Mark Faber: "I Am Convinced The Whole Derivatives Market Will Cease To Exist And Will Go To Zero"

Tyler Durden's picture

Anyone seeking joyous holiday greetings and cheerful forecasts for the new year is advised to avoid the following most recent Mark Faber interview, in which in addition to his predictions for 2012 (led with "more printing" by the dodecatupling down central planners, and far less prosperity), we get the following: "I am convinced the whole derivatives market will cease to exit. Will become zero. And when it happens I don't know: you can postpone the problems with monetary measures for a long time but you can't solve them... Greece should have defaulted - it would have sent a message that not all derivatives are equal because it depends on the counterparty." And on the long-term future: "I am ultra bearish. I think most people will be lucky if they still have 50% of their money in 5 years time. You have to have diversification - some real estate in the countryside, some gold and some equities because if you think it through, say Germany 1900 to today, we had WWI, we had hyperinflation, WWII, cash holders and bondholders they lost everything 3 times, but if you owned equities you'd be ok. In equities in general you will not lose it all, it may not be a good investment, unless you put it all in one company and it goes bankrupt." As for gold: "I am worried that one day the government will take it away." As for the one thing he hates the most? No surprise here -government bonds.

Full clip:

h/t Scrataliano

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Al Gorerhythm's picture

Obamma signs NDAA = War declared on US citizens. Will the US military be deployed in the US on the affected doctrin of "spreading democracy and freedom"?

Too ironic!

It sure is needed though (and novel) -- at least half of the equation anyway. Now which part of "democracy and freedom" makes it an oxymoronic equation and one we should should do away with?

Raise the Republic! Good movie in the making.

UP Forester's picture

With their tanks, and their bombs, and their bombs, and their guns....

What's in their heads? (x2) Zombie....

yabyum's picture

And happy holidays to you Mark!

Jlmadyson's picture

If so, then we are cooked.

CapitalistRock's picture

I've been panicking for years. It's not clear what the heck one should do in a panic. Gold and silver? Got it. Real estate? Got it. Cash and stocks? Done. But it's still not going to preserve purchasing power.

TruthInSunshine's picture

Capitalistrock said:

"It's not clear what the heck one should do in a panic."


***NSFW - Language***

You Need To Diversify Your Bonds Nigga

*Blame Chapelle and his writers for use of the 'N' word, and not me, PC Police.

BobPaulson's picture

If by purchasing power you mean: "A continuous stream of cheap goods manufactured by poor people in exchange for bullshit promises and the odd air raid", yeah, I think you can kiss that goodbye for a while until somebody thinks up a new scam for making people semi-willingly be slaves. Unless of course you are the slave, then your purchasing power is soon to rocket up significantly after the string of wars coming down the pike.

NumberNone's picture

It's going to be allright guys...Ally Bank is advertising 1% a year CD in the banner ad I'm seeing. 

GMadScientist's picture

Very well. They may deposit cash with me, but only if they provide the first years 1% up-front.


mmc1968's picture

And what good has panicking done for you?

tmosley's picture

I can't speak for him, but the silver I bought with the paper I liquidated when I panicked is worth about 4x what it was when I did it.

Imagine what will happen when everyone panics.

NotApplicable's picture

Keeps my bowels churning. And my clenched jaw has ground my teeth down so that they appear even now.

I don't refer to it as panicking though, I like to call it optimistic pessimism.


au_bayitch's picture

Ditto. Examine Maslow's hierarchy of needs. Trade the skiboat for a chicken coop. Divorce the wife of 27 years, cash in the IRA and 401K's and buy 8 acre small farm. Get a shotgun and cut down small trees practicing. Plant a vegetable garden. It is work, but sleeping better. GoodLuck

krispkritter's picture

Chicken coop=check

Wife=N/A (dog)


8 acres=check



Thanks for reinforcing the fact my choices are valid(unlike most people who think I'm nuts)...

SheepDog-One's picture

'Derivatives market' never really existed in the first place! So how could it do anything BUT eventually cease to exist?

RockyRacoon's picture

Kinda like one o' them particles they create in accelerators?   They only last a miniscule amount of time.   These derivatives created by the mind of financiers has a longer life span but do much more damage!

Dcheeth2's picture

Diversify with home grown cabbage soup. Its the bomb!!

Let them eat iPads's picture

Cabbage is cheap as borcht. I love the stuff.'s picture

Try some tree cabbage aka collards. Nice leafy greens sticking out of the snow. Can't beat that.

Snidley Whipsnae's picture

Don't forget Kale, it's also a winter hardy veggie.

JustObserving's picture

All $707 trillion will go to zero?  Austerity to eternity?  Who will attend Obama's $35,000 a plate dinners? Who will buy Roubini's $5.5 million NY apartment?

youLilQuantFuker's picture

"Saudi Prince in Night Club spends one million dollar"

Camel Jockey makin' it rain with the joo confetti.'s picture

Just like everything else, fiat was invented by the Chinese.

GMadScientist's picture

Is it less frustrating if he gives it to some schmuck who buys BAC with it?


Odin's picture

How he thinks the market won't crash like a heroin addict on monday if derivatives go to zero is beyond me...

Citxmech's picture

Because when folks are sifting through the wreckage - there's actual value in certain companies.  It's all about real asset value based upon human need.  No matter what happens to the monetary system, folks are going to need energy, food, water, etc.

Mr Lennon Hendrix's picture

Corporations rely on people, people do not rely on corporations.

chunga's picture

Corporations ARE people. Too bad so many of them are evil.

What kind of person would Monsanto be?

NumberNone's picture

Corporations literally are people via Corporate Personhood.  And be nice or you'll hurt their feelings!'s picture

Corporations rely on people, people do not rely on corporations.

How many products that you will use today were not made, marketed or distributed by corporations? You're not making your own breakfast cereal or having your toothbrushes produced through local cottage industry, are you?

Mr Lennon Hendrix's picture

I made my own breakfast and the ingredients were made locally.  My toothbrush is not made from one of the leading "brands". 

And the point is that corporations should not be deemed persons.  They do not think or feel.  They should be treated as businesses.  The only reason for the Rockefeller/Morgan corporate coup was so they could get away with murder and not be held accountable.  They were pissed that the unions were getting the better of them, and they needed a way out.

I will write it with a slight tweek that maybe is a more accurate tatement. 

Corporations rely on people, people do not need to rely on corporations.

chunga's picture

I didn't have any breakfast...or lunch. I did brush my teeth; honestly I don't know who made the brush I just hope to hell it wasn't Monsanto.'s picture

How are you using a computer to access the Internet without relying on corporations? Are any of the local products you use produced using electricity or transported by internal combustion engines running on gasoline?  Does your place of business use energy and equipment that is produced by corporations? Do you travel to work or to shop in a corporate built vehicle using corporate supplied oil? Do you ever read books, watch TV or movies or listen to popular music? Should all economic activity be limited to that which can be performed by sole proprietorships and partnerships?

I could keep going forever because anyone who is not living naked on an island depends on a complex economic system which must be able to organize itself in order to operate.


Mr Lennon Hendrix's picture

I wouldn't be online if it wasn't for ZH.  I haven't had cable for close to a decade.  I don't watch movies unless that's what a friend wants to do.  I would rather play guitar and write.

I sold a car after the Fall of '08, and only recently bought one, but the car cost me a few hundred dollars.  I rode my bike everywhere for the three years inbetween, and I have likely put more miles in on bikes than cars (excluding long trips I only do every once in a while) during the last decade.

I have noticed lately that many of the books I buy are from small publishers, and I always shop at local bookstores.  The computer I am using is from 2001- it doesn't get youtube. 

I would love to live on an island, naked.  But instead I am choosing to participate in this crazy world until the wheels fall off. 

But.....none of this is my point.  We don't need corporations, and they don't make us any happier.  It's not like people are happier now than they were during the last decade, century, melenium.  Technology just gave us a different lifestyle.  It didn't change who we are.  We are the same people that hunted and gathered, the same people who have lived and loved, sang and traveled, all of it.  It's all the same as it ever was.  Wake up.'s picture

Petrochemicals allow humans to expend 10 calories of fuel in order to produce 1 calorie of food. Without petrochemicals the  food supply would only support a small fraction of Earth's present population. Billions would die. Please explain how vast quantities of petrochemicals can be discovered, extracted, refined and transported without corporations.

WhiteNight123129's picture

Well if you have stocks and you are record holder, some of those stocks will reprice inflation. You have to be record holder though.


Odin's picture

Yeah I understand his premise that they will just print and print and print, but if the derivative markets goes to shit, there will be a lot of counter-party systemic risk that would send the whole house of cards crashing down... But what do I know I'm no "doctor"...

Papasmurf's picture

Not easily done these days now that brokers refuse to deliver your property.

AngelFace's picture

Saw this clip on YouTube a week ago.  MF rocks. MF for czar of ECB and head of the US Fed!

AngelFace's picture

Saw this clip on YouTube a week ago.  MF rocks. MF for czar of ECB and head of the US Fed!

New American Revolution's picture

Zero out derivatives, agreed, there is no other eventual option.

NotApplicable's picture

Ahh! There's that word, eventual.

Until then, there's always infinity.