Marc Faber To America: "Listen You Lazy Bugger, You Need To Tighten Your Belts, You Need To Work More For Lower Salaries"

Tyler Durden's picture

Once again, the latest fire and brimstone sermon by Marc Faber is absolutely spot on, starting and ending with his "policy" recommendation for what the US needs: "I will tell you what the US needs.  The US needs a Lee Kwan Yew who stands in front of the US  and tells them, listen you lazy bugger, now you have to tighten your belts, you have to save more, work more for lower salaries and only through that will we get out of the current dilemma that essentially prevents the economy from growing." No money printing, no extensive protests, no excuses. Of course, this would have to accompany a global overhaul of the system, something Zero Hedge has been advocating since day one, as it is impossible to reform this broken system from within: "The problem i have with the investment universe is that i find it difficult to envision how the US and western Europe can return to healthy sustainable growth without a complete purge of the financial system and some type of catalyst. Something that restores some measure of social cohesion among people;  it could be hyperinflation, a complete credit market collapse, widespread sovereign defaults, civil strife, major military confrontation.”   Alas, in that he is also correct, and as we said back in early 2010, when the current episode of extend and pretend ends and the can kicking exercise finally fails, next up is war.

It is refreshing to see that Marc is a reader of Zero Hedge, and specifically the post that we consider one of the most important of the year, namely that from BSC, which laid out in black on white what the next steps will be:

I tell what you to do. I think a flat tax on everybody would be actually a good measure and i think to reduce the regulatory environment in the US. We have expansionary fiscal and monetary policies. But we have restrictive regulatory policies. And it curtails any initiative by the small businessmen., and the large businessmen, he doesn't employ and invest capital in the US, he does he that in China or somewhere else in the world where the regulatory environment is more favorable. If you look at net investments in the US, it's gone down for the last 20 years, and it's now negative. In other words, basically the capital stock of America is not being replenished. It's being replenished somewhere else. And at the same time, the policies of the Keynesians have always encouraged spending. “We're not going to get out of recession by saving. Spend, Spend, Spend.”  That is wrong. The lack of savings is the problem of the United States.

Faber on volatility and liquidity:

i think the volatility arises because we have the Nasdaq bubble and then we had the housing bubble and the stock market bubble and then a commodities bubble and usually when the bubble bursts like off the 29 or after the late '60s you have a period of very high volatility for about 10 to 15 years before the markets settle down and then reignite the uptrend. As far the dollar is concerned, the reason i'm actually quite positive is that global liquidity, despite of the fact that the ECB and the European governments will flood the market with liquidity to pay the sales out, that global liquidity is tightening. And whenever global liquidity is tightening, it's bad for asset prices but good for the US dollar as was the case in 2008.

On what the true target of #OccupyWallStreet, whose otherwise noble intentions are unfortunately being abused by higher powers, should be:

Basically we have the Keynesians and the Democrats and I'm not saying that all democrats are equal, but they want interventions and we have far too many interventions in the western world where the share of the total economy that goes to government and is government- sponsored has grown. And that essentially makes it very difficult for the western world to grow substantially. As to that huge level of debts, i don't see how the western world, including the US, japan, and Western Europe can actually grow. They're going to stagnate. And when you have stagnation over a longer period of time, people start to ask questions and then they go after minorities. And Wall Street is a minority – they are a minority and anyone else would have done the same. They use the system. But they didn't create the system. The system was created by the lobbyists and by Washington. So they should actually go to Washington and also occupy the Federal Reserve on the way.

 Finally, his conclusion is once again spot on: Wall Street's growth is merely a smokescreen for something far more insiduous and something repeatedly covered by Bill Buckler and other more insightful strategists: namely the infinite growth of central planning and the government apparatus. Wall Street's monstrous increase is merely a smokescreen by government to allow it to operate in its shadows and to pocket the benefits of the most mutated symbiotic relationship in the history of the world.

The problem is, governments in the western world -- and I'm not singling out the US  -- they have grown like a cancer. And now they protect themselves to stay in power and they have a variety of alliances, like, for instance Mr. Obama he has no clue, but when he sees the protesters in Wall Street he immediately says yes, yes, yes that’s a good idea so he can target the minority so can buy a few more votes. And of course the well to do people want to protect what they worked for and also what they're paying for because as you know in the US roughly 50% of the people don't pay federal income tax. So actually to say that the rich have not contributed anything is actually wrong.

The conclusion is that any systemic reset should not target just Wall Street: it should focus first and foremost on what is most broken in US society: its "government."

 

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SheepDog-One's picture

'Lee Kwan Yew"? Man, thanks Marc! Now I feel retarded! But thats OK....lots of tards out there livin kickass lives!

Pladizow's picture

Was he saying she's my "Braud"?

dlmaniac's picture

Marc is exactly right. The reasons no one provides jobs in US is simply b/c people have too few skills and yet ask for too high a salary. In other words: Darwinism at work.

Smithovsky's picture

There's a very simple solution to most of our problems - GET MONEY THE FUCK OUT OF POLITICS!

Shocker's picture

You are Spot on, Stop spending money in areas that will not help in economic growth. The road works ends unless it is necessary, all silly spending stops.

We are replacing good paying, good jobs with lower wages.Thats great and all but prices on everything had to come way the heck down.

http://www.dailyjobcuts.com

.

 

Clorox Cowboy's picture

How does any of this matter, and why are we still talking about returning to growth when it is becoming more and more obvious that the world is facing the end of cheap oil?  Growth, in the economic sense, is not coming back. 

I like to read Zero Hedge to stay informed about the foolishness of the political/financial class...wasn't aware that any of the Tylers thought our situation was "fixable" though...that's troubling.

CH1's picture

Nah, do the morally consistent thing and cosider all coercion to be evil.

Under that standard, State=Fail.

o_rly's picture

Yes, because Marc Faber works oh so hard. These financiers shift money around, it's not like they produce anything. What a fucking joke. Faber? Has that guy ever worked a day in his life? All he does is go on Bloomberg and make snarky comments. I work hard everyday, I just can't wait until the Wall Street nobility have to do the same. 

robertocarlos's picture

Thanks o_rly, I read no comments before writing mine and I was sure I was alone in my thoughts. Fuck faber!

Pinto Currency's picture

-

North America, Europe and Asia are experiencing a fiat debt bubble collapse created by the central banks.

 

The choice is reform the currency or get annihilated.  In the meantime, paper is the most dangerous place to be.

 

JPMorgan and Goldman are voting with their feet while continuing to sell paper garbage to their customers:

 

Goldman and JPMorgan enter metal warehousing - Financial Times

 

Metal Warehousing Pays Off For Goldman Sachs - Forbes

 

Goldman's Secret Cash Cow: Detroit Warehouses Full of Metal ...

 

J.P. Morgan reopens vault amid gold demand: report - MarketWatch
arby63's picture

That is utterly amazing. I had no idea how coniving all of these bastards are. They are everywhere and screwing everything up faster than it can be fixed!

Pinto Currency's picture

 

 

JPMorgan and Goldman both well know that we are facing worldwide currency chaos as this currency/debt bubble collapses.

 

Don't think they aren't position to fleece everyone during the panic and to be gatekeepers in the new real asset world.

ratso's picture

Booooooo! Farber.  What a looser.  His recomendations are crap.  

I'll go with the old 'waves of creative destruction' economists. 

Market Efficiency Romantic's picture

only that it is not a contradiction. If we maintain the current policy, it is not a destrcution allowing for innovation here but in different regions. Creative destruction has moved to a global scale, isn't that obvious? It has alwyays been like that with the shift of world powers, long before the declaration of a globaliued economy. That only accelerates the process.

ratso's picture

Thanks for the thought but I would refer you to the school of Austrian economics for a more cogent exposition of my meaning.

Surly Bear's picture

Work harder for less pay and save. Sounds deflationary, Ben.

I love Mark Faber. Speak truth.

Pondmaster's picture

A good jobs Bill would reduce Gov't shovel leaners by 50% - CUT GOV'T LEECHES TO THE MAN 50% - Second don't allow Gov't unions to work against the taxpayers - Flat tax on ALL - Tariffs on all imports especially our "favored" crooks in China  - Prosecute and heavily fine the lying banks. Let the bansksters in prison make the road repairs , heralded by the 5k "Obama did this" banners along the roads  . Boycott the markets . End 401k's , Roths .    

Raging Debate's picture

Robert O'Carlos. Marc Faber does not require a defensible position for stating reality for four years.

Bicycle Repairman's picture

''listen you lazy bugger, now you have to tighten your belts, you have to save more, work more for lower salaries"

Oh so the problem is the lazy over-paid working man?  What sh#t.

Herd Redirection Committee's picture

Wealth and income disparity is the problem.  Debt slavery, usury, fiat fractional reserve banking.  The gov't has become a corporatist oligarchy. 

I appreciate the people who think we will experience a prolonged energy crisis, I really do.  But surely even the most cynical of us figures there are some technological discoveries that have been suppressed by 'Big Oil' in the last 90+ years.   Even in spite of that, the universe is full of energy, our problem is harnessing it efficiently. 

Its not that I think human ingenuity will save the day, but rather that graft and dedication will overcome that which, from where we are currently standing, seems impossible.

CrazyCooter's picture

You forgot to mention he said "The people in the UK don't want to work."

I was sort of stunned; that was a ballsy statement. I assume he meant it, its kind of how he is. And he isn't stupid either. Thus, I am sort of stunned.

Regards,

Cooter

CapitalistRock's picture

Marc Faber does not participate in Wall Street other than to simply put 30% of his assets in long term stocks, which is less than most 401ks. The rest of his savings are in gold and real estate. He is not a trader, financier, etc. To call Marc Faber a wall street guy is a joke and shows how ignorant you are. I subscribe to his newsletter. You need it more than me apparently. He's a gold bug that is further outside the system than most sheep like yourself.

Bring the Gold's picture

Then why blame the workers? Give me a fucking break workers REAL wages have been steadily decreasing since 1976 and it's THEIR fault? Huh, I thought it was moving factories over seas to our supposed enemies who are busy stealing our technology along with the fiat/fractional reserve ongoing heist of American wealth.

Faber may not be Jamie Dimon or Lloyd Blankfein but he really ought to place blame where it belongs on BOTH parties (cough cough Republican president and Treasury Sec. pushed for TARP and Bernanke was initially a Repub appointment, obviously Obama is more of the same fucking bullshit) and the FED + the "Investment" banks along with the entire concept of fiat currency and fractional reserve.

To blame workers for wanting some reasonable portion of the wealth THEY CREATE is just fucking class warfare rhetoric. Sorry Richy Rich turns out the RICH can and have been waging a class war since fucking Uruk and Ur, yet you only hear the words Class War when the poor/middle class resist in the slightest.

Fuck Faber I just lost all respect I had for him (used to have quite a bit actually). I'm a Gold Bug and I don't give a fuck if he shits gold Kruggerands, laying this at the feet of workers who want better wages than chinese children and prisoners is tripe of the most fetid kind. Fuck Faber.

CrazyCooter's picture

I completely understand your frustration. I was bitching to conservative friends for YEARS (during Bush) about the loss of manufacturing jobs and wealth production (vs BS service economy crap ... like insurance).

However, the reality is, now, that if the US is going to stand back up, we must do it by producing things of value that people want/need. That means manufacturing, innovation, and all that happy horse shit.

We are not going to get it at high ball salaries; we need to take the fucking gloves off and whoop some ass. This is why trade/currency wars are such a likely outcome.

I am the first to demand the hanging of bankers in the streets (I prefer lamp posts myself - after a proper trial of course), but the reality is that the US must compete on a labor scale against the rest of the world ... because we let our jobs go overseas and now the competition has trenches dug, is trained to fight, and has the logistics necessary to sustain themselves.

We made/allowed this mess, so the price is fighting to win. So, you are right, but don't expect the price to be pleasant. In fact, expect that price to suck.

So in my mind, the real question, is are you part of the greater-est generation? Because it is going to be at least that rough, probably with a fat war on top.

Regards,

Cooter

SeanJKerrigan's picture

Well, that's what the Fourth Turning says, my go to book these days.

If I'm not mistaken, the book predicts that the Millenials are the next "hero generation" -- The spiritual equivalent of the 'greatest generation.'  Wow.

But yeah, I look forward to telling everyone I told them so as we enter a new MASSIVE war that we probably won't survive.

UPDATE/EDIT: By the way, its pretty clear Faber doesn't understand what he's talking about.   Everything we know about the problem indicates that if you want to increase growth, you have to get people to spend.  They can't do that because they're burried in debt.  So first, you need to clear that debt (either by paying it down or defaulting on it).  Since paying it down is very difficult, even with slightly higher wages, default would be easier.

Then you can have spending resume at sufficient levels.  So even if we assume things don't get worse (a foolish assumption), it'll still be years before people are done deleveraging to the point where they can begin to spend again.  With the baby boomers peaking in their spending habbits, it seems pretty clear to me we're pretty much screwed in that whole growth thing.

Jesus, when you write it all out, you see that there really is no way to engender growth... the best we can hope for is a soft landing on our way down to hell.

I go into some more detail here if your interested.

stacking12321's picture

"Everything we know about the problem indicates that if you want to increase growth, you have to get people to spend.  "

ok time to put down the crack pipe, mr. keynes.

first of all, you have to get over your insistence on GROWTH. that idea, growth at all costs, is an obsession that's plagued our society and degraded our quality of life planet-wide.

second, it's not a lack of spending that's a problem, if anything it's TOO MUCH spending (at least in america). as a society we need to spend less, save more, and invest more, that will creat a more financially healthy environment and a stronger economy.

disabledvet's picture

Actually he's claimed to have worked hard at chasing all those bikini clad Thai girls. His criticisms might be misplaced but his eye certainly isn't.

trav7777's picture

exactly.  Another confettier complaining.  I'm sure he'd like a business but those fuckin workers are denying the confettier capitalist class the RIGHT to 100% of the profits.

Yeah, let's have wage parity with China where they are minting capitalist class billionaires by the truckload all of whom are connected to the Party and can get money for free.  Awesome idea.

I love how these idiots think it is really their money, that they borrowed from a bankster friend who conjured it out of his ass.

stacking12321's picture

"Yes, because Marc Faber works oh so hard. These financiers shift money around, it's not like they produce anything. "

o_rly, if you're too dense to understand that efficiently allocating capital IS producing something, then you're too dense to be on zero hedge.

you have outdated notions as to what work is, you don't necessarily need to be a brute in order to do work.

 

"All he does is go on Bloomberg and make snarky comments."

yes, and they are absolutely BRILLIANT snarky comments, if there were a dvd compilation of BEST OF FABER, i would buy it.

 

 

 

Bicycle Repairman's picture

Blaming American workers for this crisis is sh#t, pure and simple.  On that point Faber is full of it.  As for this nation's "capital allocators" it is they and they alone who are to blame.  They are incompetent and should be handed shovels.

CrazyCooter's picture

I disagree. I have considered doing my own business and always come to the conclusion it isn't worth it. If I was going to do it, I would have to borrow or seek investors. So, my idea would have to be compelling enough to someone to float the operation and get the cash flow going. I am very talented at what I do and I could absolutely run a web software consulting firm. I would probably do pretty well, but the whole environment these days is caustic. It just isn't worth all the BS.

So, I opt for a decent pay check in a small town. I still have a great deal of satisfaction doing what I do, its just W-2. And I have all this free time, since I don't have all the responsibility of running a small company.

Regards,

Cooter

stacking12321's picture

since when did he blame american workers?

don't get your panties all in a wad.

faber *loves* workers, as do i.

if anything, he's critical of consumers, not workers.

he is commenting on a society that has been self indulgent for too long, living on undeserved credit, buying unneccessary consumer goods with money that would have been better saved. but that's instant gratification american culture for you!

did you even watch the interview? they asked him how we get out of this mess, he said, simple, work harder, spend less, pay off debts. it's not rocket science, but it's a bitter pill that people don't want to swallow, medicine is sometimes like that.

mjk0259's picture

Efficiently allocating capital? Chinese Communist Party is doing a better job than Wall St whose idea of efficiently allocating capital is figuring out which partners should get it. Chinese average standard of living is rising US declining.

SheepDog-One's picture

Right Clorox, the line that we're returning to growth is absurd, the country and is manufacturing and resources have been sold off for the promise of cheap loans, its all pure crap!

Christophe2's picture

Indeed.  This advice from Tyler / Faber is pure crap: lowering wages (accepting lower wages) will exacerbate all of our problems, as people won't be able to afford houses, healthcare or most goods and services, which will harm all businesses and lead to ever greater deflationary pressures.

 

What we need to do is dump NAFTA and the WTO and stop trying to compete with China's slave labor on wages.  Stop the race to the bottom!

 

This advice from Tyler / Faber is good for the top 1%, and terrible for the 99%...  How much does Faber make?  I think he and his ilk are the ones who "need to tighten [their] belts, need to work for lower salaries"!  Nothin' like a rich puke telling the proletariat *they* need to take a pay cut - in fact, is that news?  We hear it every day from the MSM...

Pinto Currency's picture

 

 

Christophe,

I agree cutting wages won't do the trick but please post your counter suggestion.  What are we going to do with the real problem which is the $50 trillion of US debt (Federal, State, corporate, consumer, municipal combined) that is crushing the economy?

Deficit spend and create inflation as we are now all doing?  That's been tried and it doesn't work.

 

Christophe2's picture

I don't believe that we have a responsibility to pay back debt that was fraudulently issued: the racket wherein the big investment banks directly bribed politicians (above and beyond the regular 'donations') in order to accept the crappy deals that generated that debt has been well covered by Matt Taibi and others, and in any case the general solution is fairly simple: default on the debt if it becomes unmanageable.

 

Let the big banks crash, let the massively rich take their losses (sadly, along with the retirement funds, which are basically screwed anyway).  Iceland is a good example of how to deal with massive ponzi schemes and fraudulent debt, while Greece/Ireland/Japan are good examples of what NOT TO DO.

 

In any case, increasing wages won't work so long as we have free trade with slave-wage nations.

 

In the long term, people who don't make enough to take proper care of their kids ('cos they have to work 2 jobs just to get by) and can't afford education are never going to develop the kinds of skills needed to truly succeed in life - it becomes (or remains) the purvue of the wealthy, and it is not good for our society to have such extreme wealth inequality.

mjk0259's picture

Re-occupy Kuwait and surrounding oil producers.

Charge China $300/barrel for oil.

Massively nuke Pakistan/N. Korea in coordination with India/China (under threat of no more oil).

Iran surrenders next day or gets nuked.

US takes control of Chinese currency valuation.

 

koperniuk666's picture

a manufacturer friend who sources his stuff from China says that its getting much more expensive in China over last cple years and that China will shortly be too expensive for him. I dont manufacture - just pass on the gossip.....

BigJim's picture

No.

If I, as a manufacturer, pay my staff higher wages, this will have to be reflected in the final cost of the product, won't it? The price will go up. Do you think there will be more demand, or less demand, for my product (assuming it's not some stupid Veblen good) if it costs more?

Don't like your shitty wage? Then acquire some more skills. Your labour is no different from selling anything else. Do you think the government should mandate a minimum price for, say, chairs? No? Well, what's the difference between your labor and its products? The 'correct' wage is whatever your skills command in a free economy. Admittedly, we don't have one of those, but getting government to slap tariffs on imports leads to trade wars and makes things even worse for the 99% (eg, Smoot-Hawley).

As for Faber, he makes his money (unlike those who are part of the state-imposed money-creating cartel known as the banks) as a private speculator and investor, who risks his and his (willing) clients' money. He's entitled to every penny he can earn... and every penny he loses if he gets it wrong.

Faber wasn't bailed out. Don't get your friends confused with your enemies.

dark pools of soros's picture

you, like many who hug this belief, forget about all the wealth the middle class helped to generate this great economy which has now been siphoned rapidly away to the lowest common denominator.

Why do you think Japan, and then China, sold so much to America??  Cause their workers couldn't afford shit.  And still can't afford shit. And soon, American workers won't be able to afford shit.

If the occupy wall street crowd want a purpose, they should organize massive loan & mortgage defaults as the nuke to end it all. 

 

 

CrazyCooter's picture

Japan designed itself, at the highest level of government, to be a trade surplus country. The Japanese people have many very distinctive qualities when it comes to culture, which underpin this model. Being a trade surplus country gifts enormous influence to those who purchase the debt of the debtor.

It is the same faustain bargain China chose to make; the elite opted for power and influence with the semi-delusion it would be somehow sustainable.

But do not fret, the US was trade surplus to Europe after WWI. We had all that money rolling in the door. Worked out great for us I must say!

In case you missed the sarcasm, I have the personal opinion that any system with significant trade surplus/deficit imbalances is destined to blow up. Prepare accordingly.

Regards,

Cooter

BigJim's picture

The Chinese outcompeted us on price, and the Japanese outcompeted us on quality. Meanwhile, our wealth was siphoned away on stupid wars that wasted untold value and blood, but enabled our overlords to become rich. Our overheads went up commensurately.

And the Japanese and Chinese are much, much better off than before they started trading. Trade has immeasurably increased the wellbeing of humanity.

The US did very well for most of the early 20th century because of a fortunate combination of natural resources, (relatively) pro-business government, and a hard-working populace. And after WWII, we had the advantage of not having our entire country laid virtually to waste, not having a communist government, the largest amount of gold, and the reserve currency that enabled us to inflate with relative little consequence. Well, sorry, we've expolited those conditions for as far as we could, but there is absolutely no reason why someone producing hamburgers in Chicago should be paid much more than someone producing hamburgers in Mumbai.

We are being choked by governance and its consequences - regulatory capture, an overbearing MIC, and a parasitic financial sector that legally picks our pockets through inflation or outright theft (eg, TARP). Slapping higher taxes on imports won't make us any more competitive, it'll just make stuff more expensive, government even larger, invite reprisal, and we'll all be poorer.

mjk0259's picture

Faber produces nothing that can be used to feed, clothe or house your family.

He makes a lot of guesses , some of them come true, as would happen with 1000 monkeys.

No large group of humans on earth has had their standard of living improve as a result of basing their survival strategy on Faber's guesses and none will because even if he has been right before, this does not increase the probability of him being right now.

BigJim's picture

I have not (especially) followed Faber's advice. But clearly, plenty of investors have, and have found that he does indeed produce something that they can use to feed, clothe, or house their families. That is how he earns his money - that and through speculative investments.

He's not in the business of increasing our money supply (ie, a banker), or regulatory capture, or lobbying to get us to invade other countries to either steal their wealth, or enable the more efficient transfer of wealth from us to our overlords, or (to my knowledge) operating a ponzi scheme. His income comes from entirely voluntarily-given sources, and consequently he is entitled to every cent of it.

No large group of humans on earth has had their standard of living improve as a result of basing their survival strategy on Faber's guesses and none will because even if he has been right before, this does not increase the probability of him being right now.

LOL. How do you know how large a group of humans ('on earth' or elsewhere) have profited from taking Faber's advice? Furthermore, some people demonstrably have a better grasp of capital flows, history, macro economics, and politics than others. Clearly, these people's 'guesses' will be more likely to be right than, say, some fair-faced but lying internet troll. If people look at Faber's track record and think he is someone they are more likely to make money with, that is their business.