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View Full Version : Marc Faber: "I Think We Are All Doomed"



Serpo
27th February 2011, 05:01 PM
All who enjoy hearing a meaty Marc Faber fire and brimstone sermon, that cuts through the bullshit, will be happy to know that the Gloom, Boom and Doom author conducted a 40 minute interview with the McAlvany Financial Group, which covers all the usual suspects: gold, silver, precious and industrial metals, the "crack up boom", the future of the Ponzi and capital markets in general and much more. Of course, it wouldn't be a Faber interview without the requisite soundbite: "I think we are all doomed. I think what will happen is that we are in the midst of a kind of a crack-up boom that is not sustainable, that eventually the economy will deteriorate, that there will be more money-printing, and then you have inflation, and a poor economy, an extreme form of stagflation, and, eventually, in that situation, countries go to war, and, as a whole, derivatives, the market, and everything will collapse, and like a computer when it crashes, you will have to reboot it." Of course, on a long enough timeline...

Key extract from the Faber speech:

I think we are all doomed. I think what will happen is that we are in the midst of a kind of a crack-up boom that is not sustainable, that eventually the economy will deteriorate, that there will be more money-printing, and then you have inflation, and a poor economy, an extreme form of stagflation, and, eventually, in that situation, countries go to war, and, as a whole, derivatives, the market, and everything will collapse, and like a computer when it crashes, you will have to reboot it.

For the investor, the question is: How do I navigate through this complete disaster that is going to unfold? And I think if you look at different asset classes – real estate, equities, bonds, cash, precious metals – I suppose that you have to be diversified. I think real estate in the U.S. may go down another 10% or so, or even 15%, but I am always telling people, if you can buy the piece of land or the house you like, what do you actually care if it does down another 10%? If everything I bought in my life had only gone down 10-15%, I would be very rich, because a lot of things became worthless, especially loans to friends, and bonds, and so forth.

Look at the history, for example, of Germany, for the last 100 years. They had World War I. They had the hyper-inflation in World War II. The bond-holders got wiped out three times. If you owned Siemens, and you still own Siemens today, it was not a fantastic investment, but at least you still have something. You were not wiped out. I think that in equities you will be better off because you have an ownership in a company, than by being the lenders to companies, and the lenders, especially, to governments.

Faber on the key distinction between nominal and real, which nobody on CNBC seems to grasp yet, why gold now is cheaper than it was in 1999, and on the Dow and gold reaching parity.

In a money-printing environment, it is very difficult to know what is actually cheap and what is expensive. Is the price of wheat high, or is it low? Inflation-adjusted, it is extremely low. In nominal terms, it is relatively high. I believe that, in March 2009 when the S&P was at 666, the market was actually much cheaper than is generally perceived, because of the money-printing, and I do not anticipate that we will see 666 on the S&P again, in nominal terms.

In other words, they are going to print so much money that the S&P could be at, perhaps, 2000, but in real terms, it could be down below the lows of March 6, 2009. Maybe in gold terms, we could one day reach a ratio of Dow Jones to gold of 1-to-1, as we were in 1980. In other words, the Dow could be perhaps at 10,000 or 12,000, and gold could be at the same level.

That is why I am advising people to accumulate gold. Can gold have a correction? Yes, there has been a little bit too much euphoria about gold, and we may have a correction, but I do not think we are in a bubble in the price of gold. In fact, I could make a case that gold, at this level of $1400 an ounce, is cheaper than in 1999, when I look at the unfunded liability growth of the U.S., at the credit growth of the U.S., and at the household growth, and at the money printing, and at all the wealth creation that happens in China and Russia.

http://www.zerohedge.com/article/marc-faber-i-think-we-are-all-doomed#attachments
http://www.youtube.com/watch?feature=player_embedded&v=3uEbhPuoTx0

Ponce
27th February 2011, 05:48 PM
"I think?" did he say I THINK????????.......tell you what, after all my preps either something better happen or I'll make something happen........ I am now listening to it but up till now is the usual suspects.....I know 100% that it will happen and how we will get there in immaterial.

Twisted Titan
27th February 2011, 06:21 PM
The bond-holders got wiped out three times. If you owned Siemens, and you still own Siemens today, it was not a fantastic investment, but at least you still have something. You were not wiped out. I think that in equities you will be better off because you have an ownership in a company


There is no difference between a bond and stock certificate both can wiped away by the stroke of a pen

The company can dissolve ( ala GM) Or the Gubbermint can nationalize it.


I like MF but truly is a awesome blunder on his part.

T

FunnyMoney
27th February 2011, 08:59 PM
...
I like MF but truly is a awesome blunder on his part.


With the mainstream pundits you must really pick and choose what you take away from their messages. They all have an agenda that is fully connected to the matrix. They are part of the system even though they are fighting against it.

Take the view on central banks, they call them dishonest, they say they are no good stewards of interest rates for examples. But that's not the real point. The real problem isn't that the fed has kept rates too low for decades, it's that they're in charge of rates to begin with.

Most of the mainstream pundits want to "fix" the system. The system is the problem, it doesn't need to be fixed and never can be, it needs to be dumped. Taxes and paper representations of money should be declared an enemy to honesty and liberty.

The subscription services are similar, they work inside the matrix and they are out there with an agenda.

A lot of times it is better to just listen mostly to the agenda of the anonymous Internet forum. Members here aren't looking for a handout or a click through to some website. We are providing truth because it's right thing to do, not because somebody told us to or because that's how we make a buck. We don't abide by what the system, or the govt, or the church, or our brother or mother or accountant says or does. We follow our hearts and our souls and look to the Creator and the Word of God for answers and simply try to convey those when we see something that sounds true to us and should be shared. It is this which made GIM1 so powerful toward the end of last decade. And members there had a track record in terms of fundamental and technical predictions that was right at 100% spot on! It was starting to snowball and of course the matrix wasn't going to let that go on.

Rebel Yarr
27th February 2011, 09:27 PM
Marc recommending certain equities is fine.... he makes valid points in supporting that call.