eldrich
Elliott Eldrich's picture

Vot azzent?

Tue, 12/17/2013 - 17:05 | 4255051 Unprepared
Unprepared's picture

Like "Moooney Prgrgrintin"

Tue, 12/17/2013 - 17:07 | 4255057 Finnman
Finnman's picture

I think I have European accent, is it ok?

Wed, 12/18/2013 - 04:54 | 4256342 HardlyZero
HardlyZero's picture

Its more accident than accent.

Tue, 12/17/2013 - 17:57 | 4255188 AGAU
AGAU's picture

Always, but I end up sounding like McBain.

http://www.youtube.com/watch?v=7vyANa71gvU

 

 

Tue, 12/17/2013 - 20:28 | 4255489 chump666
chump666's picture

They should do a full length movie, it would be off the scale.

"pee shooter" hahahahahaha

Wed, 12/18/2013 - 04:53 | 4256344 HardlyZero
HardlyZero's picture

A most interesting man.

Tue, 12/17/2013 - 18:03 | 4255202 Aknownymouse
Aknownymouse's picture

LOL. I ACTUALLY DO

Tue, 12/17/2013 - 22:40 | 4255754 Hulk
Hulk's picture

Yes, but the other voices in my head telling me to crush, kill and destroy bankers usually drown out the Faber accent...

Tue, 12/17/2013 - 17:01 | 4255040 reader2010
reader2010's picture

Just BTFD, that's the message. 

Tue, 12/17/2013 - 17:13 | 4255076 Spungo
Spungo's picture

One guy literally said that. He was hoping for a dip so he could go long. 

I mean he literally said buy the dip. He didn't swear on TV.

Tue, 12/17/2013 - 17:04 | 4255046 Westcoastliberal
Westcoastliberal's picture

I'll bet Faber really believes when this sucker blows it'll be a lot more than a paltry 20%....more like 80%.

The other wildcard we all need to start taking seriously is Fukushima.  3 reactors in a China Syndrome and we all know which way the wind blows. At the very least the entire West coast of the U.S. could be in very dire straits very soon.

Tue, 12/17/2013 - 17:10 | 4255068 cougar_w
cougar_w's picture

A mere 20% would represent a fabulous profit opportunity for those in cash near the bottom. So maybe it's what he's hoping for. Because an 80% drop would trigger a vast and rolling annihilation of all the money, debt and value in the entire world. So yeah, you can see where he's got his fingers crossed on this one.

Tue, 12/17/2013 - 19:29 | 4255378 WillyGroper
WillyGroper's picture

If that's the best way to rid us of the foul Pelosi & Feinswine----whatever, common good and all...

Tue, 12/17/2013 - 17:02 | 4255047 frankTHE COIN
frankTHE COIN's picture

" the drop will be larger tthan 20 pct. "....

He forgot to carry the 4.

Tue, 12/17/2013 - 17:46 | 4255154 max2205
max2205's picture

Remember that at down 20% qe will be 1 trillion per month....

Tue, 12/17/2013 - 17:02 | 4255048 Kirk2NCC1701
Kirk2NCC1701's picture

Debt ON!  Long Debt.

Plan, hedge, invest and allocate accordingly.

Tue, 12/17/2013 - 17:09 | 4255065 ZH11
ZH11's picture

I can't help feeling that what he's saying is sound enough but he'll be dead before any of the real changes happen so why doesn't he just cash in and go nuts for a few years.

He looks pretty debauched,  as most people who deal with money on a day-to-day basis do, and the germanic streak should get him into enough wild things to be done in 18 months max.

That way we'll also know he was 100% behind his own analysis.

 

Tue, 12/17/2013 - 17:21 | 4255110 astoriajoe
astoriajoe's picture

I remember one fairly recent interview where he was giving advice on vacationing in Thailand.

 

Tue, 12/17/2013 - 20:10 | 4255451 ZH11
ZH11's picture

Indeed, so do I.

That's it settled then;

Marc Faber (28th February 1946 - 30th July 2015)

Cause of Death : Rogue ping-pong ball ingestion

Tue, 12/17/2013 - 17:09 | 4255066 OldE_Ant
OldE_Ant's picture

lol.  last 20 years.  How about the last 100 - including the great depression?!  Yeah they were totally fucking things up even then.   If the FED was so great then why exactly did the great depression occur and last so long?

Because Easing or tightening only work for a short time and don't cure any systemic issues.

Tue, 12/17/2013 - 17:11 | 4255075 cougar_w
cougar_w's picture

Yeah I was wondering where he got that one. I was thinking at least 60 years but I'm good with 100 years and could be persuaded that 300 years is more appropriate.

But any way you measure it, this shit has become the longest running fraud in the entirety of human existence.

Tue, 12/17/2013 - 17:51 | 4255174 BeerMe
BeerMe's picture

Yep, they've been irresponsible for 100 years...to most Americans.  But they've been doing great transferring wealth to themselves.

Tue, 12/17/2013 - 17:09 | 4255069 moneybots
moneybots's picture

"the Fed will argue it hasn't done enough and will do more... they have been irresponsible for 20 years."

 

Multiply that by 5, for correct answer.

Tue, 12/17/2013 - 17:11 | 4255073 DirkDiggler11
DirkDiggler11's picture

I agree with most of what Faber spews out these days, but I'm sick of hearing from both Faber and Jimmy Rogers.

There is such a thing as over-exposure. Would it be possible for both Faber and Rogers to just shut the fuck up for a while with their purposely vague predictions that add no value and are no different than their last 400 interviews, all the while pimping their new books or a crappy investment service ?

Tue, 12/17/2013 - 17:11 | 4255074 ebworthen
ebworthen's picture

What would it take to get the S&P back to 666?

66% correction?

That's what we need.

Tue, 12/17/2013 - 17:53 | 4255182 corporatewhore
corporatewhore's picture

is that the beast?

Tue, 12/17/2013 - 20:10 | 4255446 the question
the question's picture

One hell of an observation

Tue, 12/17/2013 - 17:12 | 4255078 q99x2
q99x2's picture

Once the FED has all the wealth they can kill the last of us.

YeeeeeeeHaaaaaa.

Tue, 12/17/2013 - 17:17 | 4255079 sixsigma cygnus...
sixsigma cygnusatratus's picture

"...but it's the first that I think I've heard anybody say, that aside from taper talk, we're gonna see asset purchases, more of them on the table..."

She needs to drop the acting classes and start following ZH. 

Tue, 12/17/2013 - 17:18 | 4255097 Paracelsus
Paracelsus's picture

With automation the USA probably only needs about 50 million people to run this sucka.

All the rest of us are surplus,and you know how that goes.

Tue, 12/17/2013 - 18:32 | 4255274 YC2
YC2's picture

ha thats only 2-3 cities in china!  were free!  right?...

Tue, 12/17/2013 - 17:20 | 4255099 Its_the_economy...
Its_the_economy_stupid's picture

How 'bout Congress takes back the right to print the US currency, then pays off the banksters and other debtholders, then just prints to oblivion? What will THAT do for the price of commodities?

Tue, 12/17/2013 - 17:22 | 4255112 rwe2late
rwe2late's picture

This is all very interesting EXCEPT:

1) QE handouts can and do take many forms.
The unaudited Fed can cut one handout method while increasing another.

2) How believable is the $85B per month number anyhow?
The true monthly QE is likely closer to $200B per month.

http://www.marketoracle.co.uk/Article43438.html

 

Can the TBTF financials can ever stop their gravy train without causing the US financial/petrodollar/militarism racket immediate irreparable harm? Are they intending the biggest global "Shock Doctrine" coup ever?

Tue, 12/17/2013 - 17:26 | 4255116 jubber
jubber's picture

what figures have been getting better?

Tue, 12/17/2013 - 17:31 | 4255123 cougar_w
cougar_w's picture

Faber is correct; the Fed and other CB will not stop. Ever.

But this will end nevertheless.

Anyone can't resolve the paradox, consider this scenario; after the global economy has been sufficiently raped to render it toxic, people will have already moved on to other means of production, exchange and value creation. Local markets, barter, co-ops, workable communes, tribal potlatch exchanges. Those are just the ones we can imagine from current and past models. New models will emerge. There will be models based both on centralized authority and decentralized cooperation. Some based on regular aggregations of traders and others based on technology-mediate instant black markets. We cannot even imagine what people will come up with. We can only know for certain that they will.

We'll watch all these experiments come and go and stumble and eventually take off -- support some and deride others until we find a good mix of modalities -- all while the struggling CB and TBTF slip inexorably into irrelevance tweeking their inflation models and issuing propagandist manifestos for a global economy that has become simply an overlay on the only market that really exists; the one we made ourselves to solve our daily problems of production, distribution and investment.

At some point it is like they have their own religion complete with indecipherable incantations to dead gods and regular blood sacrifices. But who cares what they think by then? Nobody will need these hierophants of global finance nor their hand-waving and strange demands. We will go to their annual pageant parades to laugh at their funny hats and robes, while small children run along side giddy begging for candy.

Tue, 12/17/2013 - 18:23 | 4255253 joego1
joego1's picture

I agree with you to a large degree except I'm a little worried about where they will get the "regular blood sacrifices" from.

Tue, 12/17/2013 - 17:30 | 4255124 ChaosEquilibrium
ChaosEquilibrium's picture

20%....Gee Faber.....30% is due to FED directly? WTF

 

Add in the lower productivity, unemployment, growth, debt expansion is good for another 50% of FAIR VALUE!!!

 

Market should be priced approximately 80% below todays metrics.....and FALLING!

Tue, 12/17/2013 - 18:55 | 4255314 pavman
pavman's picture

BTFD!

Tue, 12/17/2013 - 17:30 | 4255126 moneybots
moneybots's picture

 

"Do not forget, the stock market and the so-called economic recovery will be in its 5th year... and at some point the economy will weaken again. The Fed will argue it hasn't done enough and will do more"

 

There is no such thing as enough.  Debt comes with interest.  Create more debt, more interest has to be paid back, than the debt that was created. 

The current FED has argued that the FED tightened too soon in the Great Depression.  There is no too soon.  QE1 was not ended too soon.  QE2 was not ended too soon and QEternity will not have ended too soon, when it does.  That which cannot continue, won't, regardless when it is ended.  If QE runs 20 years it will have ended too soon, to those devastated by its end.

Tue, 12/17/2013 - 17:36 | 4255138 CheapBastard
CheapBastard's picture

Western civilization will collapse if QE ends.

Tue, 12/17/2013 - 17:52 | 4255172 rp1
rp1's picture

I hate to say it, but hearing Marc say this makes me think they will.

Tue, 12/17/2013 - 17:53 | 4255177 thorgodofthunder
thorgodofthunder's picture

You know who buys gold?  Retail suckers who aren't sophisticated enough to understand that it was a hedge trade that they exited from last year. 

 

Are you a retail sucker?

Tue, 12/17/2013 - 18:41 | 4255290 fijisailor
fijisailor's picture

Yea buddy.  Everything is AOK.  Remove QE and let interest rates go back to their historical average or even much less.

Tue, 12/17/2013 - 18:50 | 4255307 ArrestBobRubin
ArrestBobRubin's picture

Well thanks for clearing up the identity of who buys gold! China, India, Russia and all other buyers are "retail suckers".

As the well known JP Morgan quote goes, "Gold is just a hedge trade, all else is debt".

How foolish gold buyers are compared to you.

Tue, 12/17/2013 - 17:55 | 4255184 SmittyinLA
SmittyinLA's picture

I'm with Dr Doom, I dumped my healthtech (short Obamacare) months ago and dug in on GDX & XOM for the long haul 

Wed, 12/18/2013 - 04:59 | 4256349 HardlyZero
HardlyZero's picture

Check out SLW and FNV, they fund/finance the miners, and pay some good royalties.

Tue, 12/17/2013 - 20:45 | 4255205 ToNYC
ToNYC's picture

As if the FED had Tenure or some such medieval station, but more likely will be removed kicking and screaming, not by or for its lack of trying to blow forever another signal of asset price improvement which is never considered = Inflation which, of course, is invisible to their blind eye.

Tue, 12/17/2013 - 18:10 | 4255212 SmittyinLA
SmittyinLA's picture

With the state dominant political ideology being "print and buy votes" I'm with Dr Doom

Tue, 12/17/2013 - 18:33 | 4255273 Hal n back
Hal n back's picture

Gold wil lbe nice to have, so wil food and energy. Better would be to be a family practice doctor or a baker  or butcher assuming the latter can get ingredients to make food--maybe a farmer.

 

Survival will be rather important and gold and silver will be used to barter with others for what you need but cannot make or get yourself. Kind of like how money came into exostence to begin with--just who started fiat currency anyway?  Blame it on Bush 2

 

 

Tue, 12/17/2013 - 18:43 | 4255296 fijisailor
fijisailor's picture

Taper is just a test of the average American memory.  Usually it is assumed that the sheeple can't remember anything from one election to the next.  Now they're testing to see if memory loss occurs in 3 months from one taper propaganda blitz to the next.  Taper will never happen.

Tue, 12/17/2013 - 20:30 | 4255498 Papasmurf
Papasmurf's picture

At this point we also have Republican's doing everything they can to crash the system so they can win the next election.  At the same time Dem's will risk post-election hyper-inflation just to be reelected.  Meanwhile the Fed is working hard to sweep all assets to the top and onto their balance sheet.  All forces are working against stability and recovery.

Tue, 12/17/2013 - 21:36 | 4255642 cougar_w
cougar_w's picture

All forces are working against stability and recovery

This is a critical observation, everyone needs to take note of this emergent reality and think carefully about the implications.

We are no longer operating within a rational system with rational actors; the situation is completely unhinged. We are probably witnessing the greatest disconnect from reality that the collective human race has ever seen. And this irrationality is risking the most important asset of the 21st century; global finances and the wealth of entire nations.

Mass psychosis. Life-threatening denial. Stockholm Syndrome. Compulsive lying. Our leaders and institutions are exhibiting the symptoms of a raging insanity.

Tue, 12/17/2013 - 18:46 | 4255297 chump666
chump666's picture

I like Marc Faber, but we got confusion from all points.  The crisis will come out of Asia and I would NOT be holding USDs, being a $ bull for such a long time the following wire reports are alarming:

*China inflows and stronger CNY play against USD

 

Tue, 12/17/2013 - 18:47 | 4255302 pavman
pavman's picture

Wow CNBC is even more obnoxious than last time I watched them...wtf is with all those distracting goose noises?!  I used to complain, then I just stopped watching.  All the distracting noises...its like CNBC is run by infants.

Tue, 12/17/2013 - 19:20 | 4255367 kurt
kurt's picture

the teenagers running the board have watched Minority Report one too many times.

the scheister running the show keeps saying "more flash!"

 

Tue, 12/17/2013 - 20:32 | 4255500 Papasmurf
Papasmurf's picture

Wow CNBC is even more obnoxious than last time .. . All the distracting noises...its like CNBC is run by infants.

That noise is your wealth being swept away by QE.

Tue, 12/17/2013 - 18:54 | 4255313 GetReady
GetReady's picture

Look at the inconsistencies in the arguments of the talking heads.

If things are so good why is the Fed still printing $85B per month? Why is the government still running up debt at $750B per year? Why did Detroit go bankrupt? Stockton?  Puerto Rico and Chicago on deck.

They deny that QE has blown a stock market bubble, but acknowledge the stock market will have a major correction with any taper.

They indicate Twitter and Facebook are solid investments with no earnings.

The world makes no sense where they live. I'll stick with Faber and fundamentals.

Tue, 12/17/2013 - 19:11 | 4255351 fijisailor
fijisailor's picture

The 10 year is pressing in on 3%.  Just give us a taper tomorrow so we can see where it goes after that.  Queue panic city.

Tue, 12/17/2013 - 19:15 | 4255357 fijisailor
fijisailor's picture

Anyone here think Bennie wants to take the political heat for a taper panic?  He wants to join Greenspan in retirement as God.

Tue, 12/17/2013 - 22:09 | 4255693 stocktivity
stocktivity's picture

Exactly....the market isn't going to crash on Benny's watch.

Tue, 12/17/2013 - 19:38 | 4255392 Freewheelin Franklin
Freewheelin Franklin's picture

Light the match. 

Tue, 12/17/2013 - 19:49 | 4255403 rsnoble
rsnoble's picture

Keeps going up and then drops 20%.

 

So DOW 20k -20% =16k.

Big fucking deal.

It's just a slo-mo trainwreck.  Unless there's war or it gets out of control stop wasting time worrying about.

Tue, 12/17/2013 - 23:53 | 4255929 jtz5
jtz5's picture

I agree. These guys keep saying 20%+ correction as the market continues higher. Eventually we will get the correction, but who frickin cares when it was up 25% in 2013 alone.

This shit will never end...

Tue, 12/17/2013 - 19:57 | 4255413 Fix It Again Timmy
Fix It Again Timmy's picture

Will zer be anything else, Sir?

Why, yes, my good man - MORE tapering......

Tue, 12/17/2013 - 20:07 | 4255431 falak pema
falak pema's picture

Consequences of this phrase : the FED will never end its Insanse policies...

It means the end of market capitalism in its current global and interwoven form. Insanity does lead to consequences.

Faber is the Homer of this age. Imagine how his gripping tail unfurls...

"As, Ten years down the road the WS structures will look like Detroit, their alogorithmic evolution stultified towards monopoly plays and execution of central plan dictats, a result of the same mindset : Imperial hubris. Emperors were known to eat garlic and toad's eyes (frog dish) to wash away the acidity of their nightly revelries.

Whatever the resurgence of capital mechanisms in other regions of the globe the pernicious persistence of cannibalistic capitalism in the Reserve stronghold, now gone totally Mussolinian in its functionings; of central and crony monopoly bend; psychorigid like a Roman potentate who thinks the world lies at his feet, as he nests his coterie of courtisans festing in Pompei; ends up with lead pipes clogging those underground big data centres like stale spaghetti in congealed deep freeze."

(that is straight from a Jules Verne novel remake to the centre of the earth where their dinosaurus fossils lie for the ages).

(Bunga Bunga Oligarchy is an ancient tradition that ends up in flames and its a repeat performance selling to full houses. This is not lost to a man with Faber's acumen.)

"Time for Captain Nemo to pull the plug. Anybody seen a Loch Ness monster in Manhattan harbour with a weird man wearing a naval jacket and a white rolled up collar?

That's the sign that Manhattan WS scions join the fish in a sleep to make Rip van Winkle jealous with envy."...

He deserves the Booker Prize of Nosterferus. 

 

 

Tue, 12/17/2013 - 22:21 | 4255721 The Heart
The Heart's picture

"He deserves the Booker Prize of Nosterferus."

And so do you Falak.

That was funny.

Were this only the standard of intelligent analysis and commentary among all the troops and souls on board, instead of the deviation from sanity that runs rampant in DC-wall st. (district of Criminals on wall street)(no comment about the clown minion puppets in the reputed halls of govt, other than they are all insane money-god worshiping CRIMINALS too!!!!)

Tue, 12/17/2013 - 20:12 | 4255456 q99x2
q99x2's picture

Give me a license to counterfeit and ask me to stop.

Give me a break why don't you.

Tue, 12/17/2013 - 20:26 | 4255491 Pickle Jar Bob
Pickle Jar Bob's picture

The fundamental problem with these people is their hypotheses are unfalsifiable.

 

If their policies fail, it was because there wasn't enough of it, never that the policy was bad.   Keynesians, Statists, and Progressives all suffer this.

 

Not being falsifiable is the key characteristic of a religion, not a science.

 

They will never change their ways because its an article of faith for them.  They are fiscal equivalent of the Evangelicals.

Tue, 12/17/2013 - 20:55 | 4255559 Shizzmoney
Shizzmoney's picture

Stocks can rise 4EVA like QE4EVA

But that won't mean shit when the numbers dont mean shit

We could be in for a long haul, ask Japan

Tue, 12/17/2013 - 21:30 | 4255632 smcapmachine
smcapmachine's picture

Corrections will be short and shallow. Keep listening to doomsday economists - it's guaranteed to keep you underperforming for the 3rd year in a row

Tue, 12/17/2013 - 22:08 | 4255698 stocktivity
stocktivity's picture

5th year in a row

Tue, 12/17/2013 - 21:55 | 4255673 The Heart
The Heart's picture

Beyond insane in the membrain!

And it's...gone!

A few thots come to the empty head that sees nothing....knows nothing...and really does not want to know anything.

What happens to gold after the reset? Like, an ounce of gold is worth 1200 clams today, and after the reset, it is worth 300 clams, maybe less the next? And if you can find uncontaminated food that has not been fukushimaed...how many clams will that cost?

Hummmm...got life?

Tick...tock...tick...tock...tick...tock...

http://www.youtube.com/watch?v=ytP2wzwhR_Y

PREPARE YE MERRY OL MEN AND WOMEN TO GO TO WAR AGAINST YOUR OWN GOVT!!!!

ALL HANDS ON DECK!!!!!!!!!!!!!!!!!!

(coo-coo...coo-coo...coo-coo)

Wed, 12/18/2013 - 05:06 | 4256360 HardlyZero
HardlyZero's picture

Ticking away the moments that make up a dull day
Fritter and waste the hours in an offhand way
Kicking around on a piece of ground in your home town
Waiting for someone or something to show you the way

Tired of lying in the sunshine staying home to watch the rain
And you are young and life is long and there is time to kill today
And then one day you find ten years have got behind you
No one told you when to run, you missed the starting gun

And you run and you run to catch up with the sun, but it's sinking
Racing around to come up behind you again
The sun is the same in a relative way, but you're older
Shorter of breath and one day closer to death

Every year is getting shorter, never seem to find the time
Plans that either come to naught or half a page of scribbled lines
Hanging on in quiet desperation is the English way
The time is gone, the song is over, thought I'd something more to say

Tue, 12/17/2013 - 22:06 | 4255683 Goldilocks
Goldilocks's picture

The James Holmes Conspiracy - Part 1/4 (Documentary)
http://www.youtube.com/watch?v=lWROKa0CXWo (23:29)

The James Holmes Conspiracy - Part 2/4 (Documentary)
http://www.youtube.com/watch?v=oOHIMZ0JzUQ (24:34)

The James Holmes Conspiracy - Part 3/4 (Documentary)
http://www.youtube.com/watch?v=AnKB7Qe-Ll4 (21:22)

The James Holmes Conspiracy - Part 4/4 (Documentary)
http://www.youtube.com/watch?v=ZiGWIjyr_wg (24:46)

Part 4_4 @ (11:22)

Robert Holmes (James Holmes’ father) ... who’s blue blood family links go back to the Mayflower, is known throughout the global banking community, as being the creator of one of the most sophisticated computer algorithms ever developed and is credited with developing predictive models for financial services, credit and fraud risk models, first and third party application fraud models, and internet online banking fraud models. Educated at the University California Berkley, Stanford University, Robert Holmes is currently the senior lead scientist with the American credit score company FICO ...         

Matt (Matt Taibbi) ... LIBOR is like sun of the center of financial universe … if they are monkeying around with LIBOR ... this is like finding out the whole world is built on quick sand ...

~//~

Anchorman - "You Stay Classy San Diego"
http://www.youtube.com/watch?v=MgGCIZi1UjY (0:08)

Tue, 12/17/2013 - 23:53 | 4255936 Cashcollateral
Cashcollateral's picture

Faber has basically lost it. All he ever does is rant about the Fed these days.

Yes, QE is inflating asset prices, yes, the stockmarket is not a reflection of underlying value, yes this is a problem for the 10% of people who are actually still in the stockmarket at this point.

But you wont see a wider economic recovery just by killing the Fed. The real problem is, and has always been, fiscal policy that encourages a value-less service industry, non-profit-making tech companies expecting to earn money from an advertising model based on consumer demand that is no longer there, and a business environment that forces every single innovator and manufacturer to put jobs offshore.

Yeah QE has its problems, but monetary policy cannot be expected to succeed without accompanying fiscal policy.

TL;DR: Fuck Bernanke, but fuck Obama even more.

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