Beware "The Distortions Of The Ministry Of Truth" Warns A Cash-Heavy Marc Faber

Tyler Durden's picture

"Stocks in the advanced economies are basically fully priced," Faber pronounces, and adds that, given their low yields, government bonds are also expensive. The true contrarian play is the "most under-appreciated asset - cash."



Even though investors won't earn any money and will actually lose money in the long-term because of Federal Reserve-induced dollar depreciation, Faber suggests that "for the next six months, maybe cash is the most attractive," because the US economy is not recovering at all the way stocks are priced and what is more worrisome is the potential for a sudden eruption of inflation.


As we have noted numerous times, Faber blasts that despite the prices of everything going up, government statistics "are distorted by the ministry of truth" in order to enable more money printing by the central banks. Crucially, while we may not be seeing wage inflation in the US, that excess liquidity is squirting up everywhere around the world's assets (and wages in China and India for instance), and the 2008 financial crisis could be just a precursor to a more severe economic fallout on the horizon.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
jomama's picture

a broken record is correct how many times again?

Carpenter1's picture

Think you got your metaphors mixed up cowboy

qqqqtrader's picture

yup, jofatha would probably used a clock in that sentence somewhere

Beam Me Up Scotty's picture

A stock market tank right before CONgressional elections?  I doubt it.  The democrats aren't going to want to lose anymore seats than they already are.  Yellen will be "going to work" I am sure.  Notice how gas hasn't had its typical May run up to over $4 like it has in past years?

andrewp111's picture

I don't know they can time things all that well. They only have a few knobs and buttons, and some have long variable delays. It will crash whenever it crashes. Before the election, after the election, next year, 2016, whenever. I do agree that crashing before the Midterm election is unlikely though, just because there may not be enough time for all the stimulus to dissipate before 2015.

markmotive's picture

I've heard worse from Marc Faber

Dr. Doom: “A Lot Of Problems Are Coming… Revolution… Social Strife…”

Abi Normal's picture

Something like a broken clock being right twice a day comes to mind, never mind the slow clock! duh...

zaphod's picture

"Cash-heavy" is not the way to play the game when every central bank in the world is racing to see who can print the most. Faber will be lucky to buy a sandwich with that cash when this is all over.

Squid-puppets a-go-go's picture

yer, what a peice of shit article "Im in cash because i fear inflation"   w.t.f

new game's picture

"bonds are expensive" wow, anything else i should know. cash may well be the last standing soldier before it drops dead. but ifany of this shit happens we got greater problems. problems i don't even want to imagine...

but, it will happen...

cause they are in control til they are not.

yellen can not paper over the world.

japan first, then the dominoes start falling...

Ham-bone's picture

Spanish 10yr bonds @ 2.88% are within 27 bp's of US treasury's...Italy @ 33 bp's -

5 yr Spanish / Italian already cheaper than US 5 yr bonds.

Ireland 10yr @ 2.69%...8 bp's

Portugal 10yr @ 3.46%

Interest rates are collapsing globally...Ummm, wonder if this is bullish???  Sell anything that comes out of a mine and go long anything except those things that are scarce???

Japan is the leader and we are all going to catch down to the rising sun's .50% (half a percent) for ten years loaned money.  Domo arigato Japan.  Your lack of a present is our future.

RaceToTheBottom's picture

Hey, is that a government statistics fish hook you have hanging off your mouth?

Do you go to the grocery store?  Do you buy stuff or are you one of those guys that eat IPads?

RhoneGSM's picture

Well it's not rocket surgery....

Brutlstrudl's picture

Thats a Yogi Berra quote.

CrashisOptimistic's picture

"Crucially, while we may not be seeing wage inflation in the US, that excess liquidity is squirting up everywhere around the world's assets (and wages in China and India for instance), and the 2008 financial crisis could be just a precursor to a more severe economic fallout on the horizon."


Except all the QE money is on deposit at the Fed as Excess Reserves.

Winston Churchill's picture

One tenth of it is.
Those are reserves able to be fractionalized.
The other $20 tn is whats goosing the asset bubbles.
That's if TBTF can hold themselves to 10:1 which is

BeetleBailey's picture

depends on the B side...

Brutlstrudl's picture

Thats a yogi Berra quote

AccreditedEYE's picture

LMAO. Man, between this, the LT VIX chart that @NotJimCramer pimped and the constant negative headline drum beat over at CNBC, (with lots of pictures of traders looking "stressed" and "confused"), this has to be *THE* contra signal of a lifetime to GET LONG! I expected better from you ZH.

Save_America1st's picture

I think the most underappreciated and most highly undervalued asset is actually phyzz silver.  Take a large chunk of your consistently debased cash and trade that shit in for large chunks of phyzz silver.

Silver is currently the deal of this century.  It is so tremendously undervalued while at the same time being so rare WHILE at the same time being tremendously DESTROYED and/or hoarded possibly never to see the light of day again for decades.

Stack it away in a nice deep, dark place and wait this shit out.  When cash (worthless, fiat, paper garbage) is utterly destroyed then REAL MONEY, silver and gold will rule the world again. 

And so will the stackers...cuz those who hold the phyzz will be the shyzz!!!

P.S. ~  also:  food, water, land, clothing, hunting-fishing-camping gear, medical supplies, ammo, guns, etc.  You'll need all that to go with your stacks of Ag and Au, too!

Tegrat's picture

Lets get real on silver. It's 90% commodity and 10% money. Dollar goes to hell youre even -- 10%. Dollar surges, silver sits in a 1930's depression with the rest of industry. But at least you have 10% equity. Note that i do have a monster box and more i lost somewhere in florida on a bullion dive. But silver folks, best thing about it is it will have some value if the dollar tanks. If the dollar goes up,  you will have lost.

pies_lancuchowy's picture

how can it be only 10% money, if a 1oz Maple Leaf which can be bought for 20 USD has a face value of 5 CAD ,

which is approximately 18% of what you pay ?

I understand your point and agree with it, just not the '10%' part (if I understood you correctly)

bardot63's picture

The $5 on the Maple, the $50 on the gold Eagle, have nothing to do with price or value.  They have to do with official monetization, which puts them under purview of government in order to classify them as official currency.  Since governments have sway over the legal definition of money, and since governments may want to change money from time to time, they purposefully put [face value] dollar amounts on the coins, so they may from time to time legally recall them.  Note they choose a ridiculously low notional value, and not a higher realistic value.   If you are accumulating these, and accumulating for the correct reasons (not investment, but savings and insurance) then you shouldn't be worried about the dollar (euro/yen/yuan) price stamped on the coins,  The true value of these coins is not found in dollars/yen/euros/etc.  The true value is as a store of wealth in weight and compositon. Has been for 5,000 years and will be for another 5,000 if we make it that far.  If you are worried about confiscation (the 1933 FDR action was N0T confiscation, it was expropriation) then you should not be involved with gold or silver at all.  TEGRAT's comment is wrong in this respect:  Silver is not 10% money and 90% commodity.  Call it whatever name you like, but money - true money- is a commodity, just as all true wealth is a commodity.  

Tegrat's picture

5-6k years of silver? I believe silver was the first move away from real money. Zinc was next. Now we are at paper. You cant go wrong with silver in the likely scenario but in the wrong scenario, unbelievable it will seem for the shorter term,   you are trading valuable dollars for a commodity (90%) where producing the basics in life is no part of.

bardot63's picture

What is your definition of real money?

nightshiftsucks's picture

And what would gold be worth with a strong dollar ?

Tegrat's picture

I am not sure, but it was the first money. If gold turns to crap then it's like the tide going out before the wave. 


On a side  note, i learned in 8th grade science a receeding tide does not mean to go out into the mud. It means to run the other way.

I was shocked in Dec 2006 that i had knowledge most of the world doesnt.


I need Another Beer's picture

Maybe so, i don't know, I am banking on family and friends. Plus I don't have a long term guilty conscience after the shot

Son of Loki's picture

"Fully Priced," is my broker's euphemism for a badly overpriced, dangerous market with irrational PEs..

fonzannoon's picture

I have never heard a broker say "fully priced".

Ness.'s picture

LOL.  Agreed.  When my broker used to say that anything I was long was overpriced, I figured he just wanted me to sell it to him because he thought it was going higher.  Nasty folks them "broker" types.

Broker - Noun

1.  an agent who buys or sells for a principle on a commission basis without having title to the property.

nmewn's picture

And the best thing is, if you win, you get to fill out the tax forms or have someone else do it. If you lose, you get to fill out the tax forms or have someone else do it to offset a different win.

Its like some mad accountant employed by the casino operator got together with the IRS and devised a plan to take the participants thrill of winning or anguish of losing to the seventh circle of hell.

Tegrat's picture

I have always filled out my own forms. via software or what not. A script can take any file into a schedule D on TurboTax.

600+ trades a year.

Done with a simple perl script.

Mostlyi just convert to CSV and send the IRS a CD with all the data in XLS format.

One year i just provided short term gains + short term losses like always. No CD.

Got a letter Audit based on my sells only. AKA Correspondence audit (I used to work for them bastoids). I had to load up turbotax and run my script a 2nd time. New data showed in TurboTax that they owed me a little bit.

They dropped the audit and was free to continue making money for their constituents.





NOTaREALmerican's picture

I'm thinking assets with a high bullshit coefficient are your best bet in the near and long term.

Send for my free newsletter which describes how you can get rich with bullshit.  

eddiebe's picture

I've come to the conclusion that Marc is either playing stupid, or else he is. He's lost credibility with me. Too bad too, I like the guy.

Freebird's picture

He's right if you are pretty sure a crash is coming in the next to buy "cheap".

Atomizer's picture

Yellen still claims to understand her own foundation is unidentified. In the meantime, society will direct future guidance to Janet/Bank of International Settlements. The agenda of monies will be exposed between the UN and EU/NATO forces. US is the piggybank under US taxpayers.

Spungo's picture

I'm a huge fan of his Doom, Doom, and Doom report

Spungo's picture

Will that guy stop wearing that fucking wig? 

Atomizer's picture

The same guy will always switch wigs.

Those windmill farms have the Palm Springs fruits & fuck nuts upset. Get this, electricity costs has doubled. LOL


AdvancingTime's picture

I did not see the question: HOW WILL I PROTECT MYSELF FROM MASSIVE INFLATION?   Never before has mankind diverted such a large percentage of wealth into intangible products or goods.  I contend this is the primary reason that inflation has not become a major economic issue.

The modern economy is loaded with interwoven contracts reeking of contagion. This means many intangible investments could suddenly become very illiquid.

If faith drops in these intangible "promises" and  money suddenly flows into tangible goods seeking a safe haven inflation could soar even as debts go unpaid and promises are left unfilled. This could really shake up the world, more on this subject in the article below.


The_Ungrateful_Yid's picture

This guy is full of shit, he's in the market already, smokin opium with thai whores....

homiegot's picture

Sounds good to me. Sign me up.

james.connolly's picture

You can go to LAOS, in Vieng Vang (?), there its like Amsterdam in the JUNGLE, hash pizza, opium pizza.

Sure you can sit and smoke opium, but the almost all the whores are lady boys; LAOS government doesn't allow tourists to bone their women, its a communist thing.

That said,out by the airport there is a bunch of whore houses ran by the police department, and its all good.

But in the main area of town, or down on the island I would be careful about what appears to be a 'girl'. But there is plenty of drugs of any kind.

Vieng-Vang(?) is a major spring break place for kids, 1,000's dancing in the street all night, ... lots of music, lots of top-less white girls stupid drunk, this is the place where kids die every year drinking gallons of methanol or paint thinner, passed off as margarita-buckets.

Old timers ONLY drink beer-laos out  of the bottle, carry your own opener.


WRT to Thailand, drugs are MAJOR prison time (THANK YOU CIA/USA LOBBYING), up in the jungle in MYANMAR its all good, ... well same for deep jungles of Burma(myanmar),  and CHina,... but these aren't exactly tourist places, "Apcolapyse Now" comes to mind, ...

Most of ASIA, if your far enough in the BUSH you can always find drugs or hooch of any kind, problem is deeper in the BUSH, the less likely you will find that COVETED RENTAL princess ( non-existant in my mind ). Deep in the BUSH all girls are already spoken for,...  Yes everywhere has whore-houses, but in the bush, these are the kind where the girls are in chains, and if your into that stuff,  your not human.


Abi Normal's picture

Heard it before, will hear it again, next....


We all know it will implode, just a matter of time!  Problem is, no one can predict the time and place.

james.connolly's picture

The USA has certainly gone FULL RETARD this year,

and NOTE its the USA passing sloppy buckets of FREE SDR's on PUTIN in UKRAINE,...

The USA is printing FAUX FIAT a full speed, coming out of its ass at two ends, one SDR and other USD.

Probably in JULY 2014 at the upcoming BRICS PUTIN will announce a new BRICS currency backed by GOLD.

All this is supposed to be in the cards by the time PUTIN hosts the BRIC's Meetup for 2015 in RUSSIA.

Obama is fucked.

james.connolly's picture


"Stocks in the advanced economies are basically fully priced," Faber pronounces, and adds that, given their low yields, government bonds are also expensive. The true contrarian play is the "most under-appreciated asset - cash."


What can we say, every six months or less FABER issues this statement, I mean I love the guy, he's an inspiration; but I would be careful of heeding his advice, her's a guy that worked in HONG-KONG, married a thai woman that had thai restaurant, and then followed her back to chiang-mai(thailand) where he put millions of dollars of REAL-ESTATE in her NAME; to remind guys abroad, in most of ASIA white-guys can't OWN land, well its the same in Mexico.

Putting all your wealth in another person's name ain't smart,... Just Saying; FABER obviously has a business partner and a very good relationship. God bless FABER for having this kind of trust in his spouse.

In my years traveling around, there's a joke I always hear in Chiang-Mai, "We all hear that FABER is here, but nobody has ever seen him",... I don't like the place its dirty, crowded, bad air, and terrible traffic, the old city in the walls is nice, but if you go out side of that the traffic will kill you; its almost impossible to walk if your into that shit.


Faber doesn't know when the USD will collapse, none of know, the NEW game has begun with SDR, a second source of FIAT to INFINITY from WASH-DC.

This could either be a sign the end is near, but most likely I think we can call it DEJA-VU 1972, another 40 years for the USD, which could mean the USA stock-market skyrockets and another good 40 years is seen for the USD.

The gist is that NOW the USA will be giving out SDR's to everyone, and then to SPEND them you have to BUY USD, this is even better than FED money, so it allows the FED to fix its budget, and when the WORLD must BUY US dollars it will also have to buy US Treasury DEBT, and US stocks... with those US Dollars,

I want to SEE UNCLE-SAM neutered just like the rest of you, but something is afoot, and I think it smells like the 1970's resuscitation.

The USD is like the ever-ready bunny that just will not DIE.

THE IMF(WASH-DC) will print SDR's to INFINITY, and talk shit about being backed by gold as the narrative suggests, ... NOT

There is NO fucking gold, remember the last IMF chief said so "FORT KNOX" has no GOLD.


mogul rider's picture


Jesus christ here's cum da pump again.

Lets see

49 buck to 19 in a year. Yeah I get it. it's a great fucking investmetn or safety mechanism. How's that trade??

Yup safety for sure as you lost 60% of your money. Faber's cash trade is the perfect trade right and being in cash after a 300% lift in tech stocks the last 2 years.

Cash is mobility. You'll need it. Infation? at 3% inflation I lose 3% a year on my cash as I wait or opportunities. Yet you propose to use this cash in Yellen blow job market that will correct 70-90%....

I'll take a 3% hit thanks. BTW what if your inflation BS is wrong. Oh my - wouldn;t that fuck up your day. Yet my cash makes 1% in a deflationary crisis. WOW ....

Now is you'd sold you phyzz at 49 after buyign it at 7 then buying a boring index ETF's like the QQQ you'd only have taken that 49 value to 160....

Its a trade - If you had any ethics you'd tell the full story of how you raped the stupids as they swalloweed your "to da moon? pitch 3 years ago as you backed out the back door....