Marc Faber Resumes Bloodfeud With Treasurys, Still Sees Entire Financial System Imploding

Tyler Durden's picture




 

The only thing that is as consistent as Marc Faber's message to get out of government bonds ahead of a bout of global hyperinflation which will arrive once the vicious cycle of printing to pay interest finally dawns (which in turn would happen once central planners lose control of an artificially created situation, which by definition, always eventually happens), is the passion with which he repeats it over... and over... and over, like a man possessed, if ultimately 100% correct. In an interview with Bloomberg's Sara Eisen and Erik Schatzker this morning, he does what he does best - cuts to the chase: "if you think it through and you are as bearish as I am, and you think the whole financial system will one day collapse, we don't know if in 3 years, or 5 years, or 10 years, but one day there will be a reset, and everything will be essentially started anew, then you are better off in equities than in government bonds, because a lot of government bonds will either default or they will have to print so much money that the purchasing power of money will depreciate very rapidly." When asked if he feels uncomfortable predicting a calamity in bonds again, as he did back 2009, Faber is laconically empathic: "it is true that last year the 30 year bond returned 30%, and i owe David Rosenberg a bottle of whiskey" but analogizes: "from August 1999 to March 2000, the Nasdaq doubled, but at no time in that timeframe was it a good buy. And after it people lost a lot of money. We have now a symptom of monetary inflation and this is record corporate profits, and the second symptoms is essentially a bubble in high quality bonds: people seem so insecure and so much worried, they would rather be in a US bond with no yield, than in bonds that may not repay me, or in equities that may drop 30%. But it does not make them a good buy longer term." Yep: only Faber can get away with calling the bond market the second coming of the Nasdaq bubble and look cool doing it.

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Fri, 01/20/2012 - 11:26 | 2081034 Cognitive Dissonance
Cognitive Dissonance's picture

"Yep: only Faber can get away with calling the bond market the second coming of the Nasdaq bubble and look cool doing it."

I love the accent. It's so cool to hear him when he tongue lashes those who are in charge of the present day financial insanity.

Fri, 01/20/2012 - 11:36 | 2081068 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Marc Faber is a machine sent back in time to destroy the Keynesian Fiat Ponzi....

[cue Terminator theme song]

Fri, 01/20/2012 - 11:42 | 2081078 LawsofPhysics
LawsofPhysics's picture

Yep, either that or just another desparate old man who has benefitted from the rape of productive labor and near the end of his life wants to redeem himself by "calling out" all the same gimmics that made him rich.

Fri, 01/20/2012 - 11:47 | 2081101 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I've never heard him discuss politics, if that is what you mean, but when it comes to economic policy, although he hides his hand, he obviously does not agree with "money printing".  Since I can assume he wants sound money policy I think that he is at least knee deep in the water of Truth.

Fri, 01/20/2012 - 11:54 | 2081127 LawsofPhysics
LawsofPhysics's picture

What real product of value has he delivered via the private sector?  Maybe I have indeed missed something.

Fri, 01/20/2012 - 12:00 | 2081147 Oh regional Indian
Oh regional Indian's picture

My rule of thumb is very simple LOP.

Never trust a man in a tie. He HAS to be telling a lie.

ori

-gold-de-spell-ed/

Fri, 01/20/2012 - 12:25 | 2081260 LongBallsShortBrains
LongBallsShortBrains's picture

Faber is right on,

My rule of thumb about guys with ties is that they are not afraid to waste your time.

Fri, 01/20/2012 - 13:20 | 2081449 kito
kito's picture

faber is not right on. hyperinflation is highly improbable. the best scenario one could ever imagine is two more decades of lost growth as the cbs continue printing enough to keep up with deflationary deleveraging forces--i believe ray dalio called for 15 more years. and in my humble opinion, thats the absolute best outcome. worst is the destruction of all asset classes while ben maintains the strength of the dollar, his only source of power and the key to his legacy................

Fri, 01/20/2012 - 13:28 | 2081477 redpill
redpill's picture

Japan is the new model for price stabiliteeeeee

Fri, 01/20/2012 - 13:29 | 2081482 SheepDog-One
SheepDog-One's picture

How can broke unemployed people pay for hyperinflation? 

Fri, 01/20/2012 - 13:43 | 2081527 fuu
fuu's picture

They can't as wages are not inflating at the same time.

Fri, 01/20/2012 - 14:06 | 2081606 Spitzer
Spitzer's picture

Total bullshit

Look at the currencies in SE Asia when their economy collapsed. The Thai Baht and Indo Ringgit lost half their value (INFLATION) and they didnt even print any money.

for details... http://freegoldobserver.blogspot.com/2011/10/forgotten-crisis-and-what-e...

Fri, 01/20/2012 - 18:43 | 2082636 Marco
Marco's picture

Exactly, this is where inflation comes from when a trade deficit country gets forced into trade balance ... foreign currency holders dump the currency to get anything of value in return.

Now of course there are deflationary powers too in this situation, which wins is up in the air ... but regardless going from trade deficit to trade balance will force a drop in standard of living. So you get fucked either way.

Fri, 01/20/2012 - 13:57 | 2081579 walküre
walküre's picture

Their option is starving.

Fri, 01/20/2012 - 18:52 | 2082669 akak
akak's picture

How can broke unemployed people pay for hyperinflation?

Again with the stupid and/or disingenuous false dichotomy: "Deflation or Hyperinflation".

In actual fact, as has happened SO many times in just the last three or four decades, what we are almost certainly going to experience is NOT some mythical fiat currency deflation --- which is utterly absurd and intellectual insulting, not to mention historically nonexistent --- but a rapid and significant decline in the value of our fiat currency, much as the Southeast Asian nations did in the late 1990s, or Argentina did in 2001-2002, or Iceland did in 2008-2009, etc. etc.  Maybe a relatively brief period of 300-400% price inflation might not technically count as "hyperinflation" a la Zimbabwe, but it is still going to suck big time, and devastate the savings of the average person, precisely as it is and will be designed to do.

Oh, and how are we going to pay for it?  We will pay as EVERY population has ever paid for fiat currency depreciation: in a declining standard of living, and the wiping-out of most of our personal savings.

Fri, 01/20/2012 - 21:08 | 2082997 Captain Kink
Captain Kink's picture

bingo. +10

Fri, 01/20/2012 - 12:34 | 2081285 roadhazard
roadhazard's picture

That has always been my first personal commandment. As a result I have lived a pretty mellow life keeping them at arms length.

Fri, 01/20/2012 - 12:11 | 2081211 I am a Man I am...
I am a Man I am Forty's picture

ummmm, how about advising people in the private sector on how not to get financially ass raped by your government and federal reserve/central bank?  how about being one of the lone non kool aid drinking voices over many many years?

Fri, 01/20/2012 - 16:26 | 2082192 NewThor
NewThor's picture

This Kool-Aid is deliscious!

I wonder if Sarah likes to cuddle?

 

Fri, 01/20/2012 - 12:36 | 2081296 brewing
brewing's picture

he keeps singing the same old song.  when you shoot a shotgun, it's bound to hit something at some point...

Fri, 01/20/2012 - 13:40 | 2081514 dirtbagger
dirtbagger's picture

All of the Financial Newsletters have a pretty dismal prediction record when viewed over a longer time span.   Sure, guys like Faber have good runs where the predictions are spot on,  but so do the dice in a craps game.  

He is just another pundit who figured out a long time ago that the best way to make money on the markets was to talk about them.  Certainly, some pundits make better predictions than others (eg Abby Cohen), but at the end of the day, they are just bookies that make money no matter what happens in the markets. 

Fri, 01/20/2012 - 11:51 | 2081116 A Lunatic
A Lunatic's picture

Be in the world but not of the world.

Fri, 01/20/2012 - 11:56 | 2081135 LawsofPhysics
LawsofPhysics's picture

Ah yes, if only your could take philosophical crap to the bank.

Fri, 01/20/2012 - 12:07 | 2081173 LeBalance
LeBalance's picture

interacting with the bank as your preference, eh?

railing against "rape of productive labor," but unable to make a clean break from the bank.

-- clinical --

/lie on the couch and tell ZH all about it./

Fri, 01/20/2012 - 14:45 | 2081766 BlackholeDivestment
BlackholeDivestment's picture

...LeBalance, thanks for the laugh, there is a spaghetti noodle in my nose now. 

http://bible.cc/daniel/5-27.htm

http://bible.cc/revelation/6-5.htm

Fri, 01/20/2012 - 15:42 | 2082023 Things that go bump
Things that go bump's picture

Only if you are planning on joining a religious order and taking vows.

Fri, 01/20/2012 - 16:39 | 2082246 kito
kito's picture

@lunatic---you are the world

Fri, 01/20/2012 - 11:57 | 2081139 Dr. Engali
Dr. Engali's picture

Or maybe somebody who played the cards that were dealt him and was able to turn it into a winning hand.

Fri, 01/20/2012 - 12:40 | 2081306 Caviar Emptor
Caviar Emptor's picture

@Law of Physics: desparate old man who has benefitted from the rape of productive labor and near the end of his life wants to redeem himself by "calling out" all the same gimmics that made him rich.

You mean like Uncle Warren? Strumming his way into the hearts of sheep, and sending money to the US Capitol under the guise of "Fixing the deficit", when all the while it really is exactly what it appears to be : another bribe to politicians, money they can pork on to their cronies who'll kick it back 

Fri, 01/20/2012 - 13:50 | 2081550 trav7777
trav7777's picture

careful...you just gored a ZH sacred cow

Fri, 01/20/2012 - 19:18 | 2082683 akak
akak's picture

Happiness is being first to junk a stupid Trav comment.

(and they are almost all stupid --- that is, if they are not also racist, and/or hysterically silver-bashing)

Fri, 01/20/2012 - 11:43 | 2081087 Badabing
Badabing's picture

I love the way Faber says bubble.

Fri, 01/20/2012 - 12:12 | 2081213 KlausK
KlausK's picture

I'm here to prrotact yoo!

Fri, 01/20/2012 - 12:46 | 2081326 fonestar
fonestar's picture

Faber would have made an excellent Goldfinger.

Fri, 01/20/2012 - 12:03 | 2081158 true brain
true brain's picture

This is the only guy that admits he was wrong on the air. That's why I listen to him. Very few others do. He talks like a normal person. the rest of the economic bs pundits talk like they're psychopath- never wrong, never a morsel of regret or reality. BTW, he predicts s&p decreasing to 1000 in march to june this year, so load up on the short. then QE3 will be here right after that.

Fri, 01/20/2012 - 13:40 | 2081460 baby_BLYTHE
baby_BLYTHE's picture

I am not sure why everyone says he got it wrong on treasuries. I distinctly remember a video Bloomberg interview with Faber posted late 2010/early 2011 by Tyler saying he got a buy signal on US treasuries and he expected a rally to commence sometime early in 2011. He probably didn't expect the yields to plunge as low as they did that is why he says he owes Rosenberg a bottle of whiskey. Also in that interview before the start of 2011, he  said S&P would fall about 15% and gold about 20% before bouncing back, which he also accurately predicted.

Fri, 01/20/2012 - 12:19 | 2081219 WestVillageIdiot
WestVillageIdiot's picture

He sounds like General Buckhalter off of Hogan's Heroes.  I would love to hear him say, "Klink, you are an idiot".  That would be awesome. 

And for god's sake, somebody buy him a monocle.  He needs a monocle.

Fri, 01/20/2012 - 13:06 | 2081399 Joe Sixpack
Joe Sixpack's picture

I guy with 20-20 vision does not need corrective lenses.

Fri, 01/20/2012 - 15:15 | 2081902 vato poco
vato poco's picture

"Get that guy a monocle". LOL 

I don't care who y'are, that's some funny shit right there. Maybe add a dueling scar, too.

Fri, 01/20/2012 - 16:29 | 2082205 blunderdog
blunderdog's picture

I like the top-hat and pince-nez look, myself.

Fri, 01/20/2012 - 12:25 | 2081258 Gully Foyle
Gully Foyle's picture

Much like every Psychic, they can see it but can't give you specifics like date and time.

First fucker with exact date and time for ANY collapse should win everyones respect and never be questioned again.

Fri, 01/20/2012 - 13:03 | 2081390 Alea Iactaest
Alea Iactaest's picture

That fucker should be relentlessly questioned until he does it 2x in a row, imho.

Fri, 01/20/2012 - 12:46 | 2081332 Chief KnocAHoma
Chief KnocAHoma's picture

The sky is falling... no really I mean it this time....the sky is falling. A wolf is coming. The end is nigh.

I have been hearing the same shit for 10 years now. Granted the screams have been getting louder and more main stream in the last three years, but a melt down mad max world is not headed our way.

Trouble and change ... yes, but we'll get through it and the smart ones will make money on the path.

Fri, 01/20/2012 - 12:54 | 2081361 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You must not know that finite resources are being depleted

Fri, 01/20/2012 - 13:54 | 2081570 trav7777
trav7777's picture

no...YOU don't get it.

Crashes and collapses take far longer than your pathetic human attention span...even your pathetic human LIFEspan.

They take a lot less to read about than they take to happen.  We're IN what will be referred to in the future as a crash or collapse.  But it's not going to just be one MOMENT where suddenly everything goes poof.

It will be a slow decline.  In 10 years, you will look around you and if you can, remember how much you recall things having been better 10 years prior.  And that reduction by whatever percent in your lifestyle will be the crash.

Even the GD was over 10 years.  Collapses, panics, etc., in history, 2, 3, 5, 10, 20 years. 

Fri, 01/20/2012 - 14:43 | 2081747 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

So when did this one start then?

Was it when world oil production peaked in 2009?  Was it when the US cratered sound money policy in 1971 by closing the foreign gold window?  In 1933 when the domestic gold window was closed?  1913 when the Federal Reserve took control of monetary policy in the interest of the Private Banking Houses?

Was it in the 19th century when the Supreme Court established corporate personhood?  Was it in !987 when the PWG was established to control the markets?  Was it when gold, the collateral for all Central Bank bank balance sheets, peaked production in 2000?

Pick your poison Trav.  The collapse is long in the tooth.

Fri, 01/20/2012 - 23:45 | 2083302 falun bong
falun bong's picture

If you ask me it started in 1980, the year they shot John Lennon and elected Ronald Reagan.

Fri, 01/20/2012 - 13:20 | 2081443 Captain Kink
Captain Kink's picture

Chief, I think Faber would agree that we will get through it...the world will not end and the human race will go on, of course... "Trouble and change" is just a matter of how much trouble and how much change.  Yes, one can make money in a variety of ways through all of it, though making money may not be the most important thing when "trouble" comes to bear. 

Put it like this:  We are all fisherman and there is a storm on the horizon. Even the most aggressive fishing boat captain should worry not at all about the size of his catch when making it back to port is the real issue for himself and his crew...

Fri, 01/20/2012 - 13:55 | 2081575 trav7777
trav7777's picture

nah...it's more like erosion than a storm.  Storms are sudden...this isn't.  This is a developing situation.  Things will eventually fall down suddenly, but the entire neighborhood or town isn't going to erode away at once.

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