INTERNATIONAL. Marc Faber, the Swiss fund manager and Gloom Boom & Doom editor, warns that when the next crisis hits, 'you'd see people flee from all paper currencies into precious metals'.
Speaking in an exclusive two-part interview with The Daily Crux, Faber said: "When the percentage of interest payments to tax revenue gets too high, it will become clear to everyone that the government will need to print money in earnest to make these payments. That's when you're likely to see a crisis of confidence in the dollar".
"The question is will there be a crisis of confidence in all paper monies and what will the reaction of investors be? I would imagine that when the crisis really emerges, you'd see people flee from all paper currencies into precious metals," Faber added.
Does he think gold will fall anytime soon below US$1,000, or even US$900?
Faber wouldn't rule out a move to the US$950-US$1,000 level, where gold broke out last year.
"My sense is that if gold went lower than US$1,050, the Chinese would come in and buy some. I think they're waiting for lower prices".
"But honestly, I'm telling everybody in the world the same thing. I own my gold and I will never sell it, especially when I see clowns like Ben Bernanke, Larry Summers, Tim Geithner...
When I'm looking at all these characters in government, I want to own physical gold."
"We're just coming out of a seasonal period where gold is often weak, and heading into a period of seasonal strength, so it's possible gold may start outperforming here," Faber said.
Explaining how investors often miss on long term bullish trends by timing the market, Faber said:" As prices rise in a bull market, investors often try to be clever, and will sell thinking they'll buy the asset back when it drops back down a bit. Of course, many times they never get the chance to do that, and end up missing a large portion of the rise."
(snippet)
The total US debt is already 375% of the GDP, excluding medicaid medicare and social security. If you include these, the national debt is at 600% of the GDP, he said.
The legendary investor reiterared his belief that eventually there will be a big bust and then the whole credit expansion will come to an end. But before that happens, governments will continue printing money which in time will lead to Zimbabwe-style hyperinflation, and the economy will stop responding to stimulus.
Just a question from a relative ecomomic novice for anyone.
ReplyDeleteI am trying to connect the dots: If the US dollar becomes more rare (i.e., unemployment and low wages) how can we have hyperinflation?
As the consumer has less purchasing power, won't the law of supply & demand dictate LOWER prices?
At the same time, the largest banks are raking in excess profits through low FED interest rates and are storing cash. If their cash position is much better than it was in late 2008, won't they manipulate the system to make sure their cash retains its value? Thus hyperinflation would be avoided, would it not?
This is a question that I have asked.However,if you would google INFLATION GERMANY 1920's,read all about it. Now they tell us it will be x10??? Lets also add taxes, worthless "fiat" currency.
ReplyDelete6 mos. in cash,all the rest AU & AU. GOOD LUCK!
because goods become more expensive
ReplyDelete20 million laid off 38 million on food stamps
pay going down
hyperinflation is the banks and fed buying all your assets for cheap that house you paid 30 million for the bank got for nothing foreclosure
the banks forceing up oil but look at the big downturn you are already in hyperinflation
banks borrowed money from fed bought stocks cheap and then let you pay more for stocks that should still be cheap
deflation and inflation go hand in hand until
the breaking point is hit
like 2006 houses kept riseing while pay didnt
we are in a massive game of fraud
inflate then deflate then hyperinflate
because the banks backed by the corrupt goverment cant keep there hands off your wealth
they steal your hard money threw inflation then deflation and tax you like crazy
thiers no easy picture to show
except germany 1920s
read about it you will understand we are in an end game
the news cnbc fox are corrupt as a bad virus
my car has so much emissions crap
im taxed constantley just to keep repaired
if they pass cap and trade i fear
america will just be another slave state
wheres all the jobs there are none
this world is more scarey now than in any world war
our leaders sold out america
food is up energy is up
unless you work for the state or fed you are screwed
8:16.....
ReplyDeleteA loss of confidence in the dollar is the primary issue lurking regardless of whether or not all this printed money gets into the system and Fed machinations to counter it. IOW it's the uncontrollability of perception. If other sovereigns dump their dollar holdings in favor of less 'diluted' ones then that will accomplish essentially the same thing as dropping bales of greenbacks from helicopters - or IOW the hyperinflation you address.
Bottomline, hyperinflation is caused by either of two methods, and/or simultaneously: they are outright direct infusion through escalation in wages, interest rates, and other income generating escalators (the proverbial classical definition of too much money chasing too few goods) and/or through loss of confidence in a currency which causes the prices of all goods and services, whethr imported or domestically produced, to explode upward in order to compensate the parties perception of its reduced inherent value and again, secondarily for its initial and continuing dilution. In a hyperinflationary event it thus becomes a two-headed snake that visciously and inevitably chases its own tail until it dies from exhaustion. It is the mother of all 'currency crises'.
also nothing has gone down
ReplyDeletethink about it
when that so called cash hits the streets you will see inflation from here
many states are bankrupt when they get the next bailout
marc farber is talking about inflation will be fierce and if the chinese see inflation they will dump there treasuries
this will come quickley
unless theres a bigger war banks will be closed
marc farber is on the money
i am so impressed because he sees men for what they are greedy and corrupt
thats what youve been shown threw cnbc msm
greed is good
so you reaped the wind we will reap the whirl wind
Right. How does the cash get from the printing presses to the unwashed masses to be spent on the hyperinflationary goods.
ReplyDeleteHmmm.
For one thing, food stamp payments, unemployment and the like may keep going up trying to keep pace with inflation. Likewise social security might keep going up.
Wages will have to keep going up up up.
I'm not sure. I think the answer to how this works is in Zimbabwe. Somehow they keep funneling more printed currency to the masses to spend, but how that's going to happen I still don't know yet.
8:16 here again. I appreciate the responses to my post asking for insight in to hyperinflation.
ReplyDeleteMaybe the coin collection (mostly silver) that I spent my paper route money on as a kid will finally be worth something.
People forget that almost 87% of all dollars are electronic money...Made with the flick of a keyboard...Then out of the 13% that is in paper cash more than 1/3 is outside the US.
ReplyDeleteSo you have oxymoron of things all happening at the same time...Non-essential items falling...Necessities rising...Everything coming to a head...Like a slow train crash.
Lots of people will suffer but in the end the info is there and they took no care to prep...They laughed and made rude comments...They over bought crap and had more children than they could afford or keep.
They EXPECTED to always be taken care of since they were Americans and God forbid you tried to teach them or show them anything that didn't go with the media propaganda.
I don't say this bitterly...I say it sadly...I know some great people that refuse to see what's in front of them...I stopped trying to talk to them a long time ago.
As things get worse at work they look all haggard and don't know what's happening like a horse in a burning barn...Eyes all wild and shocked...WTF are these people going to do when it REALLY gets bad?
I deal with lower middle class people like me and I've seen the signs of anger/depression/shock and honestly we're only maybe 1/3 of the way down the rabbithole...Most Americans I know seem to have lost their backbone a while back...People need to buckle up.
It's not all a bad thing...Too many mouthbreathers and people who never worked/cared or strived...Let me tell you something nothing makes you strive harder than fear mixed with hunger...Maybe we can become great again with this swift kick in the ass.
Tough times make tough people.
11 10
ReplyDeletei agree
11 10 I appreciate most of your thoughts, except the backbone part---the backbone is there, but where does one begin the fight? my solution is to take all my money out of banks, stocks, paper and put it into PMs and stuff I can hold...if we all did this TPTB would have to start a war to get it from us...
ReplyDeletewe have a Super Walmart down the street from us...when I look at the clientele there, I can't help feeling that there is NO HOPE for this country.
@ 1:00 I hear ya loud and clear. I go to our super china mart and two thirds of the fat azz's are riding around on one of those little scooters, I feel sorry for the scooter as overloaded and taxed as they are.
ReplyDeleteThe fat ass customer can't hardly reach shit unless it's waist height.
If you ever go to super wally world you will instantly notice all the high fat, calorie sugar laden food is towards the bottom of the shelf to the aforementioned morbidly obese customer can reach with minimal effort.
The person who states that deflation precedes hyperinflation is correct. However, it takes extreme deflation to cause that.
ReplyDeleteUnder normal circumstances, i.e. where your currency is not the world's reserve currency, if government revenues fall precipitously and debt payments are such that, regardless of draconian budget cuts, the national budget cannot be balanced and debt payments cannot be met on a timely basis, then the only alternative is outright debt default or currency printing. Either event leads to currency devaluation. If the situation is acute, then the result is runaway inflation or hyper-inflation.
The United States is a powerful nation with a lot of options. If the powers that be want to maintain the viability of the USD, they can. However, those of us who know what's going on realise there's a push for a new world currency and power centralisation in Central Europe.
It's Europeans who run the Federal Reserve System through front corporations. This gives them near total power over DC, including foreign policy. American has effectively been conquered from within.
So is the Buck done? If George Soros says it's done, it's done. It just a matter of when and how.
The real problem in America right now is that key, large, commercial banks aren't lending sufficiently.
When you pay down loan principal, money is destroyed. When you issue new loans, money is created. Therefore, to stay ahead of the curve, more money must created then destroyed, otherwise there will be less dollars chasing product and service offerings, resulting in price deflation and ever increasing unemployment. Left unchecked, it's a cycle that repeats itself until you're faced with very difficult choices.
I have been coming here for over a year. I must say the comments on this page are the truest ,smartest comments i have heard. It is so nice to hear people think the same as i do. Thanks
ReplyDeleteEnough with the evil bank crap. Whoever posted about banks stealing houses must be a psycotic/moron. The bank owns your house because thier money paid for it dipsh&t.
ReplyDeleteFaber is great, but he's overlooking the obvious; deflation is more of a Risk than inflation right now. Inflation comes from higher wages...
We face a deflationary death spiral.
8:43 The banks money paid for my house what a f---ing joke. Where the f--- do you think they got the money out of thin air
ReplyDelete11:10,
ReplyDeleteI agree with most of that. But, many people don't understand this, outside of the economy and government takeover (laws and bills), the other big problem is actually the youth. Generation Y who are now in their 20s are rotten - this was a horrible generation, the worst ever. Among them few have any brains, any focus or discipline, any moral standards or ethics. Most of them are alcoholics, sexually perverse, fart brained fools who spend most of their time on myspace or facebook when not out getting high or drunk.
This generation wasn't too bad, even though it was rotten. Generation Z will grow up to be animals. Kids under 18 right now have no hope. You think the high schoolers and/or middle schoolers are bad? Wait until the really little ones grow up. No shelter.
The only way to fix that is to have every parent force their children to stay off the television, internet, not give them cell phones, beat them when they do wrong, and homeschool them. Of course that's too far gone.
Apart of that, the government would love kids like that who have one goal in life and one focus - just let them have their cell phones so they can text message their friends for hours and hours. That is their universe and all things that exist! They do not care that they are slaves of the fed and are being controlled by a fascist state - just let them have their cell phones please!
I really do hope these are the end times, cause if they aren't...
Unfortunately, many of these "cash for gold" operations are scamming their customers. It is easy to fool people, because many jewelry owners have no idea how to estimate the worth of what they own.
ReplyDeletesell gold for cash
There are certain aspects that an investor ought to know before purchasing gold. An investor’s main reason for investing is one of these aspects. Buying bullion as an investment is recommended if an investor’s goal is to purchase as much physical metal as they can buy for their money. Bars and coins that are a little above gold’s spot price are usually known as bullion. Some factors that make bullion more expensive than gold’s spot price are costs like shipping and manufacturing. Though bullion bars and coins are usually above gold’s spot price, the spot price is the factor that influences bullion the most.
ReplyDeleteNumismatic bars and coins are another kind of physical gold investment an investor may purchase. A numismatic piece is influenced by its rarity, its age, the way it was minted or the circumstances it has been through. This makes numismatic pieces worth more than the gold it contains, its manufacturing and shipping costs combined. With coins the condition of the coin is one aspect that will influence the price of both bullion and numismatic pieces alike. Certain numismatic gold coins can be worth more because of the circumstances it has been through or its rarity, when compared to similar gold bullion coins.
In certain circumstances gold bullion coins may transform to numismatic coins with the passage of time. Some ways this can happen is if the coin for any reason stops being minted. If the coin is still collected by investors, after the passage of time the price will gradually increase as the coin’s numismatic value increases. Some mints that produce bullion coins will occasionally produce a limited amount of proof coins. Coins that are manufactured in a certain way, to give it a glossier and shinier finish compared to its bullion cousin, are known as proof coins. Also these pieces will usually be seen as numismatic and cost more than its bullion counterpart. When investing in bullion, recognizing the differences between numismatic pieces and bullion pieces is highly recommended for any new investor.
To find more information about gold a good site is Buying Gold Bullion also some more informative information about gold is Coins Bars Bullion thank you and happy investing.
Cash For Gold Calculator
This comment has been removed by the author.
ReplyDeleteThere is nothing wrong with cash for gold. You just have to be extra careful.
ReplyDeletesell gold coins