Marc Faber on taper:
"My view was that they would taper by about $10 billion to $15 billion,
but I'm not surprised that they don't do it for the simple reason that I
think we are in QE unlimited. The people at the Fed are professors,
academics. They never worked a single life in the business of ordinary
people. And they don't understand that if you print money, it benefits
basically a handful of people maybe--not even 5% of the population, 3%
of the population. And when you look today at the market action, ok,
stocks are up 1%. Silver is up more than 6%, gold up more than 4%,
copper 2.9%, crude oil 2.68%, and so forth. Crude oil, gasoline are
things people need, ordinary people buy everyday. Thank you very much,
the Fed boosts these items that people need to go to their work, to heat
their homes, and so forth and at the same time, asset prices go up, but
the majority of people do not own stocks. Only 11% of Americans own
On Interest rates
"On September 14, 2012, when the Fed announced QE3, that was then
extended into QE4, and now basically QE unlimited, the bond markets had
peaked out. Interest rates had bottomed out on July 25, 2012--a year
ago--at 1.43% on the 10-year Treasury note. Mr. Bernanke said at that
time at a press conference, the objective of the Fed is to lower
interest rates. Since then, they have doubled. Thank you very much.
On the final
"Well, the endgame is a total collapse, but from a higher diving board.
The Fed will continue to print and if the stock market goes down 10%,
they will print even more. And they don't know anything else to do. And
quite frankly, they have boxed themselves into a corner where they are
now kind of desperate."
On Janet Yellen:
"She will make Mr. Bernanke look like a hawk. She, in 2010, said if
could vote for negative interest rates, in other words, you would have a
deposit with the bank of $100,000 at the beginning of the year and at
the end, you would only get $95,000 back, that she would be voting for
that. And that basically her view will be to keep interest rates in real
terms, in other words, inflation-adjusted. And don't believe a minute
the inflation figures published by the bureau of labor statistics. You
live in New York. You should know very well how much costs of living are
increasing every day. Now, the consequences of these monetary policies
and artificially low interest rates is of course that the government
becomes bigger and bigger and you have less and less freedom and you
have people like Mr. De Blasio, who comes in and says let's tax people
who have high incomes more. And, of course, immediately, because in a
democracy, there are more poor people than rich people, they all applaud
and vote for him. That is the consequence."
On gold direction:
"When I look at the market action today, I would like to see the next
few days, because it may be a one-day event. The markets are overbought.
The Feds have already lost control of the bond market. The question is
when will it lose control of the stock market. So, I'm a little bit
apprehensive. I would like to wait a few days to see how the markets
react after the initial reaction." On 10 year treasuries "I will confess
to you, longer-term, I am of course, negative about government bonds
and i think that yields will go up and that eventually there will be
sovereign default. But in the last few days, when yields went to 2.9%
and 3% on the 10-year for the first time in years i bought some
treasuries because I have the view that they overshot and that they
could ease down to around 2.2% to 2.5% because the economy is much
weaker than people think…I think in the next three months or so." On
gold prices: "I always buy gold and I own gold. I don't even value it. I
regard it as an insurance policy. I think responsible citizens should
own gold, period." Marc Faber: "Fed's Neo-Keynesian Clowns... Are
Holding The World Hostage"
"There is nothing safe anymore, because the money-printing distorts all
asset prices," is the uncomfortable response Marc Faber gives to Thai TV
during this interview when asked for investment ideas. Faber explains
how we got here "massive money-printing and ZIRP creates a huge pool of
liquidity that does not flow evenly," as it washes from Nasdaq stocks to
real estate to emerging markets and so on. Each time, "the bubble
inflates and then is deflated as the capital (liquidity) floods out."
The Fed, based on the doubling of interest rates since they began QE3
"has lost control of the bond market," Faber warns; adding that while he
expects some "cosmetic tapering," the Fed members and other
neo-Keynesian clowns will react to a "weakening US and global economy,"
and we will be a $150 billion QE by the end of next year, as the world
is held hostage to US monetary policy. The interview is interspersed
with Thai translation but is well worth the time (starting at 1:25):
Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.
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