Marc Faber On Keynesian Folly, The 'Missing' Inflation, And Bubble-Blowing

Tyler Durden's picture

In as-comprehensive-an-explanation-as-we-have-seen of the monetary malfeasance and misunderstanding of the standard Keynesian central-banker, Gloom-Boom-Doom's Marc Faber addressed an instutional audience in the Middle East earlier this year. Faber begins by explaining his (correct) view that 'Keynesian' intervention into the free-market or capitalistic society (with fiscal and monetary measures), in order to 'smooth' the business cycle, has in fact created a more violent business cycle - as they attempt to address long-term structural problems with short-term fixes (or bubbles). His lecture expands from his insight that in 1970 not a single investment bank was public - they were all private partnerships (implicitly playing with their own money as opposed to other-people's - dramatically impacting the risk profile in the world) to the notion that central bank money printing (pushing dollars out the door) does have inflationary symptoms - but they do not necessarily have to show up in wages or CPI in the US (think Chinese wage inflation, or commodity price rises, or Aussie housing bubbles). Central bankers can determine the quantity of money but they cannot determine what we do with those USD bills. Must watch.

Faber covers it all - from macro-economics to energy supply-and-demand and from the consequences of incessant money printing and how to hedge for the long-term.

With volumes still muted, and a general malaise of hand-sitters, it seems now is a great time to spend 45 minutes clarifying your perspective on just what the experimental efforts of our global elite is doing to the world - and whether that is a good thing economically or not... we suspect the conclusion will not surprise you...