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Marc Faber: "Fed Will Destroy The World"

Tyler Durden's picture




 

"Everything will collapse" is the consequence Gloom, Boom, & Doom's Marc Faber sees from the Fed's latest 'stimulus' (and the fallacy and misconception of how money-printing can help employment). In a wondrously clarifying interview on Bloomberg TV this morning, Faber explained why he was 'happy', since "the asset values of his holdings will go up" but as a responsible citizen he is worried because "the monetary policies of the US will destroy the world." It truly is class warfare under a veil of 'its good for you' as he notes: "the fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won't. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols." Congratulations, Mr. Bernanke.

 

Must-watch (or read the transcript) - it is truly remarkable.

 

Faber on more Federal Reserve stimulus:

“It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don't like bonds. I don't particularly like equities, but I think equities are a better space to be in than bonds.”

On what he will do with his portfolio in reaction to yesterday’s move:

“I own corporate bonds and I recently, as I wrote, I pulled some bonds from Kazakhstan because Kazakhstan economically is a much sounder country than the United States or any European country. But it is in small doses. I wouldn't put all of my money in corporate bonds. They have an equity character. I also own equities still in Asia and as I pointed out already four months ago for the first time in my life I bought equities in Portugal, Spain, Italy and France because they were unbelievably distressed. I think what people overlook today is they look at markets but they don't look at what happens within the market. In the last 12 to 18 months the U.S. has massively outperformed European markets, Asian markets with a few exceptions and now some markets are relatively depressed. I could argue the Chinese stock market is now relatively depressed. So the asset allocators may move some money in Chinese stocks and then they can rally 10% to 20%.”

 

The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won't. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols…Very happy. Very good for the Fed. Congratulations, Mr. Bernanke. I’m happy. My asset values go up but as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world.”

On whether there’s any credibility in the Federal Reserve trying to bring down the unemployment rate and improve the housing market:

I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don't want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don't add to employment. They destroy employment. Secondly, I would just like to mention one thing. This money printing business, they have been saying that for the last 15 years that bailing out LTCM were necessary. Then they say the NASDAQ collapsed after March of 2000. We need to create another bubble, print money. They created a gigantic credit bubble and the misery that we have today.”

On where gold prices are headed:

“I think that the trend for gold prices will be steady, but the trend for the dollar and other currencies will be down. In other words, in dollar terms the price of gold will trend higher. How high it will go, you have to call Mr. Bernanke and at the Fed, there are other people actually that make Mr. Bernanke look like a hawk. So they are going to print money. And they have done it for ages already and where has it led? To record high unemployment essentially since the Great Depression and structural unemployment. Unemployment goes among low paying jobs, not high paying jobs. So, you ought to own some gold, but don’t store it in the U.S. because the Fed will take it away from you one day.”

On whether he would buy property in the United States:

“Yes. Property prices in the south of the U.S. are very inexpensive compared to property prices around the world. The tragedy is that the people that were evicted from these homes have no access to credit. They have no money. They can’t buy them. So, with easy money by the Fed well-to-do people can buy these properties and then rent them out to the people that were kicked out of these homes. What a great achievement of the Fed. First they create the property bubble and destroy the wealth of poor people, then the poor people have to rent and the rents have been up over the last 12 months. What a great achievement. Thank you, Mr. Bernanke.

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Fri, 09/14/2012 - 11:18 | 2795006 TonyCoitus
TonyCoitus's picture

Mission Acomplished.

Fri, 09/14/2012 - 11:20 | 2795037 Pladizow
Pladizow's picture

Destroying America is Ben & Obummers objective?

Show me a policy that contradicts the above statement.

Fri, 09/14/2012 - 11:22 | 2795054 Dalago
Dalago's picture

Ron Paul warned us.

Fri, 09/14/2012 - 11:24 | 2795064 Pladizow
Pladizow's picture

BBB - Buy Borat Bonds - Very Niiice!

Fri, 09/14/2012 - 11:27 | 2795082 BaBaBouy
BaBaBouy's picture

Protect Yourselves With GOLD...

GOLD $50K Bitchies...

 

Fri, 09/14/2012 - 11:31 | 2795107 NewWorldOrange
NewWorldOrange's picture

Gold isn't going to help you much when every other person is a government thug or snitch. They will confiscate it, search for it, make it a capital offense to possess or use it. They did it in the 30's and they'll do it again. We have no choice. They have to go.

Let is begin here and now. Let's set the date. March 15, 2013. The Ides of March. The day Caesar was taken down. We all simply set down the Doritos, turn off the TV, and walk out into the street. Everyone. Let the crowds grow. If you're close to your city council, march. If you're close to your state capital, march on that. If you're near DC, march on that.

Against all enemies, foreign and domestic.

The enemy is domestic. They've trampled and abused every word of the Supreme Law of the Land. Through their machinations they have destroyed our way of life and will soon send us into the chasm. They must be brought to justice in the only manner possible.

March 15, 2013. Lock and load. Spread the word. Make it go viral. American Spring.

Fri, 09/14/2012 - 11:53 | 2795155 TwoShortPlanks
TwoShortPlanks's picture

Is it just me, or does anyone else feel like collapse has been shifted into 5th gear?

It's like every star out there is a Black Swan and we're making the jump into 'LightSpeed'..."Punch it Bernanke"
http://www.youtube.com/watch?v=kT5UlRy80cw

Fri, 09/14/2012 - 11:53 | 2795246 CrashisOptimistic
CrashisOptimistic's picture

I disagree.

This is money we're talking about.  It is a man made concept.  Gold's value is a man made concept.  

The concepts don't exist in nature.  

This stuff can be changed on a whim.  Bernanke is doing that.  The Obama Administration doesn't consider capitalism sacred.  They will intervene and manipulate daily.  Europe even more so.  

Because it's all whimsical, there need be no collapse from this.  Whatever the problem is can be reversed by decree because it's all imaginary.

It is oil that is going to take it all down.  Soon.  It is oil that is the underlying cause of all of this upheaval.  

It all falls apart soon, via oil.  But not now.  Give it a year or three.  Then you die.

Fri, 09/14/2012 - 12:13 | 2795346 NewWorldOrange
NewWorldOrange's picture

"The concepts don't exist in nature.  "

Nature, to be commanded, must be obeyed.

I disagree." and "It all falls apart soon, via oil.  But not now.  Give it a year or three.  Then you die."

So where exactly do you disagree? On the timing? You may want to study up on the term "black swan." Or even "uncertainty."

It could happen tomorrow. It might take decades. No one knows. But like the poster you responded to, I do agree. The Bernanke just shifted into high gear, and even if we're no more likely to hit the wall than before, it should at least be more obvious to even the mentally challenged that hit it we will. Hopefully TPTB will be standing on that wall when slam into it. Only we can make that happen. No one's going to come along and save us you know.

America marches on the Ides of March.

Spread the word. Always, everyday, every chance you get. Let's organize the revolution. First thing on the agenda: TPTB have to go. Then the state legislatures will do what the law requires, or face the same at the traitors who've seized control of the Fed Gov and the Fed Reserve.

 

Fri, 09/14/2012 - 12:51 | 2795560 The Shootist
The Shootist's picture

The "people" did not want Romney, the wanted a better contrast with Obummer like Ron Paul. The GOP establishment, along with Drudge, rammed him down our throats to spite the detested Tea Party. Fuck you GOP, grand old party my ass!

Fri, 09/14/2012 - 13:07 | 2795648 NewWorldOrange
NewWorldOrange's picture

The "people" wanted American Idol and McDoubles. What planet have you been living on? When, and only when, said TV and junk food is taken away, will the "people" get serious about who runs their country and makes their laws. Fuck the "people." They get what they deserve. But it'll all get taken soon enough, and we'll see how TPTB respond to tens of millions of angry, hungry Americans marching on their city councils, state capitals, and federal government buildings in search of some traitorous scoundrels to hang.

America marches on the Ides of March.

Mark your calendar. If enough do, we'll win. Spead the word.

Fri, 09/14/2012 - 17:04 | 2796999 philosophers bone
philosophers bone's picture

McDouble the prices!  I'm lovin' it!

Sat, 09/15/2012 - 07:03 | 2798238 Simulacra10
Simulacra10's picture

McDouble Plus Good!

Fri, 09/14/2012 - 12:12 | 2795360 hedgeless_horseman
hedgeless_horseman's picture

 

 

“Yes. Property prices in the south of the U.S. are very inexpensive compared to property prices around the world. The tragedy is that the people that were evicted from these homes have no access to credit. They have no money. They can’t buy them. So, with easy money by the Fed well-to-do people can buy these properties and then rent them out to the people that were kicked out of these homes.

I agree.  Disintermediate.  Be a land lord.

Fri, 09/14/2012 - 12:52 | 2795559 FeralSerf
FeralSerf's picture

During Reconstruction and also the Great Depression, many people lost their real estate due to being unable to pay the property taxes.  Why do you think that won't happen again?  Property taxes are very difficult to evade/avoid and relatively easy for the governing bodies to increase.

Fri, 09/14/2012 - 13:23 | 2795680 hedgeless_horseman
hedgeless_horseman's picture

 

 

There are at least two fallacies in your comment, red herring and straw man, but who is counting? 

Fri, 09/14/2012 - 13:17 | 2795697 lightning
lightning's picture

They may try, but there is a big difference between the Great Depression and today.  More people today own homes than during that period thanks to all the bubbles (tech, housing, stock, etc).  I don't know about where you live, but in my area, the sheeple begin to riot at every mention of higher property taxes.  If the local politicians want to keep their jobs they know better than to raise property taxes.  This is unique in a way especially with the decrease in home values which has in turn decreased the amount most pay in property taxes.  Yet, in spite of paying less (based on lower home values) homeowners have basically made it known that government better find some other way of balancing the budget.  Keep in mind that I live in an area that is below the national average in unemployment and whose economy is supported by the military so we are impacted less than other areas.

Fri, 09/14/2012 - 14:47 | 2796322 Seer
Seer's picture

"More people today own homes than during that period thanks to all the bubbles"

But, is this true by percentage?

Further, do all these people own, outright, their homes?  I suspect that they're no more than glorified renters (paying to the bank rather than a landlord, who, probably is also paying to a bank...).

"homeowners have basically made it known that government better find some other way of balancing the budget"

I'd wager that it'll be the banks that will present the greater pressures to hold/decrease property taxes as they bring more and more "inventory" back on to their books.  It's my theory that it's one of the big reasons why banks are so slow to reposes homes: in some cases the bank/lender may try to wring it out of the defaulter but... blood out of a turnip...

 

Fri, 09/14/2012 - 17:12 | 2797033 Kobe Beef
Kobe Beef's picture

Agenda 21, smart growth, sustainable development, eminent domain, land restrictions...doesn't have to be a local government attacking your property rights through taxation anymore. Hell, HUD can just Section 8 some real choice tenants next door and destroy your equity overnight.

One way or another, Uncle Scam & the Bloodsuckers will take your property as soon as they want to. That's even more certain than them stealling your gold. You can at least hide that.

Anyhow, low interest rates are a bankster trap. They're just dangling the bait for anybody who didn't get completely fucked up in debt yet. Assume the worst, and you'll always know what the banksters & Uncle Scam are up to. Unless you believe "Linda Green" is negotiatiing in good faith. Sorry to say, but that's how low ethics goes in the USSA today.

Fri, 09/14/2012 - 16:37 | 2796916 Theosebes Goodfellow
Theosebes Goodfellow's picture

~"This stuff can be changed on a whim."~

Right up unto the point where the paper is no good. Then they lose all power.

~"It is oil that is going to take it all down."~

There will be life after big imported oil dies. The transition process may have dicey moments, but the life that follows will be just fine. It's only TEOTWAWKI, not TEOTW.

Fri, 09/14/2012 - 21:15 | 2797747 aphlaque_duck
aphlaque_duck's picture

Yes and no... gold's value as money is ascribed by man, true, but only insofar as money is a man-made concept. The use of gold as money was decided not arbitrarily, but due to its unique physical properties which come from nature. 

But I do agree with you that our present crisis all boils down to oil. It is the greatest treasure mankind has ever known. Gold is but a proxy to the true value which is a liquid hydrocarbon... for the price of a head of lettuce, oil does the work of a hundred man-hours.

Men eliminated human slavery by making carbon our slave. But soon we'll be going back, because we're burning throgh the stuff a million times faster than it gets put in the ground.

Fri, 09/14/2012 - 11:40 | 2795167 Pladizow
Pladizow's picture

What % of the US population owned an assult rifle in the 1930's?

Fri, 09/14/2012 - 14:32 | 2796217 Bad Attitude
Bad Attitude's picture

Hee hee. Turn your FRNs into something with intrinsic value, like ammunition.

Fri, 09/14/2012 - 11:55 | 2795259 Dr. No
Dr. No's picture

They confiscated gold because gold in circulation prevented them from inflating/devaluing the dollar.  Now that the are free to devalue as they see fit, there is no reason to confiscate gold.  Actually, to confiscate gold would signify the government thinks gold has value.

Fri, 09/14/2012 - 13:00 | 2795608 NewWorldOrange
NewWorldOrange's picture

to confiscate gold would signify the government thinks gold has value."

TPTB fully understand that gold has great value. Certain "government" people may not. Do you REALLY think the CBs and other powers that REALLY be won't "lobby" the government to confiscate? Or that roving bands of gangs, hoodlums, and thugs, otherwise known as cops and Blackwater Squads, won't do it of their own "duty"?Or that every other neighbor (mostly sheepish sheeple) won't snitch you out?

As for devaluing as they see fit, of course they can. And will. That's why the value of gold will soar. Now you're drinking the Alice in Wonderland koolaid (oh, and look, five "me toos!" were drinking it with you, having no clue what you really said except that is kind of sounded like a kudo to gold.)

Fri, 09/14/2012 - 13:51 | 2795892 Dr. No
Dr. No's picture

Where are they going to get the money to officially confiscate?  They will outlaw guns, gas burning cars, cane sugar, and BigGulps before they outlaw gold.  Will an executive order comes down to "Surrender all gold to the nearest Federal building for $1700 (market value) oz or be prosecuted"? Perhaps they will demand confiscation without compensation?  Good luck with that.   Gold is not viewed as a threat to the governments power.  Stop spreading your fears.

Fri, 09/14/2012 - 17:39 | 2797074 NewWorldOrange
NewWorldOrange's picture

You, Sir, are an abject idiot.

http://en.wikipedia.org/wiki/Executive_Order_6102

It was already done dumbass. There's even a copy of the executive order. Note the imprisonment provision. How can you be THAT stupid given that you've been signed up here over 2 years? Shill? Don't read, just talk? Willing to say anything, even obvious absurdities, to try to "sound right" and get green arrows? Pathetic.

BTW -- and hold onto your hat for this one -- the American government has already rounded up tens of thousands of law abiding American citizens it decided were a threat:

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

Will you still be a sycophant (water boy) for the Man at the FEMA camp? Tip: I hear girls at the NAZI camps could buy a little more time by cutting themselves and using the blood for lipstick. So pucker up assbitch.

Fri, 09/14/2012 - 19:13 | 2797427 Dr. No
Dr. No's picture

I never denied the governemnt confiscated gold.  It is common knowledge.  It is also common knowledge why the did it: to devalue the dollar.  The US is not on the gold standard.  Therefore they do not need to confiscate to devalue.  Why are you have such a hard time keeping up?  Perhaps you are just too angry of an individual to think rationally.

Sat, 09/15/2012 - 07:59 | 2798276 NewWorldOrange
NewWorldOrange's picture

"The US is not on the gold standard.  Therefore they do not need to confiscate to devalue."

The U.S. was not on a gold standard when they confiscated last time either dipshit. And who said they need to confiscate to devalue? Reading comprehension issues? YOU said they would devalue, but that would not affect the price of gold. I agreed they would devalue, and that that would cause gold to SOAR. Sorry the math on that is troublesome for ya'.

I'm guess I'm having such a hard time keeping up with you because you're still running in some strange parallel universe where black is white and up is down, and fast is slow. Very, very slow. Heh.

Sat, 09/15/2012 - 09:08 | 2798311 Dr. No
Dr. No's picture

The U.S. was not on a gold standard when they confiscated last time either dipshit.

 

Gratz, you got it: The dumbest post on ZH.

 


P.S. I made sure to reply to your post so you could not edit it to remove your dipshit comment.  I will make sure to link that post to all your future comments I see, jut to highlite your stupidity.  Internet is a bitch.

Sun, 09/16/2012 - 07:27 | 2800179 NewWorldOrange
NewWorldOrange's picture

Awwww...lil' fella is upset. LOL!

So you actually think the U.S. was on a gold standard in the 1930's? Hahaha. I realize that some writers who are really loose with the language refer to the tiny piece of a "gold standard" that existed in that era as simply "gold standard", and that certain simpletons don't understand what a gold standard really even means. Keep studying lil' fella.

"I made sure to reply to your post so you could not edit it to remove your dipshit comment.  I will make sure to link that post to all your future comments I see, jut to highlite your stupidity.  Internet is a bitch."

Say, speaking of Internet bitches, are you that scorned girl I remember from High School? Sorry, can't remember your name.

Fri, 09/14/2012 - 13:07 | 2795649 seek
seek's picture

Exactly. I on't go so far as to say it won't happen, but trying to get people to turn in gold when they've denied it's money for so long in a desperate attempt to stay solvent will be among the very last acts the government does -- and at that time things will be so chaotic that either they won't be able to gather enough forces to do a search, or those very forces will be stealing everything they find.

Unless remote sensing technology has attained insane levels of advancement that have been hidden, there's no practical way to find a tube of Eagles stuck in a PVC pipe buried under a drainage culvert.

Add to that virtually no one in the US actually holds gold now -- and it becomes obvious what a desperation play this is. It may change if people wake up, but again, this is something that happens at the terminal end of this crap.

Fri, 09/14/2012 - 13:26 | 2795764 lightning
lightning's picture

You are assuming that the reason given for confiscation will be based/predicated on an economic reason as it was in the Depression.  This is not necessarily so.  I believe that gold confiscation will happen, but it will be part of the war on terror.  The government will point out that many Middle Eastern sponsers of terror use gold and as a result of a "crackdown" US citizens will be banned from any gold transactions.  This will make sure the funding streams for terrorism cannot infiltrate our country.  Done only to ensure the safety of all americans and because most americans do not own gold, you won't have many complaints.  This cover story will allow the government the means to add to the empty treasury and to further their ends of making sure TPTB have all the resources and won't be challenged by any "little people". 

Fri, 09/14/2012 - 13:33 | 2795785 The Dumb Money
The Dumb Money's picture

Forget marching.
Organize a run on the banks. 

Fri, 09/14/2012 - 13:37 | 2795807 Seer
Seer's picture

And when the dust settles there will still be the issue of a TOTAL lack of ability to continue on the path of perpetual growth.  Physical resources will STILL be in decline while population numbers increase.

The "problem" is far more fundamentally based than most are willing to admit.  But hey, the notion of creating a big disturbance is how the big boys do it (that was the intent of the wars in the Middle East- they figured it fine [and perhaps even preferable] if they ended up creating chaos).  One can feel empowered to do all sorts of immoral things under such conditions: but, again, when the dust settles...

Fri, 09/14/2012 - 14:13 | 2796063 lemonobrien
lemonobrien's picture

i'm a leaving on a jet plane, don't know when I'll be back again.

Fri, 09/14/2012 - 14:37 | 2796252 Seer
Seer's picture

And in order to "get back" your choice of transport will be capped at that of riding a camel...

Fri, 09/14/2012 - 11:31 | 2795113 francis_sawyer
francis_sawyer's picture

<=== Warhol "Campbell Soup" painting soon to cost $50,000

<=== Can of Campbell Soup soon to cost $50,000

Fri, 09/14/2012 - 11:40 | 2795168 DavidC
DavidC's picture

I'm not sure which one to click, but it made me laugh!

DavidC

Fri, 09/14/2012 - 12:37 | 2795493 francis_sawyer
francis_sawyer's picture

Timeless masterpiece :-)

Fri, 09/14/2012 - 13:26 | 2795758 robertocarlos
robertocarlos's picture

It's the worst soup ever! One of the benefits of living in my Mom's basement is homemade soup.

Fri, 09/14/2012 - 11:48 | 2795213 adr
adr's picture

You do know that Campbell is selling Andy Warhol commemorative soup cans right now.

http://www.cnn.com/2012/09/05/living/campbell-soup-company-andy-warhol/i...

IT'S DAMN NEAR PROPHETIC!!!!

Fri, 09/14/2012 - 12:40 | 2795514 francis_sawyer
francis_sawyer's picture

Soup is good food...

Fri, 09/14/2012 - 14:16 | 2796085 lemonobrien
lemonobrien's picture

not Cambell's; mostly salt. try homemade.

Fri, 09/14/2012 - 11:33 | 2795127 Buckaroo Banzai
Buckaroo Banzai's picture

Wow, Mark Faber has a really big head.

Fri, 09/14/2012 - 13:59 | 2795940 fourchan
fourchan's picture

dead video link

Fri, 09/14/2012 - 11:36 | 2795068 TwoShortPlanks
TwoShortPlanks's picture

Mr   M-E-A-N-I-N-G-F-U-L-L-Y

Fri, 09/14/2012 - 11:34 | 2795074 BaBaBouy
BaBaBouy's picture

Phuck Da Phed ...

Fri, 09/14/2012 - 12:06 | 2795319 Mountainview
Mountainview's picture

And Marc Faber will be right longterm... But for Paul and Faber : How long is long term?

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