10/30/09 Stockholm, Sweden – In an interview with Bloomberg, the editor and publisher of the Gloom, Boom, and Doom Report Marc Faber discussed his strong views on the dollar. Here are a couple of his key comments, paraphrased below…
* There’s this huge debate between the inflationists and the deflationists… I belong more to the camp that looks at inflation and deflation from a different perspective. In the sense that in every system you can have some prices going down up and some prices going up. Say if you have a glut in consumer goods, then consumer goods prices can go up. But if you print money and have a zero interest rate, then home prices theoretically could go up, or stocks, or commodities. In any event your cash purchasing power goes down, that’s a symptom of deflation.
* The worst investments in an inflationary period, when you print money and have large fiscal deficits are, of course, long term bonds and then cash. The best is to have foreign currency and commodities… also equities can protect you to some extent because they adjust upward as the currency goes down.
* Regarding the dollar he says, “well, it will go to a value of exactly zero eventually.” When pressed for a timeline he explains, “Looking at Mr. Obama and his administration it should already be there, but I think it will take roughly ten years until people really realize that the fiscal position of the US is a complete disaster.”
The video came to our attention via Seeking Alpha’s coverage of Marc Faber on the US dollar and stimulus. You can watch the entire video below.
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Mr. Vega,
Please re-transcribe the second paragraph in your post (the one that has Marc Faber talking about inflation and deflation). It’s incoherent the way you wrote it. For instance, it says:
1. “You can have some prices gowing down up”[?]
2. “If you have a glut in consumer goods, then consumer prices could go up.” [What?]
Mr. Vega, I would add to Matt’s critique that you should also correct the statement about purchasing power of the dollar. A decreased purchasing power is a symptom of inflation, not deflation. Sincerely, Francis
On inflation/deflation:
When you loose your job and you have no income, “inflation” is 100%….
So, with so many millions having lost their jobs, and with their unemployment money running out, their “inflation index” is 100% less the ratio of money they get from unemployment insurance….and that, folks is a heck of lot more than just mere single digits!
Inflation is now killing those without jobs…