Marc Faber Explains The Fed's Dilemma In 15 Words

Tyler Durden's picture


For over 5 years we have been explaining the hole that the fed has been digging (most ironically here). This morning's op-ed by Warsh and Druckenmiller highlights many of the problems but we leave it to Marc Faber to succinctly sum up the dilemma that the Fed faces (and by dilemma we mean, the plan) - "The more they print, the more inequality there is, the weaker the economy will become." Simply put, "it's a catastrophe," Faber told CNBC, "what the Fed has done is to lift asset prices, and the cost of living. In the meantime, the cost of living increases are higher than the wage increases. The typical American household income is going down in real terms." Recovery?



As we noted previously, the greatest irony of the entire "record income inequality" debate...

One can read 696 page neo-Marxist tomes "explaining" inequality in a way only an economist could - by ignoring the untold destruction economists themselves have unleashed on society with their "scientific theories" (and providing a "solution" to the inequality problem which we warned readers was coming back in September of 2011) or one can read the following 139 words by Elliott's Paul Singer which in two short paragraphs explains everything one needs to know about America's record class inequality, including precisely who is the man responsible:


Inequality in the U.S. today is near its historical highs, largely because the Federal Reserve’s policies have succeeded in achieving their aim: namely, higher asset prices (especially the prices of stocks, bonds and high-end real estate), which are generally owned by taxpayers in the upper-income brackets. The Fed is doing all the work, because the President’s policies are growth-suppressive. In the absence of the Fed’s moneyprinting and ZIRP, the economy would either be softer or actually in a new recession. 


The greatest irony is that the President is railing against inequality as one of the most important problems of the day, despite the fact that his policies are squeezing the middle class and causing the Fed – with the President’s encouragement – to engage in the radical monetary policy, which is exacerbating inequality. This simple truth cannot be repeated often enough.



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Fri, 06/20/2014 - 20:42 | 4879623 ATM
ATM's picture

Money printing has always destroyed the middle class.

Fri, 06/20/2014 - 20:54 | 4879645 Da Yooper
Da Yooper's picture

Problem is


the middle class is too hung up on their bread & circus's


when or IF they WTFU it will be to friggen late


ohhhhh well stupid should be painful

Fri, 06/20/2014 - 21:01 | 4879657 onewayticket2
onewayticket2's picture

"when will exit fees on equity funds be imposed...?"


not too far away, marc.  not too far away.



Fri, 06/20/2014 - 22:01 | 4879774 Pladizow
Pladizow's picture

The reason for exit fees on bond funds is to scare assets into equities, as people act in anticipation of penalties.

The Fed wants inflows to equities and therefore has no reason to threaten exit penalties on them.

Fri, 06/20/2014 - 22:39 | 4879850 john39
john39's picture

It wasn't negligence on the part of the fed, but rather malicious intentional evil, with a goal of destroying the middle class.

Fri, 06/20/2014 - 23:12 | 4879914 Da Yooper
Da Yooper's picture

like I said the GDP dont have a clue




THEY will be the first to say




Mark my friggen words


you will hear this from EVERY liberal POS you know

Sat, 06/21/2014 - 04:47 | 4880162 mrdenis
mrdenis's picture

"Never saw it coming" .........

Sat, 06/21/2014 - 07:54 | 4880237 Scarlett
Scarlett's picture

Australia starts robbing its people


Government grabs $360 million from idle household bank accounts

Fri, 06/20/2014 - 23:55 | 4879950 DoChenRollingBearing
DoChenRollingBearing's picture

American Hard Assets, a bi-monthly magazine available at Barnes & Noble, is dedicated to exploring many themes of the fairly large universe of hard assets.  In this newest issue, there are articles on the American Gold Eagle, a history of the US Mint, "Good Delivery" gold bars, Mining News, prepping and even Bitcoin (two articles on this "hard asset").

The below is a review of this issue.

"Review of American Hard Assets -- June/July 2014 Edition"

EDIT: corrected link

Sat, 06/21/2014 - 07:38 | 4880223 kaiserhoff
kaiserhoff's picture

Why would I want to read a queer magazine?

Oh, that kind of bi.  Carry on;)

Sat, 06/21/2014 - 10:13 | 4880371 MeMongo
MeMongo's picture

"Bi-monthly" "hard assets" Ha I see what ya did there!

Sat, 06/21/2014 - 10:49 | 4880429 DoChenRollingBearing
DoChenRollingBearing's picture

I'm innocent, I tellz ya!  Innocent!

Fri, 06/20/2014 - 21:02 | 4879664 DaddyO
DaddyO's picture

I'm more and more convinced that an economic collapse of the FED and US economy is a long way off.

World events are leading me to believe that woar is going to be a better way to clear the balance sheet and debt ledger than hyperinflation or collapse.

Woar accomplishes all things at once, debt destruction due to destroyed countries, complete political collapse and implementation of militarized global governance.

If TPTB wanted economic collapse 2008 would have been ideal, instead they raped the taxpayer and continue to do so to this very minute.


Sat, 06/21/2014 - 00:03 | 4879967 Squid-puppets a...
Squid-puppets a-go-go's picture

oh contrar

war will be the distraction from hyperinflation, not the alternative

and america is collapsing/has collapsed. already. done deal

dont look to the stock market to disprove it. Venezuela's stock index is up, what 450% or something

Sat, 06/21/2014 - 04:46 | 4880160 Luckhasit
Luckhasit's picture

Instead of failing apart from the outside in, America has already collasped from the inside out.

Sat, 06/21/2014 - 07:14 | 4880199 what's that smell
what's that smell's picture

potus is a puppet. the teleprompter tells him what to say.

Those who have the power to print money at will are the powerful.

"it's the welfare queens, the liberals, the tea party, the unions, wall street, potus, scotus, scrotus...."

no. the problem is infinite fiat and usury.




Sat, 06/21/2014 - 04:53 | 4880164 Winston Churchill
Winston Churchill's picture

Always has.If you complain about the hyperinflation you are unpatriotic.

Sat, 06/21/2014 - 09:09 | 4880296 Miggy
Miggy's picture

They want economic collapse only when the pillaging is over. Not there quite yet.


John 3:16

Fri, 06/20/2014 - 21:04 | 4879669 SuperRay
SuperRay's picture

"…in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying."

—Adolf Hitler , Mein Kampf, vol. I, ch. X[1]


How many 'big lies' are out there right now?  Too many to count...


the CIA is working to protect American Citizens

The Fed...

The entire two party system..





Murrah bldg

Boston Marathon

Sandy Hook



It's fucking over, dude..  check, please...


So here's this moronic talking head trying to be impartial?

And even though the facts are brought clearly to the entire CNBC audience (all 6 of them), no one can shake themselves out of their trance and see the truth...


people get ready, there's a train a comin'

and it's packed with nuclear bombs..

Fri, 06/20/2014 - 22:17 | 4879808 zookeep
zookeep's picture

We still got Orange is the New Black and Game of Thrones. Life is good.

Sat, 06/21/2014 - 05:30 | 4880177 Moe Howard
Moe Howard's picture

GoT ended for the season. The plebes are restless.






In the midnight hour, she cried moe, moe, moe

Fri, 06/20/2014 - 20:45 | 4879624 kaiserhoff
kaiserhoff's picture

Damn straight.

He even speaks gute Englisch.

Fri, 06/20/2014 - 20:44 | 4879626 Aussiekiwi
Aussiekiwi's picture

Soooo, more of the same, for ever and ever.

Fri, 06/20/2014 - 20:44 | 4879627 BobTheSlob
BobTheSlob's picture

So the HNIC got it wrong. Why does that shock anyone. The Son of Frank Marshall Davis...ripe with error...achieves failure yet again.

I'm (not) shocked!

Fri, 06/20/2014 - 20:44 | 4879628 BlueStreet
BlueStreet's picture

As Fleckenstein said on KWN yesterday, 1+1 always equals 2. 



Fri, 06/20/2014 - 20:45 | 4879630 BobTheSlob
BobTheSlob's picture

This is the New Amerika where 1+1 = keel the bourgousie!

Fri, 06/20/2014 - 21:07 | 4879675 sunny
sunny's picture

That must be why the markets are setting all time highs, one after another.

Sat, 06/21/2014 - 04:56 | 4880165 Winston Churchill
Winston Churchill's picture

Room 101 is an app for that.

Fri, 06/20/2014 - 20:49 | 4879637 Ward no. 6
Ward no. 6's picture

i like marc faber

Fri, 06/20/2014 - 23:18 | 4879926 CheapBastard
CheapBastard's picture

Interestingly, Bill Gross said the same this week; the inequality is too great and this is serious since buying power decreases and less 'things' will be bought resulting in a slower economy. He seemed to favor increase minimum wage and tax rate on the Uber Rich like himself.

Sat, 06/21/2014 - 00:40 | 4880010 Oldwood
Oldwood's picture

Liberal policies are never wrong, they just seldom work as billed. That must mean that the "unintended consequences" were the plan all along.

Sat, 06/21/2014 - 00:57 | 4880034 Anusocracy
Anusocracy's picture

Government policies are what created the uber rich.

No intelligent person would ask for more .gov to fix that.

Fri, 06/20/2014 - 20:50 | 4879642 Escrava Isaura
Escrava Isaura's picture

Oh boy! Will we ever learn anything?

Rent Seeking….. Stupid!

Bretton Woods:

“The United States would use the convertible financial system to trade at a tremendous profit with developing nations, expanding industry and acquiring raw materials. It would use this surplus to send dollars to Europe, which would then be used to rebuild their economies, and make the United States the market for their products. This would allow the other industrialized nations to purchase products from the Third World, which reinforced the American role as the guarantor of stability. When this triangle became destabilized, Bretton Woods entered a period of crisis that ultimately led to its collapse.”

Fri, 06/20/2014 - 20:51 | 4879643 3rd Pig
3rd Pig's picture

They are starving us to death... this is Genocide.

Janet Yellen is a war criminal.


Fri, 06/20/2014 - 21:06 | 4879671 Urban Redneck
Urban Redneck's picture

Since ISIS just announced PM confiscation, I would assume any debate about which war criminals' payroll they're on can be settled.

Sat, 06/21/2014 - 05:32 | 4880178 Moe Howard
Moe Howard's picture

Not only that, but they hate cigarettes. The burn them like the Nazis burned books.

Fri, 06/20/2014 - 20:58 | 4879646 TeethVillage88s
TeethVillage88s's picture

Simplified Fed Mission

Keep people from getting out Pitch Forks

-Sluggish Economy is the best way to do this
-Fewer US Exports is part of the strategy
-Doesn't matter if fewer play stocks
-Wall Street = Our Customer
-Cartels = Control
-Growing Big Corporations = US Growth
-International Borders Do Not Exist
-Unemployment = New Normal
-Rape, Pillage, Plunder, Win

In Other Words: Hyper Inflation is the only worry, when people get out pitch forks.

Fri, 06/20/2014 - 23:45 | 4879952 Da Yooper
Da Yooper's picture

The effen Fed


best be real




it is getting time to play pitchforks & bankers & politicans

Fri, 06/20/2014 - 20:55 | 4879649 seek
seek's picture

I wish they'd stop using "dilemma" like the Fed is facing options that it's somehow been cornered into.

The current situation is by design. It's not a dilemma, it's by intent. What is happening is exactly what they're trying to make happen.

Meanwhile the same thing is going on at the border. There's literally a build-up of thousands, if not tens of thousands of people, mostly children, there because they're being encouraged to come, again by design, specifically to fulfil a Cloward-Piven strategy. You can look at virtually anything that's "broken" in the US and with very little digging find some government type that's intentionally fucking things up.

You can look outside the US and find the same goddamn thing: want to fuck up the global economy? Blow up energy prices. What's happening in the Ukraine and now in Iraq? Starting shit (via US trained and funded proxies) to blow up energy prices. 

There's no dilemma! The fuckers are tryng to blow up the system so they can propose a global replacement that only they control, and that no one can escape, because it's global. And they won't be happy until the standard of living in the US and in Uganda is equal, and there's a lot more of dragging the US down than bringing Uganda up in that little formula.

Fri, 06/20/2014 - 21:20 | 4879691 TeethVillage88s
TeethVillage88s's picture

on Janet's Latest Comments

changing the subject maybe

-Like boss came to her & said "Backoff" you are too specific, be vague
-Lying yes, ignoring facts, disregarding data
-simply show that someone told her to back off
-Previously she was saying things that were too specific about QE Tapering and end of ZIRP

I agree it seem Government & Fed deliberately are damaging programs, wasting money, hiding what they are doing

Fri, 06/20/2014 - 21:44 | 4879731 JuliaS
JuliaS's picture

Correct. The Fed has no dilemmas. The dilemma is ours - that we keep putting up with criminals in power. Here, the civilian population possess enough guns to take out a medium-size country, yet they're all pointed at eachother. The only time crooks get justice served to them, is when a friend higher up the food chain doesn't get his bribes on time.

The Fed does nothing. The system's on autopilot. Sign a deal with the government, lend 1st interest-bearing dollar into existence, sit back and relax for the next 100 years until everything worth owning becomes yours.

Fri, 06/20/2014 - 22:06 | 4879783 OldPhart
OldPhart's picture

And if you think the current border situation wasn't planned, check this out and note the posting date.

Escort Services for Unaccompanied Alien Children

Fri, 06/20/2014 - 22:39 | 4879855 IndianaJohn
Fri, 06/20/2014 - 22:11 | 4879795 Hayabusa
Hayabusa's picture

Seek is exactly right... nothing in politics happens by accident, it is planned.

Stupid sheeple are being herded like cattle or lemmings and are so into reality

TV, sports, etc., they don't even see it coming.  Of course those driving us off

the cliff will blame us in the end and the sheeple... will accept the blame... out

of sheer idiocy. 

Fri, 06/20/2014 - 22:12 | 4879799 KickIce
KickIce's picture

Absolutely, horrible misspelling of objective.  The only dilemma is keeping the sheep in the game to get fleeced.

Fri, 06/20/2014 - 22:37 | 4879845 IndianaJohn
IndianaJohn's picture

Try a dill-enema.

Fri, 06/20/2014 - 22:14 | 4879803 Hayabusa
Hayabusa's picture

Seek is exactly right... nothing in politics happens by accident, it is planned.

Stupid sheeple are being herded like cattle or lemmings and are so into reality

TV, sports, etc., they don't even see it coming.  Of course those driving us off

the cliff will blame us in the end and the sheeple... will accept the blame... out

of sheer idiocy. 

Fri, 06/20/2014 - 22:39 | 4879854 Not My Real Name
Not My Real Name's picture

Speaking of all those children on the border ... it looks like it was all planned in advance. Homeland Security was soliciting on Federal Biz Ops bids for a company to handle 65,000 unacompanied alien minors back in January.

Fri, 06/20/2014 - 22:50 | 4879883 Escrava Isaura
Escrava Isaura's picture


Agree with you on intent… However,

Have you considered that TPTB can’t tell us straight about oil and natural-gas been finite resources…. That can NO longer grow?

Sat, 06/21/2014 - 08:58 | 4880291 buzzsaw99
buzzsaw99's picture

There's no dilemma!

damn straight. they want higher prices and lower wages.

Do NOT follow this link or you will be banned from the site!