Special Guest: Marc Faber, Ph.D. Editor and Publisher of "The Gloom, Boom & Doom Report" and website: www.gloomboomdoom.com.
Dr. Marc Faber
Editor and Publisher of
"The Gloom, Doom and Boom Report"
Dr Marc Faber feels strongly that the current money printing policies "will not end well"!
He feels that:
"Governments are not smart enough to have thought the current scheme out. The professors, academics (who have never worked a day in their lives in the private sector) and central banks think by having artificially low interest rates you can solve problems. Actually, they aggravate the problems!"
"When central banks print money nothing begins to make sense!" -- "It is no longer a free market. Markets are now manipulated by governments and notably by their agents, the central bankers."
Financial Repression - An "Expropriation"
"Basically what central banks have done around the world is to push interest rates to extremely low or even negative rates. I don't call it a repression. I call it an expropriation of the savers because before the intervention of the banks occurred post 2008, a saver got a decent rate of interest. Now they get nothing at all! So either they speculate or they lose purchasing power over time!"
The purchasing power of money is depreciating. Financial Repression or what Dr Faber calls "expropriation", he feels is very negative for the middle and working class.
The current government and central bank policies "are leading to huge asset bubbles in stock, real estate, commodities, collectibles, art and so forth." Inflation and Deflation work much the same way according to Marc Faber. All prices do no go up or nor decline at the same time.
"We had the collapse of the Nasdaq after March 2000. Then the Fed created the housing bubble and after it collapsed after 2007, it had a devastating impact on a very large number of households. Then in 2008 we had a commodities bubble with oil going to $147/bl and now you know where oil is trading at. Its now 1/3 of what it was at that time basically. The Money printing leads to bubbles which they deflate and hurt the majority at the expense of a few people. This is not going to help the economy in the long run - PERIOD!"
Pension and Insurance "Models" - In Serious Trouble
The pension plans and Insurance industry is in deep trouble. They are basically forced to speculate on something. That speculation will end very badly!
What Should Investors Do?
Dr Faber says quite honestly,
"I am an economist, strategist and investor. The answer to the question of what should an investor do is - I DO NOT KNOW! But people expect me to know so I can tell you what I would do. In the absence of knowing precisely how the end game will be played we should invest in a diversified portfolio of different assets. Some in real estate, some in equities, some in cash & bonds, and some in precious metals."
"For an investor to not own some precious metals at this point is almost irresponsible!"
More WE is Coming
"I don't believe we have currency wars but rather the central bankers, one after the other, prints in a 'round about'"
"Money printing has never ended well in history. It can postpone the problems, but it will make the end result even worse."
"I believe the Fed will intervene at some point with another round of QE!"