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Marc Faber Would "Squeeze The System Like A Lemon" If He Were In Charge

Tyler Durden's picture




 

From this morning's "Bloomberg Surveillance" with Tom Kenne, Scarlett Fu, Adam Johnson and guest host Ralph Schlosstein:

 

 

RALPH SCHLOSSTEIN, CHIEF EXECUTIVE OFFICER, EVERCORE PARTNERS

Dr. Faber, I would ask just one quick question, and that is, if you were Mario Draghi, what precisely would you do tomorrow to signal that you were after inflation, wanting to stimulate growth, and yet wanted to keep some powder dry?

MARC FABER

Well, it's a very good question. But it's very hypothetical for me for the simple reason that if I were a Central Bank, I would be the greatest hawk in the world.

 

I would squeeze the system like a lemon and bring inflation down to deflation, because deflation has some advantage for the majority of people, for the majority of people.

 

It's great if you have a strong currency and you have weak commodity prices so they can buy energy and transportation at lower costs.

 

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Wed, 06/04/2014 - 19:53 | 4825067 knukles
knukles's picture

Guess he'd be a gold bug in the real world, no?
In any case, when the plan comes together (which everybody loves) everybody can walk and eat dirt, so I don't know what this fuss about cheap energy, food and transportation is all about.

The Great Culling Must Go On!
MOAR mercury in every vaccinaiotn.
MOAR flouride in each drop of no water.
MOAR radiaiton is safe for you (The winner of the next Olympic football meadal is gonna change their name to the "Atomics")
MOAR GMO's
MOAR fiat
MOAR chemtrails
MOAR HAARP rings
MOAR fracking
MOAR bio-war created diseases

 

Great fuckin' place we got here, huh? What could go wrong?

Wed, 06/04/2014 - 20:27 | 4825207 economics9698
economics9698's picture

 if I were a Central Bank, I would be the greatest hawk in the world.”

 

Yea until the dead horse head arrived in the mail.

Wed, 06/04/2014 - 20:40 | 4825240 Flakmeister
Flakmeister's picture

Do you remember the tale of the Gracchi Brothers?

Faber would last maybe 1/10 as long...

Wed, 06/04/2014 - 21:03 | 4825287 max2205
max2205's picture

Blah blah blah.  Sure sure sure.....if pigs could fly

Wed, 06/04/2014 - 21:06 | 4825298 NoDebt
NoDebt's picture

Everyone's a tough guy when they're in no position to change anything.  Look at all the Ex-govvies like Harvey Pitt who suddenly went all 'Conan The Barbarian' with their words after they were no longer in office.  Never with their actions while they were in office, though.  

Faber would be spouting the glad tidings of QE and ZIRP from 2 weeks in.

Wed, 06/04/2014 - 22:31 | 4825551 Four chan
Four chan's picture

so he would squeeze the lemon till the juice ran down his leg?

Wed, 06/04/2014 - 23:28 | 4825668 Flakmeister
Flakmeister's picture

.... cuz I got you in the sights of my love gunnnnnnnn.

Thu, 06/05/2014 - 00:33 | 4825769 Flakmeister
Flakmeister's picture

Someone is clearly not a Led Zep fan....

That being said, IIRC I think Albert King beat Robert Plant to the punch line....

http://en.wikipedia.org/wiki/Born_Under_a_Bad_Sign

Thu, 06/05/2014 - 00:59 | 4825803 cape_royds
cape_royds's picture

Robert Johnson's "Travelling Riverside Blues" might be the first record with that line.

But I doubt if Robert Johnson orginated it. Probably a traditional blues phrase.

Thu, 06/05/2014 - 09:04 | 4826377 Flakmeister
Flakmeister's picture

Yeah, definately the lemon part...

Thu, 06/05/2014 - 04:46 | 4825958 Fiat Envy
Fiat Envy's picture

This reminds me of an Eric Sprott interview.  In it Sprott was asked what he would do if he were head of the Fed.   His reply was quit.  When he was asked to answer the question seriuosly he pointed out that things had reached the point where every choice, even the proper ones, would result in an enormous amount of pain for the average person and he wasn't sure that he would be able to see it through if he started the Fed down the road of solving the problems the Phds had created.  So he answer quit was genuine.

Wed, 06/04/2014 - 19:44 | 4825069 I MISS KUDLOW
I MISS KUDLOW's picture

the system is being squeezed since the 2011 paper gold reverse

Wed, 06/04/2014 - 19:56 | 4825102 Yen Cross
Yen Cross's picture

 Good ole Larry "supply side economics Kudlow"

Wed, 06/04/2014 - 20:06 | 4825133 cifo
cifo's picture

Squeezing a lemon is nothing compared to squeezing sugar cane. What's left is some dry wooden fibers.

Wed, 06/04/2014 - 20:20 | 4825184 lotsoffun
lotsoffun's picture

thank jehovah for moses.  he could get water out of rocks.  the $40 bucks interest i earned on $100k in 401 in money markets, less the $60 fee.  thanks bennie.  keep squeezing.  bennie is moses.  it's a miracle.  i'll crumble soon.

 

Wed, 06/04/2014 - 19:47 | 4825075 stant
stant's picture

Thus. The old saying, is the juice worth the squeeze

Wed, 06/04/2014 - 19:49 | 4825080 khakuda
khakuda's picture

Ah, so true.  But, alas, in the idiotic world which we have set up with fractional reserve banking, 3% down payments and tons of leverage, the financial types would never let that happen.  Their lives depend on taking low cost funds from the Fed and leveraging the bejesus out of it to achieve a reasonable rate of return.  Anything that causes asset prices to decline blows up their whole levered system.

Of course, the Fed isn't trying to protect the financiers they tell us.  They are all about the little guy.  Seriously, Cratchit, I work you to death not for my own profit, but for the welfare of poor little Tiny Tim.

Wed, 06/04/2014 - 19:52 | 4825088 knukles
knukles's picture

See!
See, I todja!
It's all for the chillen'

 

How many times I gotta tell ya'?
   -Eddie Bernays

Wed, 06/04/2014 - 20:00 | 4825116 khakuda
khakuda's picture

Everytime I hear Yellen or Bernanke say their very effective efforts at starving savers and senior citizens are to help the little guy and that they are just trying to create jobs, I want to puke.  My worst boss, the one that tried to screw me all the time, used to speak just like that.  You know the type.  The ones that tell you it isn't about the money, when to them it's ONLY about the money.

Wed, 06/04/2014 - 20:37 | 4825230 TeethVillage88s
TeethVillage88s's picture

Yeah, Trickle Down Part II. Good call. The 1980s didn't seem very good, but Reagan had a poor economy to work with.

Trust us. It is Supply Side Money. You don't get the funds, but you can use your Credit Card and take out huge Student Loans... and if the Health Care system puts you in bankruptcy, well it is all for the "Good of the Kids."

Wed, 06/04/2014 - 20:43 | 4825247 Flakmeister
Flakmeister's picture

WTF???

If Reagan was playing Hold'em, he was dealt the equivalent of pocket aces, what with the North Slope and North Sea just ramping up and interest rates with no where to go but down...

The recent Presidents that were given the shit end of the economic stick were Carter and BHO....

Wed, 06/04/2014 - 22:27 | 4825541 TheRedScourge
TheRedScourge's picture

Are you trolling, or do you mean that it was in his favor that the economy was in the toilet when he got in, given that it gave what he had been saying for years before some extra credibility?

Wed, 06/04/2014 - 23:32 | 4825673 Flakmeister
Flakmeister's picture

Hell no...

I'm the straightest fuckin' shooter here...

If you cannot grasp the difference between a recession driven by temporarily high oil prices and jacked up interest rates and the balance sheet fiasco of 2008 you should not be commenting on web sites that have anything to do with Economics..

Your kind of ignorance is reserved for the Yahoo! boards...

Thu, 06/05/2014 - 04:13 | 4825950 TeethVillage88s
TeethVillage88s's picture

That is true. Better to take over from a crappy leader - you can pretty much guarantee to be successful.

Wed, 06/04/2014 - 19:50 | 4825089 Yen Cross
Yen Cross's picture

 I wish I had Mr. Faber's "doom & gloom" crew.

Wed, 06/04/2014 - 19:58 | 4825107 Skateboarder
Skateboarder's picture

Buy doom, get gloom free.

Wed, 06/04/2014 - 20:05 | 4825135 Yen Cross
Yen Cross's picture

  I've been away. You're missed.

Wed, 06/04/2014 - 21:07 | 4825299 Freebird
Freebird's picture

No-one noticed lol

Wed, 06/04/2014 - 21:20 | 4825332 Yen Cross
Yen Cross's picture

 4 years and "narry" a note? Freebird

 Stripmall developer?

Wed, 06/04/2014 - 22:46 | 4825581 Freebird
Freebird's picture

& nobody cares...

Wed, 06/04/2014 - 19:55 | 4825100 I Write Code
I Write Code's picture

... until the juice ran down his legs?

Wed, 06/04/2014 - 21:03 | 4825291 NoDebt
NoDebt's picture

Nice.  Old Led Zep reference.

Thu, 06/05/2014 - 01:35 | 4825824 Schmuck Raker
Schmuck Raker's picture

"I'm gonna leave my children...

down on this killing floor.. floor...florr ...flooooR"

[Intro to real Heavy Metal Rock n Roll, JICYMI.]

"The Lemon Song" for you youngsters.

Wed, 06/04/2014 - 19:57 | 4825103 agent default
agent default's picture

And I am sure that once you get deflation everyone will be paying back their loans secured on rapidly depreciating assets with increasingly hard to get by liquidity.  Faber has completely lost me on this one.

Wed, 06/04/2014 - 20:12 | 4825152 khakuda
khakuda's picture

repost deleted

Wed, 06/04/2014 - 22:18 | 4825521 blindman
Wed, 06/04/2014 - 20:11 | 4825154 khakuda
khakuda's picture

Right, they would default.  The lenders would take a haircut as prices dropped.  Eventually, prices would become more affordable and maybe people could even afford to buy things through work and savings instead of being debt slaves to the banks.  Imagine it not taking 20 -30 years to pay for college and a house because there wouldn't be an arms race of spending borrowed funds to compete with one another.  The more leveraged the world has become, the more wealth has been allocated to the financial people and from the majority.

Wed, 06/04/2014 - 20:20 | 4825188 OC Sure
OC Sure's picture

 

 

That's right. Another way to look at it is that the initial loss of value of the currency is the thieves' gain and the subsequent rise in the value of the currency is the victim's replenishment.

Wed, 06/04/2014 - 21:28 | 4825354 profchaos
profchaos's picture

Yeah, and good luck getting businesses to make capital investments when their prices are dropping and their cash holdings are appreciating. Deflation is great in the world populated entirely by wealthy retirees. But if you need to work for a living or want to start or grow a business... not so much. Modest inflation is a necessary condition for private capital. Only the government would be eager to invest into a deflationary market.

Wed, 06/04/2014 - 23:25 | 4825640 BringOnTheAsteroid
BringOnTheAsteroid's picture

I've gotta call hogwash on this one. So businesses will only make capital investments when prices are going up, but prices are only going up because of inflation, not necessarily because there is real demand (and not pulled forward demand). The prices of PC's and laptops and electronics in general have been going down for decades so if you were right Apple wouldn't have created iPhonen, airline tickets have been falling for decades against wages so your assumption is the airline industry wouldn't be investing in A380's, B787's etc. 

Wed, 06/04/2014 - 20:00 | 4825109 bodski
bodski's picture

Problem is that 'most people' have been doing as they have been told, reading the 'loving' letters that come through their doors every week telling them to load up on debt. Good little consumers spending for the good of their nations. People need to start making the most of their bankruptcy laws before they get revoked. Before they get offered a nice little holiday break in the new-world 'Gulags' instead.

Wed, 06/04/2014 - 20:01 | 4825118 blindman
blindman's picture

the deflation might strike all at once like
a grand rebalancing theft, further consolidating
the stranglehold on the people accentuating the
great divide.
.

Wed, 06/04/2014 - 20:03 | 4825124 ebworthen
ebworthen's picture

Squeeze it Marc!  Squeeze it!

Central Banks don't do this - they want to punish most people and reward the banks.

That's why they are called Central Banks.

Squeezing the Public Treasury dry.

Wed, 06/04/2014 - 20:05 | 4825126 Goatboy
Goatboy's picture

What a fucking shill-moron xD

Wed, 06/04/2014 - 20:04 | 4825129 suteibu
suteibu's picture

The system doesn't require squeezing.  It only requires ZERO central planning/manipulation.

Wed, 06/04/2014 - 20:06 | 4825134 Frilton Miedman
Frilton Miedman's picture

 

 

While I like Fabers underlying points, truth be told, he'd have "squeezed" my portfolio "like a lemon" if I'd listened to him over the last five years.

 

 

Wed, 06/04/2014 - 20:07 | 4825140 BeetleBailey
BeetleBailey's picture

...but he's not "in charge"

Only bought off liars are, and until each one is executed/gang raped/shot/beaten stabbed and publically hanged (in no particular order) this show of shit will continue until someone (paging Vladmir Putin...please pick up the white courtesy telephone, main concourse) - sets off the mother of all wars....

 

Wed, 06/04/2014 - 20:08 | 4825142 gatorengineer
gatorengineer's picture

There has been alot of talk about the fed tapering.  Some talk of them unwinding the balance sheet, but that just transfers the assets and liabilities out of government control, e.g. out of their hands, but I have never heard anyone say anything about winding back the liquidity that has been injected.  I dont see how they can do that without a total collapse....

Wed, 06/04/2014 - 20:19 | 4825153 Yen Cross
Yen Cross's picture

  What is this liquidity you speak of gatorengineer

  I see massive rehypothecation stacked on "worthless good will"

Wed, 06/04/2014 - 20:22 | 4825168 TeethVillage88s
TeethVillage88s's picture

Rumsfeld is famous for squeezing the US Military. I got mixed feelings for Rummy, but for the first 3 years you can squeeze big organizations and get efficiency. For Instance the Federal Government is rolling in money, seems to have lots of employees right now. Double Digit budget expansion under 5 years of continuing resolutions.

But deflation is also where wages shrink. We have had downward pressure on wages or... maybe we just keep losing the good jobs with responsibility. Anyway... the USA is starved for leadership, investment, incentives for new businesses, and probably starved for projects High School Student can jump into and make into real products (meaning I think US Education system sucks or is not properly oriented to business, accounting, finance, science, technology in High School).

So... I don't see Leadership from politicians and Faber is a businessman. I don't see him as a solution. I don't see him as a politician that would start projects that lead to more work & happiness in the USA. Starve. The work force of 92 Million is no longer interested in work.

Aren't Bond holders & Insurance companies starving for yield right now. Savers, people on fixed income, People that buy CDs or Money Market Accounts... and I heard Insurance companies need bonds with yield or the rates will go up. So 5 years ZIRP leaves part of the people starving. But maybe that is what Marc Faber is talking about addressing... raising interest rates.

Wed, 06/04/2014 - 20:46 | 4825254 OC Sure
OC Sure's picture

Just unplugging the printing presses would be a good place to start.

Wed, 06/04/2014 - 20:22 | 4825192 kchrisc
kchrisc's picture

If I were made the new FedRes head tomorrow I would show up with a bulldozer and a guillotine.

Wed, 06/04/2014 - 20:30 | 4825210 TeethVillage88s
TeethVillage88s's picture

Free Trade is going to account for some Inflation of Commodities. Chinese chasing US Crops, meat, fish, chicken, soybeans, wheat, corn? Gold, Silver, Platinum? Oil, Gas, Gasoline, Diesel? Coal?

I'm not sure we should have free trade with people that have poor labor practices and may use slave labor and have no benefits for workers. But also food & Energy & Oil are commodities and the foreigners may be causing inflation that hurts the USA.

So why would Marc Faber answer this question in such a Flippant way? We had drought, disease, floods, that lead to inflation. But no one wants to talk about the Gasoline Inflation we have with supplies high, demand in the US down, Production Up.... Health Care & Education Inflation seems more like a Cartel or Oligopoly or over expansion or buying too much stuff from expensive salesmen in big pharma or hospital equipment... that a shortage of those things.

Wed, 06/04/2014 - 20:48 | 4825258 OC Sure
OC Sure's picture

Just unplugging the printing presses would be a good place to start.

Wed, 06/04/2014 - 20:37 | 4825229 Dr. Engali
Dr. Engali's picture

If I were the fed chief I'd load up on gold and then print like a mother fucker....... Oh wait......

Wed, 06/04/2014 - 21:01 | 4825283 SilvertonguedAngel
SilvertonguedAngel's picture

If I was the CEO of Goldman I'd sell zillions of shares paper gold nekid shorts to repress the phyzzie value, while secretly buying up all the phyzzie at the manipulated lower price and just wait until the manipulation implodes and the paper gold value goes... poof, and the phyzzie goes through the moon.

After that I would just have to pay a small fine, but no jail time.

Thu, 06/05/2014 - 00:23 | 4825759 RaceToTheBottom
RaceToTheBottom's picture

Why would evil have to pay a fine?  They are doing Gods work, don't you know?

Wed, 06/04/2014 - 20:39 | 4825239 bbq on whitehou...
bbq on whitehouse lawn's picture

He and every other "rich" .tm will be thrown alive on a pile of burning tires when those checks he wrote bounce.

Wed, 06/04/2014 - 20:40 | 4825241 Peter Pan
Peter Pan's picture

What Faber said is correct. The super rich have been feeding asset inflation which is making them richer and making life tougher and tougher for the poorer end which in vain tries to put a roof over their head and educate itself at an extremely high cost.

The high capital gains many of us are clinging to are illusory but the pain that such gains inflict on the bottom end of society are very very real and painful.

Wed, 06/04/2014 - 21:08 | 4825290 Frilton Miedman
Frilton Miedman's picture

 

 

Fed Conspiracy theories aside, very true.

Fed policy is far too crude to control dispersion of money supply, there's a lotta trickle, not much down.

It also doesn't help that, against Reagan's original scheme, cap gains are taxed at a lower rate than real work.

The non-transparent & unregulated nature of the CFMA exacerbates the problem, allowing commidity & futures traders to control input costs for regular stocks, enabling a form of market manipulation that comes off the hides of lower income consumers.

 

 

 

 

 

Wed, 06/04/2014 - 20:42 | 4825244 blacktusk
blacktusk's picture

And hurry, cut him off with the music, he's making sense!

Wed, 06/04/2014 - 21:05 | 4825293 RECISION
RECISION's picture

Faber for Prez

Wed, 06/04/2014 - 21:05 | 4825294 Duc888
Duc888's picture

Teeth.... :Rumsfeld is famous for squeezing the US Military. I got mixed feelings for Rummy, but for the first 3 years you can squeeze big organizations and get efficiency.

 

Efficiency?  That fukker "lost" trillions under his command and "declares war"...

Ayyyup.

https://www.youtube.com/watch?v=xU4GdHLUHwU


Thu, 06/05/2014 - 04:10 | 4825948 TeethVillage88s
TeethVillage88s's picture

You got me there. I don't really like Rummy for these BS Sessions he gave to the Media. He's a Jerk. Probably all the missing money went to Investments with the Carlisle Group.

We all know there are copies and duplicate copies and triplicate copies of everything the government does. It is inconceivable that money is lost from Military Comptrollers.

This is another case of Congress Kowtowing to someone in power. Felony Stupid. $2.3 Trillion, but every $1 Million has executive signatures attached to it.

Like those TBTJ Bankers, Jack Abrahmson (Lobbyist), Kenneth Lay (ENRON), and the whole Iraqi War.

Anyway Marc Faber might know how to tighten up an organization when you first take over, but he is probably the wrong guy to lead all of our government, banking, military, congress, and DOJ. But he can't do worse than Obama.

Wed, 06/04/2014 - 21:24 | 4825341 Yen Cross
Yen Cross's picture

 Has anyone actually read the article?

 Look at the last "paragraph".

  It's great if you have a strong currency and you have weak commodity prices so they can buy energy and transportation at lower costs.

Wed, 06/04/2014 - 22:07 | 4825479 Bemused Observer
Bemused Observer's picture

Ha, I saw that and thought bullshit...it is NOT great to be out of balance, no matter who 'profits' from it.
But he IS right about the deflation...it IS needed. Prices of shit have to come down to a reasonable level, and be in line with how our economy is doing. Somebody is simply going to have to let go of some money...whether it's current homeowners who will lose equity, or "investors" who lose profits in the markets, all that shit simply MUST come down. Since EVERYTHING would come down, the ratios would remain basically the same, the rich would still be rich, the poor still be poor, but on a reasonable economic game board, and at NORMAL levels. Not this hyper-inflated gasbag shit.
Then, once the true market 'price' is determined, they should institute a basic set of rules then stand the fuck BACK and STOP all this eternal God-DAMNED fucking around trying to micro-manage the economy!!!

Wed, 06/04/2014 - 22:11 | 4825482 Roark12
Roark12's picture

Quote from the Great Pauly Shore Movie:  Encino Man:  No weezing the ju-uice! - https://www.youtube.com/watch?v=h1hEKqZz-OY

Thu, 06/05/2014 - 04:43 | 4825956 GFORCE
GFORCE's picture

Being such a huge contrarian It's probably Marc's portfolio that's squeezed like a lemon!

Thu, 06/05/2014 - 07:11 | 4826025 falga
falga's picture

If you deflate, all debts will be much more expensive to repay and consequently the heavily indebted working & middle class will find itself homeless again as most govt will go bankrupt immediately.

yes deflation is good for cheap commodities and energy but if you don't have a home to heat or a car to fuel and no government, how will you take advantage of this "deflation" advantage...

I think deflation is apocalyptic considering the current set of circumstances.  Draghi will do what all bureaucrats have done before him, print, inflate and save his banker colleagues to perpetuate the status-quo.

Thu, 06/05/2014 - 07:51 | 4826059 Chuck Knoblauch
Chuck Knoblauch's picture

When did a reducion in inflation become deflation?

In your crazy mind, if an obese person loses 50 pounds they suddenly become malnourished.

Your all or nothing concept of reality is absurd.

Thu, 06/05/2014 - 07:35 | 4826046 Chuck Knoblauch
Chuck Knoblauch's picture

RESTORE THE CURRENCY'S PURCHASING POWER.

FED'S QE POLICY IS CAUSING INFLATION.

Thu, 06/05/2014 - 18:15 | 4828243 who_cares
who_cares's picture

Again, we have Mr Faber (with all due respect) coming out with nonsensical statements.....since central banks are de facto institutions attached to governments, they most and foremost are guided by short termism (serve the people) and long termism (serve the govts). In reality this translates into taking relatively low inflation now for higher inflation expectations later. This can be sucessfuly exploited by any private individual and long term having inflation (3-5 per annum) is desirable for any country anyway (helps reducing govt debt). Persistent deflation, on the other hand, produces loss of jobs and goes into spiral. This is 101 economics, nor rocket/conspiracy science. Why is he afraid of inflation anyway? Big chiunk of US inflation has been sent overseas and ended up in Chinese RE.

Is private sector done with deleveraging yet? Labour force is tired of waiting.

 

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