Dr. Marc Faber: Inflation Cannot be Stopped
0:00 - Introduction0:36 - Global Markets & Stocks5:30 - V Recovery & Reality7:28 - Inflation & Real Rates13:05 - Fed & Political Will16:26 - Will Rates Rise?26:35 - Holdings & Conviction29:16 - Geopolitical Risks31:53 - Gov't Intervention33:52 - Wrap Up
Most stock markets and sectors have underperformed compared with US Markets. This is because every time the Fed prints, it ends up with corporations and the super-rich. Markets are no longer homogenous, and fiscal deficits are no longer expanding. This is making it more difficult for the entire market to move upwards.
Politicians and central bankers avoid discussing inflation, and people's salaries are not keeping up with inflation. Dr. Faber says, "Once you embark on money printing and fiscal deficits attempting to stop is practically impossible... it will continue." Current interest rates are near zero, and no matter what inflation metric you use, it will reveal that we have negative returns today. So monetary tightening is nearly out of the question.
Markets can be manipulated for a time, but eventually, the market will destroy the interventionists. We may see higher rates from here. In real terms, everything is negative, and that is boosting assets. The Fed is not in a good position, but these people don't go to jail; they will still get compensated. Expect volatility to increase from here, and those that are leveraged will get slaughtered.
"Asset markets are so grossly inflated that they could have a meaningful setback. We've seen that in bitcoin which is now rallying but the silver and gold tumble we have experienced shows us that other assets could be very vulnerable."
Dr. Faber is concerned about geopolitical risk and what governments may decide to do once this 'pandemic' ends. But, unfortunately, politicians and bankers are doing what is good for themselves, concentrating power.
Marc says, "It will get bad and it will get worse. For those that think it will go back to normal you better get used to the way it is now. It will be unpleasant and it will get much worse."
Dr. Marc Faber was born in Zurich, Switzerland and obtained a PhD in Economics at the University of Zurich. Between 1970 and 1978, Dr. Faber worked for White Weld & Company Limited in New York, Zurich and Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In 1990, he set up his own business, Marc Faber Limited which acts as an investment advisor and fund manager. Dr. Faber publishes a widely read monthly investment newsletter, "The Gloom Boom & Doom Report," which highlights unusual investment opportunities, and is the author of several books including Tomorrow's Gold: Asia's age of discovery