Faber's Latest Rant On Global Monetization Wars
There is a little for everyone in Marc Faber's latest appearance on CNBC. The infamous boomer (and doomer) believes (as we do) that today's downgrades are less significant for stocks (at least until the realization that banks and more importantly insurance companies are about to be cut as well - keep a close eye out on Allianz and Generali (of ASSGEN fame) - it is not incidental that they are abbreviated to A&G, just one letter away from our own AIG) as it is largely priced in but the equity market's rally of the last few weeks (with its lack of breadth and volume) is strongly suggestive of a bear-market rally (as opposed to the decoupling bull market that so many hope for). His view quite simply is that the ECB has undergone a backdoor monetization and without this the EUR would be significantly stronger especially given the huge short-interest (though he sees the trend for EUR is down). However, he remains unenthusiastic at the inevitable outcome - suggesting the majority of European nations deserve a CCC rating (which is clearly not priced in) and that the USA should not be AAA (noting that even Germany has huge unfunded liabilities as it writes check after check to save its socialist sorority sisters).
Admitting that he was wrong on US Treasuries (short) last year, he still worries of the long-term value in holding the ponzi-paper and addresses what seemed like the theory-du-jour that a weaker EUR is good for European exports and so all-is-well in the world by pointing out (among other things) that many large European corporations have huge amounts of USD-denominated debt making their debt servicing costs much higher. His perspective on Europe is interesting, concerned that we may see one country say enough-is-enough and leave the Euro, he believes the US outperformance over Europe will unwind and that quality companies in Europe and Emerging Markets are the place to be for investors. Noting that they are admittedly not compelling values he points to the difficulty of valuing anything in a zero-interest rate environment. The worse the global economy looks, the weaker the Chinese economy performs, and the more the reaction will be money printing which will lift equity prices (whereas the real economy is faltering and standards of living going down fast) leaving him holding gold at the core but realizing stocks will rise nominally.
Finally, his "black swan" scenario is some country saying "we've had enough. We are exiting the euro." Which brings us to the issue of the Greek coercive restructuring which now appears to be just a matter of weeks if not days away. And once Greece pulls the plug, and the Eurozone does not implode (hypothetically), it will set an example whereby more and more countries do the same, until finally the system does crash under its own weight, as everyone does a CDS-triggering restructuring, in effect tearing the Eurozone from the inside.
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Gold is worthless in case you didn't get the memo...
http://seekingalpha.com/article/319486-why-gold-related-investments-are-slowly-becoming-worthless?source=yahoo
Oh yeah... BITCHES!!!! Almost forgot.
The answer to this ratings business is simple. After everyone gets cut just take the highest rated countries (perhaps by then CCC is the highest), re-rate them to AAA to reset the highest standard, and then everyone wins. Easy!
Edit: By the way, that article on Seeking Alpha is very funny in how clueless it is. It seems like either a joke or the term paper of a wanna-be Keynesian economist.
Just wait 'till this drama hits the US (again).
Debt Chaos, Financial Repression and Gold
http://seekingalpha.com/article/319405-debt-chaos-financial-repression-and-gold
Physical GOLD!
Yeah. PMs for sure. Which shows that ZEROHEDGE READERS SEE FURTHER THAN FABER & THE TYLERS's -
"...many large European corporations have huge amounts of USD-denominated debt making their debt servicing costs much higher ..."
Yeah. Right. For about two seconds - until the USD drops again - for an abundance of reasons well known to all here not the least being the next US FED RES easing/printing/monetizing/QE asset purchases blablabla, US debt, US trade deficit, US wars ad infinitum, US brain drain etc etc ....
REMEMBER: EU STILL MAKES THINGS PEOPLE ALL OVER THE WORLD WANT -
US ONLY MAKE THINGS IT FORCES UPON PEOPLE ALL OVER THE WORLD
AND - EU IS YEARS BEHIND US WHEN IT COMES TO PRINTING...
Advocating adequate insurance in form of PMs is intelligent - EU bashing, is not.
"My fiat is worth more than your's!"
"No it's not!"
"Yes it is!"
"No it's not!"
"Bet ya an ounce of gold!"
"On."
*WINNER* that is all it really is BC. A pissing contest.
But for anyone who has not yet done so, I recommend googling Pure White Boy Account, Quadrillion Dollars and C of 300. A lot shall become a lot murkier. :-)
And I would not really trust a Swissman. He is right only twice in a grand cycle. Like clockwork. And he is perhaps wrong about gold.
ori
-vishwakarmas-pyr-cone-amid/
Yes, he could be wrong on Gold. But my guess is only so wrong. Because he is right about the race to the bottom.
Ben Bernanke cares not about how much he needs to print. Ben's perspective is that if we need to. We will be Zimbabwe to get the job done.
And on that thought, when has the FED ever pulled the printing press in time. It has always been late to that game.
My belief at present is simply this, It will be the white metals that will win either way.
Take your pick, mine in order of the best to invest are: Palladium, Silver, Platinum and Rhodium. Then the "Rare Earths".
I will either be very wrong or very rich. But that is what I am doing to protect my wealth achieved through my labor.
Good Luck all who want to survive the fact that the U.S. is now "Worse than Japan' now".
Marc Faber rocks - it's worthwhile to listen to him
eureka, relax - "EU bashing"? we are in the middle of a currency war where the "winner" is the one that devalues most - if you are convinced that the bearish outlook the US has (ZH is merely reflecting this) vs "all things beginning with eur-", which, by the way, includes you, is wrong, then buy the misvalued assets...
If you are suggesting that Europe will somehow survive this fiscal storm because of the underlying strength of its industries, think again. Nobody gets out of this unscathed but PM holders. Nobody.
We are all going to devalue our fiat and peg to the SDR, a new reserve currency denominated in gold. We will devalue, and devalue, and devalue until this is all over.
Yeah sure you can extend pretend, and then take the CCC countries call them AAA and of course in order to deal with the fact that they just don't have the cash by printing that cash. Here is the catch to your Ponzinomics: So far, ratings agencies have been dealing with debt purely as a numerical problem. i.e. France owes you a hundred Euro, S&P rates the probability of you getting your 100EU back. Wait until they start factoring currency risk into account, as in printing the money they owe you. You lend them 100EU, but the 100EU they pay you back is worth less because the currency has been diluted. If fact it is diluted with every interest payment. This is currency risk. And D is the rating you get under such a scheme. Incidentally, this idea of yours in a way, just ties sovereign debt to the currency, therefore your currency is as good as your debt. i.e. D. Or more like W for Weimar.
What a great deal on Greek 1 year bonds! Paying 408% !!! What could possibly go wrong?
If MF Global and fearless/clueless leader Corzine were still around he would be backing up the truck!... make that leveraged trucks.
that tells you all banksters do is bet on bail outs.
Without bail outs. bankster bonuses and wall st. establishment is done for good.
best time to start a new bank.
Lol, relax dude.
I'm sure everything is just fine over in FrAA+nce.
France should be BBB+ at most. No it's not fine in France, the farce just keeps going.
Seeking alpha carefully edita articles for spelling and grammar and correct links. Useful content is low on their radar screen :)
Don't forget propaganda.
@FS
"Reset" as in the continuous printing of money also? This is a fun game isn't it?!!
What the fuck is this guy ranting about? He is so out of touch that you basically have to explain the world to him from the Big Bang onwards. I loved it when I read something along the lines "as the banking system becomes more modernized gold will become less relevant". WTF? What sort of modernization does he have in mind? Modernization along the lines of "financial innovation" (MBS/CDO/Structured crap) or what? The man is a serious quack that really does not know what the hell money is. He is totally out of it. Totally.
Modernization definition: Our newest scales, based on the Java upgrade 8.1.3x, show us that a pound of gold is worth less than a pound of good ole fashioned paper with presidents' faces on them...................
I'm the proud owner of 2, 100Trillion Zimbabwe notes...
Damn, you have been giving away the 20 you got on eBay faster than I have.....
Yes Agent Default, he is blind to the game bankers play, moving between systems based on gold and systems based on paper. They steal and cheat as much as they can, and when the system comes to an end, they get ahead of everybody else just before the new system comes into existence. Gee, we are on a paper system now, I wonder what the next system will be based upon?
Alan Greenspan says it's going to be gold.
Ben Bernanke, in his 11/21/2002 speech, says it will be gold.
They are buying gold.
They have no other place to go.
This douche on Seeking Alpha is a complete idiot.
Gold has "nowhere to go but down", and presents a series of rationales for this that are the spewings of a total fool who has done zero research on what he spouts. What an absolute waste of time reading this.
He's undoubtedly a fanboi of Jon Nadler.
Complete and utter idiot. He has no clue about gold. He just assumes everyone will love to take fiats forever. Did he hear of the MFGlobal debacle? He is correct in one thing- nobody should hold paper gold claims.
...but what about, "...modern dentistry now relies on other commodities for false teeth."? Huh?
By the way, the author of this hysterically funny little ditty spent $1.7 million of his wife's (Chicago lawyer) money in his failed and stupid 1998 campaign for governor of Alaska and garnered a whopping 39,000 votes.
Actually all both you and Mr. Faber needed to say was "the Americans will win"
Which Americans? The Bernank and the cronies, or the ones getting flayed by these policies so far?
how dare you engage in war of printing with the Americans! We still have VAST FORESTS due to the foresight of creating a NATIONAL PARK SYSTEM. ... Ha!
They're all pledged to the U.N.
There's a nice little plaque saying so in each park, in an inconspicuous place at the welcome center.
Check it out.
Diabled Vet above was funny and you UP F, are chillingly correct. What a tragi-comedy!
ori
That Mandy on CNBC looks like a right dirty whore!
Some of us guys ou here like the "just got f'd" look :) !
they want all their employees to dress like their employer
Man, on first read I thought you said "God" was worthless. I was nodding my head in agreement and pointing toward the up arrow when I saw the link to seeking alpha, and I thought "how could SA be cognizant of such meta-physical matters?"
After reading the article the first supposition perhaps makes more sense.
Thanks for the article - f'n hilarious! What a douche. Love commenter on the price of gold being pegged to false teeth!
"The long-run decline is under way for a number of reasons. For example, modern dentistry now relies on other commodities for false teeth."
Funny as shit, right?
I have two gold lower molars (crowns).
The gold is THE BEST option hands down.
I've had numerous dentists tell me that porcelain usually lasts ten years before it gets a crack, 15 years if you are lucky.
Several said they see senior citizens with Gold crowns that are 30-40 years old and no problems.
And, what else would a pirate have in his mouth?
Arrrrgh! His shaving sword in his mouth.
i read that seeking alpha bullshit; the guy is a retard; the supply of gold is not more than demand. The most prosperous mine in South Africa has to dig 10mX10m for one ounce of gold. and that is hundreds of feet down in the ground; surface gold is almost non-existent at this point.
RSA has mines that are over 2 miles deep. Insane depths to go to just to get teh goled
Stu Pedassle,
This is what I replied to the author of the SeekingAlpha article on "worthless" Gold:
"So with all those trustworthy banks and wonderful stocks out there, everyone in the world will feel safe and secure with their assets existing as binary data in a database somewhere and not be interested in Gold, Silver, Diamonds?
Kind of like saying: "With all the porn on the Internet young people are going to stop having sex."
"Never try to teach a pig to sing. It is a waste of time and it annoys the pig."
That guy is a sheep.. you can try to lead him to greener grass.. but his ability to NOT! Comprehend may surpass your ability to communicate..
I posted a response about the Monetray Growth and Central banks being buyers... along with russia.. or iran.. or china.. or india..
but it will make no difference..
contagion with regard to the $10 Trillion in Euro-Sov Debt held by U.S. banks.. means nothing as well I am sure.
Nope..... You are right! For the last 5000 years it has been worth fuck all, no wars have been fought over it and people give it away for free.. Now.... With PAPER...... There you have something of real value.
Yeh! ....... PAPER BITCHEZ!!!!
Hahahahaha
K@
Faber has been on the money. Pay attention to what he has to say.
Pandora Style Beads
That was, quite possibly, the most awesome Gold-bearish article I have ever read....
"Over the long term, the price of gold can only go down as miners are unable to find new reserves and shut down, and as Central Banks sell their gold reserves into the open market..."
Wow.
The author totally leapfrogs the relativity between general price levels and global currency supplies. It is almost as if he is declaring to the reader that inflation does not exist, and in fact has NEVER existed.
I'm going to go read it again.
How will CDS pan out once Greece defaults. Lets suppose that one Creditor is unable to pay the amount owed on its CDS obligation. Does fear and Panic take hold as investors realize that CDS just might be worthless? Surely a spark of fear would drive up Sovergn interest rates as bond holders start unloading them or even stop buying more bonds. Would the ECB or the Fed step in time to save the day?
.
Everything he says makes perfect sense; except for beating the "emerging markets" dead horse; which in his case translates to China. Just in case anyone reads my opinion; remember it's your money you're dealing with, and who knows what's going on in China? Honest Answer, nobody, and that includes the Chinese.
Credit ratings bias & hype... delusional paper illusion.
"QE to infinity, because there is no other alternative."
- Jim Sinclair, JS Mineset
http://www.scribd.com/doc/77947527/CMA-Global-Sovereign-Credit-Risk-Repo...
Enjoy
PP
This is where I think Reggie is ahead of the curve as well - the real weak spot are insurance companies. Talk about leverage.
Therefore, I bailed out of my paid-up life insurance policy with AIG and my variable annuity with Allianz in 2008. Early, but maybe not wrong. I sleep better at night.
Hmm, I am having the same thoughts. Cash value whole life ins. is non-taxable (I think) ...for now. Let's see, that 10-20 acre farm may be the better insurance. Don't want to get too big and slug it out in the commercial farming business- the corporations are too big, the commodities exchanges are too unpredictable. Just big enough to rotate plots and let some land lie fallow and recover, have some that is wooded, and not so big that you can't "defend" it--from poachers and the like? ...No. From the government. When they come to collect their tax. If you can't pay it...they can take it.
Damn, shssss about buying and holding gold. I'm trying to buy some and you guys are going to talk the price up before I can ammass my uh hoard.
well just to keep you on track you want an Au hoard and not an Uh hoard. :)
- your friend, Smaug.
Mandy gets the interview....where's her makeup? Heh heh....
Oh, and while watching any Faber interview, it's best to play the Terminator Theme Song behind him while he speaks.
Instead of "Fuck you, asshole" we have "Bernanke is a Liar!" /cue Beatles audience of girls squealing!/
I'm going to get a hair cut tomorrow. I think that this will be a positive development.
So, you own a ton of Greek bonds?
No, like I'm going to get my hair cut ...
Do they have " Rickshaw" parking at " FED & ECB" ? They're going to need it when crude goes to 150-200 bbl after all this PONZI printing!
This is my neighbor:
She's single...She lives right across the street.
I can see her house from my living room.
I watched as she got home from work this evening.
I was surprised when she walked across the street and up my driveway.
She knocked on my door...I rushed to open it.
She looks at me, and says, "I just got home, and I am so horny! I have this strong urge to have a good time, get drunk, and make love all night long!
Are you busy tonight?"I immediately replied, "Nope, I'm free... I have no plans at all!"
Then she said, "Good! In that case, could you watch my dog?"
MAN... IT'S NO FUN GETTING OLD!!!
Being old is not a problem. She was going at Berlusconi's bunga bunga.
things are getting interesting...Let me know when january is over.
Evans will tell you how bad the US economy is. He must be day trading with AAPL.
...Zee veekness of dee Euro vill continue it's slide down ...and vee vill all perish in zee vind. http://www.youtube.com/watch?v=GiwKb-x7wXQ&feature=related
Faaa ber ...Mark Faaber ...Faber. Forgive me, just like saying the name. Faaber Faa ber ...Mark Faber.
Awe, lighten up Mr. Down arrow, twas a joke. Faber is alright man.
Friday the 13th Black Swan?
Failed Russian space probe plunging back to EarthA stranded Russian science satellite, loaded with rocket fuel for a roundtrip mission to Mars, is expected to plunge back to Earth on Sunday
The 14-ton spacecraft, which includes about 11 tons of toxic rocket fuel, is expected to re-enter the atmosphere Sunday or Monday, the Russian space agency Roscosmos said in a statement on Friday.
Due to constant changes in Earth's upper atmosphere, which is strongly influenced by solar activity, the exact time and place of the satellite's return is unknown.
http://www.reuters.com/article/2012/01/13/us-space-satellite-idUSTRE80C2...
CE... ok, I'll play along... Where would you like it to land?
Well it won't listen to me. But I think the point is that they were already wrong about the date. Now they're admitting they're wrong about the location (Atlantic ocean off Argentina) and it is loaded with fuel (unlike all the other space junk that has plunged back so far). So wouldn't it be just right for Friday the 13th and the bizzaro global situaiton for it to fall right on top of a nuclear power plant?
Either that or right on top of the Fed's money printing operation. Now THAT would set off global panic (definitely bankers jumping from windows). Long hard hats
lol... I vote for door number two... Feds money printing operation.
Although for swift and certain justice to be done... it will fall on Corzine, where ever he happens to be.
Divine intervention?
Love it. You got my vote :-)
I'd like it to land in my back yard, say a quarter mile or so from my house.
Then I could sell the pieces on eBay.
It should land rather intact. It has " HeaT Shields" , made from U.S. treasury " Printing Plates"...
I wonder how the honorable mr. corzine is doing? We haven't heard much about him lately. I hope he is holding up okay with the extra added pressure of his new found 1.2 billion. I'm curious...do you think Obummer will try to hit him up with a wind fall profit tax? Is there a place on the 85,000 pages of tax code to claim...er I mean write off 1.2 billion of new...I mean lost stolen funds?
Corzine is using leverage, and customer funds, to purchase Greek 1 year bonds paying 408% interest... thats right, four hundred and eight per cent.
How could anything go wrong?
Corzine is a liberal so his brethern in the MSM do not hound him everytime he leaves his house or office asking where he put the $1.2 billion. Pretty much a free pass from the MSM.
Look at Zimbabwe. The market is high and the currency is worthless. Bernanke and the Fed are following the Zimbabwe economic playbook.
Thanks for the tip on Zim playbook... and I was thinking they had no playbook.
As the dollar circulates widely in Zim maybe the US will begin using rubles or Euros or Yuan...
I'll stick with PMs... I can always trade them for whatever worthless fiat is being accepted at the grocery store.
If fiat is accepted to buy food, then it's not worthless.
If someone views something as worthless, it is worthless to that person.
it [Greece] will set an example whereby more and more countries do the same, until finally the system does crash
Been sayin it, the temptation of 90% currency deval will jsut be too much in countries with 20+% unemployment and plunging exports and nothing much else working. Eventually instability alone will becoming a pushing factor Argentina may the first to set the tone.
Argentina has certainly had plenty of practice the last couple of decades... you could definitely be right.
Exactly. And no allegiances. They can beggar anyone. PLus they have a drought
Quite important... tomorrow election in Taiwan. If the DPP wins, it could get dicey and make the currency wars even better.
The funny part about corzine is the trade is killing it - now :D
You guys will love this chart all times are ( GMT). http://www.forexpros.com/indices/indices-cfds This was 15 minutes after the N.Y. close. Pathetic! Click real time quotes> Indicies> CFD's
Even Faber got the simple calculus of biflation wrong: he and almost all of them didn't get it that both stocks and bonds can rise to extreme valuations under this scenario because bonds are pricing in deflation while stocks are pricing in inflation (QE and stupid Fed trix are under this umbrella). Unfortunately for the investor there is great risk in being caught on the wrong foot (lookin' at you David Faber and Bill Gross and...). Biflation is like bad weed killer to traditional investing, it'll kill everything it touches including the good grass and plants. It'll make fools out of all those who think the same old rules apply. The same contradictions we've seen will just get worse. But the snap backs will also be vicious.