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IceCap Asset Management: The Smiling Faces Of Ben Bernanke & Marc Faber

Tyler Durden's picture




 

From IceCap Asset Management - December 2011, The Smiling Faces Of Ben Bernanke & Marc Faber

Dr. Ben Bernanke went to school and never left. He is an academic who has never worked in the private sector yet controls the fate of trillions of Dollars, Euros, Yens and Pounds. Today he is smiling. Dr. Marc Faber also went to school, but he didn’t stick around. He has worked exclusively in the private sector and today is considered one of the most prescient investors on the planet. Today he is also smiling. To better appreciate all the smiling, one must understand exactly what happened or better still, what didn’t happen in Brussels last week. In the eyes of Dr. Bernanke and Dr. Faber, the historic 17th emergency summit meeting by the Europeans to solve their money problems went off without a hitch. Not only did the Euro-Elite fail to resolve their debt crisis, they failed miserably at even coming close to recognizing the problem. It’s this distinct lack of recognition that is turning frowns into smiles. Dr. Bernanke is smiling of course because he is a money printer. The continuing inability of the Euro-Elite to solve their problems virtually guarantees a 2012 recession in the Old World. In return, this will also create a recession in the US which will provide plenty of excuses for Mr. Bernanke to once again print money under the guise of QE3. Dr. Faber’s uncanny ability to understand the big picture and foresee the response from financial markets allowed him to predict the 1987 crash, the 2008-09 crash, and the resulting 2009 stock market rally. Dr. Faber is smiling today not because he agrees with Dr. Bernanke’s fondness for money printing, but rather because the global financial system is developing exactly as he has envisioned. This vision of course is a money maker for both him and his clients.

Full letter (pdf)

 

 

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Fri, 12/23/2011 - 00:01 | 2006367 zorba THE GREEK
zorba THE GREEK's picture

I have invested in PMs over the last decade, so I am smiling too. 

Fri, 12/23/2011 - 00:36 | 2006423 metastar
metastar's picture

Off topic, but very interesting anyway. Maybe some good news (or maybe not).

Cooking Fukushima Pasta with Arnie Gundersen of Fairewinds ...

http://fairewinds.com/content/fukushima-could-it-have-china-syndrome

Arnie is part of the army doing gods work.

Fri, 12/23/2011 - 01:28 | 2006496 Blank Reg
Blank Reg's picture

I'm going long on those famous 40 pound, self cooking Fukushima lobsters. Yum.

Fri, 12/23/2011 - 01:57 | 2006526 Manthong
Manthong's picture

The only solution that is not painful and does not involve huge write-offs and letting failures happen:

http://i41.tinypic.com/nv2z43.jpg 

Fri, 12/23/2011 - 06:26 | 2006658 Zero Govt
Zero Govt's picture

"..and then a miracle occurs.."

Or in the case of Ben Bernanke, having thrown $Trillions of printed counterfeit wealth to prop-up the unproductive criminal fraudsters on Wall Street and trashed productive peoples money a recovery occurs

Keep throwing counterfeit Fiat after bad (people) Bernanke ...sure it'll work one day on an off chance

Fri, 12/23/2011 - 00:09 | 2006384 Silver Bug
Silver Bug's picture

Dr. Faber has been correct many times in the past. I put my trust in those with a solid track record. Not the talking heads you see on the news.

 

http://silverliberationarmy.blogspot.com/

Fri, 12/23/2011 - 00:09 | 2006385 disabledvet
disabledvet's picture

I agree that a recession in Europe is not only guaranteed but quite possibly "well underway." Is this the same fate for the USA which "cannot generate inflation as well" which is unlike the entirety of Third World which does generate inflation on a daily basis? I imagine if we all bought into "The Gold Thesis" (that the price of gold must always rise) then of course I agree with this post. Having said that..."market experience" has taught me...ESPECIALLY THIS YEAR WHEN TREASURIES ARE THE BEST PERFORMING ASSET CLASS YTD...that predicting an entire asset class "moving in one direction" is something that can get...a little long winded and tendentious...after a while. NOT SAYING IT ISN'T TRUE of course. Just saying...as an ARGUMENT..."there's more to the price than being a bug." Indeed i've heard it said "you could put a bug in a man's brain and still not predict what he will do." Indeed doesn't human existence itself argue against such..."uni-directional thinking"? In other words "the one thing we all agree on at Zero Hedge is that anything is possible in the world we are living in today." I would add "treasuries have been rallying pretty much since interest rates peaked in 1981." That's quite a bull market! Not even gold can claim that throne. Just as obviously neither can equities. Those things have been "all over the map" lately haven't they! Stay diversified people! And if you want some quality reading material even though it's dry as heck try "Modern Portfolio Investing." Sure...Buffet made his billions investing massively in single stocks. While i wouldn't recommend that "he's still doing it"...this time with IBM. I agree "Bernanke is doing the same" but with Treasuries. But you and I don't have printing presses or insurance companies. And for all the money Bernanke is making "he still only makes what the government pays him." Not that i wouldn't take that job of course. Would i put the USA back on a gold standard? Not without the help of a General that's for sure!

Fri, 12/23/2011 - 01:40 | 2006509 jeff montanye
jeff montanye's picture

it depends on your timeframe:  treasury yields were 3% in the late 1940's.  they are 3% today.  gold was $35 an ounce then.  it's more today.

Fri, 12/23/2011 - 00:12 | 2006392 AC_Doctor
AC_Doctor's picture

Europe is definately the three little pigs house of straw...

http://farm1.static.flickr.com/169/381111864_b79534dfec.jpg

Fri, 12/23/2011 - 00:26 | 2006409 longonSpam
longonSpam's picture

Who in their right mind would be smiling about anything even if they were 99.9% PM stashed in the Joe Pesci Nicky Santori closet safe? Even if gold goes to a million its just a store of value. Put Faber in line for the Denogginater with the rest of em.

Fri, 12/23/2011 - 07:51 | 2006686 NuYawkFrankie
NuYawkFrankie's picture

Re Who in their right mind would be smiling about anything..

Spot on! When The Man comes a' callin - aint no one gonna be smiling!

Enuf said about Beranke - nothing to add that hasnt been said.

But here's something very strange about Faber - probably a combo of that smarmy smugness, insuffererable  delivery, the highfalutin "If you were only all just as smart as me" attitude (when a 5 yr old coulda predicted the 2009 rally etc).

And last - but not least, in my book - what the hell is a pudgy tub-o'lard, bald 60-odd yr old doin' gathering up his 17 strands of hair and into a scraggly attempt at a ponytail? Good grief!

.

Fri, 12/23/2011 - 00:32 | 2006427 Eireann go Brach
Eireann go Brach's picture

Faber reminds me of Dr Evil, Bernanke reminds me of a pathetic bald asshole professor that you want to punch after you graduate!

Fri, 12/23/2011 - 01:06 | 2006479 baby_BLYTHE
baby_BLYTHE's picture

Marc Faber when the 500+ trillion dollar deriviatives system implodes and takes down the entire economic system "Gold would have to go to $1 million dollars per ounce" (during monetary reset).

Fri, 12/23/2011 - 01:24 | 2006489 bpom
bpom's picture

The article states that "Dr. Ben Bernanke went to school and never left."  The Fed is certainly not academia.  Whether the Fed is defined as public or private or hybrid, I would consider Benny working for the Fed as having left school and not working in academia.  However, an "ad hominem" is always  good for a laugh.  I would be more inclined to ask the Doctor,  "Where did you go to school?" followed by "Why didn't you learn anything?"

Fri, 12/23/2011 - 09:27 | 2006781 jcaz
jcaz's picture

Dude- the Fed is the DEFINITION of academia......

Fri, 12/23/2011 - 01:54 | 2006522 AmenRa
AmenRa's picture

Marc Faber received a PHD in Economics magna cum laude from the University of Zurich when he was 24. So Faber has a PhD and works in finance while Bernanke has a PhD and plays in finance.

Fri, 12/23/2011 - 01:58 | 2006524 Georgesblog
Georgesblog's picture

So, Bernanke is a Dr.? Must be a Ph.d in B. S. Anyway, here's my opening rant for Friday. I hope you're as disgusted as I am.

Friday, Dec. 23rd, 2011 – Here it is, the end of the week, and I feel that I’ve accomplished nothing. I know that’s not true, but this lingering debt crisis lets the air out of everything. Not being one to let those thoughts rule over me, I have to put the thing in perspective. I took the claims that have been made, and measured them by the actual results. That raises pertinent questions about the outlook for the future. Taking the statement that 2011 is 4 times worse than 2008, can we expect that 2014 will also be 4 times worse than 2011? If so, the $16 Trillion that the Fed printed out of thin air, to get into this crisis, multiplied by the projective factor of 16 times the amount of Fed issued bailouts, we can ask if it will require $256 Trillion to “fix” the inevitable 2014 crisis. That’s a fair question, since real people have to do real work and never see unthinkable numbers like that, on their paychecks. The Fed painted the economy into a corner with a broad brush, in 2008. In 2011, will U. S. taxpayers stand in the corner, while Ben Bernanke empties the paint can on their shoes?

http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/

Fri, 12/23/2011 - 02:13 | 2006543 whatsinaname
whatsinaname's picture

feel the same way..

Fri, 12/23/2011 - 02:14 | 2006546 Occams Aftershave
Occams Aftershave's picture

You are right.   Bernanke's first two initials actually are "B.S."

Fri, 12/23/2011 - 05:25 | 2006633 The Alarmist
The Alarmist's picture

So, Bernanke is a Dr.?

Well, he's not a real Doctor!

Fri, 12/23/2011 - 02:01 | 2006532 illyia
illyia's picture

A charming piece. Thanks, ZH.

Fri, 12/23/2011 - 02:32 | 2006553 cranky-old-geezer
cranky-old-geezer's picture

 

 

Last 3 years has been an education for lots of us, and the consistent pattern we've seen is (a) governments / banks approach default, (b) liquidity dries up, (c) crisis is declared, (d) central banks print.

And it's gonna be that way from now on.  Because there's nothing else they can do.

QE3 is already happening in America.  EuroQE is already happening.  JapQE has been going on 15 freikin years.  ChinaQE is cranking up.

And yes currencies get debased in the process.

 

Fri, 12/23/2011 - 03:23 | 2006576 green888
green888's picture

Send a bit of Christmas cheer to ZH, soon to be worth less $s would be good 

Fri, 12/23/2011 - 07:18 | 2006674 SilverShortage
SilverShortage's picture

http://marcfaberchannel.blogspot.com

Marc Faber : .....But I have to find out, I have one concern about gold, I was recently in Taiwan and South Korea at two large conferences. Nobody owns any gold. Gold is owned by a minority, even in the U.S. Most people in the U.S. have no clue what an ounce of gold is or looks like in the vault. The same in Europe. And in a democracy, it is very popular to take away from a minority. Like in Switzerland we now have a new state law that is being voted about in a few months that anyone who has assets of over $2,000,000, who dies and passes on these assets to his children, he will have an estate duty of 20%. Now most people in Switzerland, they do not have assets of $2,000,000 or $2,000,000 Swiss Francs, so they say yeah, good idea, we tax the rich. Then next year, I can come and introduce the referendum that says, everyone who has assets of say over $50,000,000 we tax him 50%. I know people who will say who has $50,000,000 dollars in assets, very few, the people will accept and vote for it. Now next year I can come back and have another referendum, everybody who has assets of over $900,000,000, we tax them 90%. And this is what the tyranny of the masses can do. You can make it appetizing to the masses, by just taking away from a few people. But I am worried most about, in the case of gold—not the price, that I am not worried—but I am about government taking it away.

Fri, 12/23/2011 - 08:45 | 2006711 Former Sheeple
Former Sheeple's picture

I agree with Faber on this - but I do not think it will be outright confiscation. I think it will go down something like:

 

Evil greedy speculator caused all commodities like gas and corn & wheat to skyrocket, which causes pain at the pump and grocery store where the average person actually sees inflation. We have to put an end to this wild speculation which is creating market bubbles and volatility, therefore we are imposing a 90% tax effective 1/1/13 on evil speculator who do not have legitimate commercial purpose.  (Insert other popular themes/propaganda here: “middle class” “1% v. 99%” “working families v. Corp. America” etc...)

 

In my view, this shakes the gold and silver tree hard; many will sell in December 2012 to avoid the tax increase. JPM and other will have maintained their ability to manipulate (because the commercial purpose language will provide the exception); the people feel the politician’s are actually doing something to help, so they “buy in”  blah, blah, blah…

Merry Christmas to Tyler(s) and everyone here!

Fri, 12/23/2011 - 09:59 | 2006845 itstippy
itstippy's picture

An entirely possible scenario, well articulated.  +1

The millions of 401K holders who have put their life's savings into a mutual fund that's 80% U.S. equities consider themselves "investors".  They believe that buying stocks of U.S. corporations helps to fund these corporations, allowing them to expand and create jobs and keep America strong.  It's the patriotic thing to do!  They expect to receive 8% annual return, actual, after factoring out inflation.

They don't understand that buying stocks other than an Initial Public Offering raises no capital whatsoever for the company.  When one buys CocaCola stock, one buys stock that's been around forever.  CocaCola Company doesn't get any money from your purchase; the guy who sold you his CocaCola stock does.  You're simply speculating that shares of CocaCola will increase in value and you'll make money.  Further, by expecting growth and dividends, one encourages the underlying company to offshore its operations in order to increase profits (evil and unpatriotic!).

Basically, putting your money into a stock-based mutual fund is just as speculative as putting it into commodities.  The concept that buy-and-hold stocks is "investing" and therefore inherently good, while buy-and-hold gold is "hoarding" and inherently bad, is a crock of hooey perpetuated by the  stock brokers and financial advisors of this country.  It's all specualtion with hopes of generating what the tax man calls unearned income.  Putting your money into a savings account at the local bank, or buying corporate bonds, is investing.

Don't get me started on U.S. Treasuries.

Fri, 12/23/2011 - 10:37 | 2006946 Former Sheeple
Former Sheeple's picture

Tippy, I agree with you as well.

 

While 401(k) speculation is "ok" because those are middle class folks just trying to "get ahead" the hypocrisy will likely be lost on those folks as they target the commodity speculators (and they won’t specifically list Au & Ag, but that will be their target. They will use commodities generally as the cover story). Since so few people actually own physical gold and silver they won’t care - because it doesn’t affect them. I know people who are in the 47% of US citizens who paid NO federal income tax, and they will blather that the rich don’t pay their fair share (evidently feeling that their $0 contribution is fair???)

 

One funny part I’m looking forward to, is when this spins around and bites some of the union folks on the ass. I'm not anti-union, I’m anti public sector union because there isn’t a balance of power. The donate to a politician, who then gives them whatever pay and benefits they want, and we pay the tab. When real austerity hits, at the federal state and local levels - the choice is going to be (honor the promises and unreasonable pay and benefits of the public sector union folks, who will be a very small percentage of the population and tax the daylights out of the majority, OR screw the very small % of union folks, cut pay and benefits and save the overwhelming majority of taxpayers.

 

I just think politicians are paying the numbers - if I screw the 10% highest earners, the other 90% can still vote for me. When real cut come the public sector unions will be portrayed as the 1%. Grenade math (300 million US population, 3 million federal employees) the recently discovered 1%.

 

I also agree with the poster below on the rule of equal justice under the law. Just contrast Ken Lay from Enron, Bush on Board  at Silverado Savings and Loan, and pretty much the absence of MSM coverage on Corzine at MF - these guys are much bolder, doing daylight robberies now because there are no consequences for them!  

 

 Anyway, I should stop and get in the x-mas sprit, so Happy Holidays to all!

 

Fri, 12/23/2011 - 21:21 | 2008604 longonSpam
longonSpam's picture

How is a savings account investing in this day & age? "ALLEGED" interest 0.03%, really -1%-3% once they finish screwing you on bank fees, jumps to pushing -10% once you factor real inflation AND its next to impossible to close an account because they're all terrified of the run plus they bang you again with a bullshit fee just to give you your own money back. Honestly if you're in that big a hurry to piss money away take the difference, get some good coke and at least get some enjoyment out of it.

Fri, 12/23/2011 - 09:59 | 2006847 gina distrusts gov
gina distrusts gov's picture

What  we are seeing is  the end of the republic  or plainly put the end of the rule of law applied to all equally.

Sat, 12/24/2011 - 00:45 | 2008837 ThrivingAdmistC...
ThrivingAdmistCollapse's picture

I agree.  The republic is dead at this point.  We are living in a corporate oligarchy, and perhaps only a full on economic meltdown can restore our democratic system.

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