Thursday, April 22, 2010

Marc Faber: Governments Are Headed Towards Bankruptcy and Will End Up Printing Huge Amounts of Money

Current economic policies are not sustainable and the world faces doom because "the governments are taking over", said Marc Faber, editor & publisher of The Gloom, Boom & Doom Report.

"They will all bankrupt us and expropriate us, but it may not happen tomorrow. They'll give us something to play with, until the whole system breaks down...they'll just print money and print more money," he said on CNBC Thursday.

"What I object to the current government intervention in so-called 'solving the crisis', (is that) they haven't solved anything. They've just postponed it."

Faber warned that the "ultimate Armageddon" would be much worse the next time around, as "governments will go bust", which would lead them to print more money.

On Goldman Sachs he said "They have a very strict compliance department compared to the others — they're like an angel. But they targeted Goldman as it stands as a symbol of Wall Street," Faber said.

Some will choke over Faber characterizing Goldman as angel-like, but he is correct in the sense that they do not break laws. They follow rules and just see to it that they have regs written to their advantage. It's a peculiar mindset, in their view they are doing nothing wrong. It's kind of a self-denial of how distorted they make things by their influence over regs that they turn to their advantage. But Faber's point taken to mean that it would be unlikely that they committed fraud is true. The fraud charges against Goldman are very bogus and appear to be highly political. Goldman does evil, that's what the bailout of AIG was all about, but they don't break laws. They make laws.

Faber went on to say that with President Obama's ratings sliding due to the health care reforms, the government was going after Goldman to distract the attention of the people.

"Maybe the intention is not to hurt Goldman Sachs, but just to gain popularity with the middle class and the lower class of America, so they will perceive Mr. Obama to have done something against the evil of Wall Street."

"If you print money like in Zimbabwe... the purchasing power of money goes down, and the standards of living go down, and eventually, you have a civil war," he added.

Faber warned that the mood has turned very very negative among certain groups of society.

Instead of holding cash, Faber advised investors to "gradually accumulate physical gold and silver" while those who want exposure to shares of gold exploration companies should buy them from time-to-time when they become cheap.

"Some of them still have reasonably good value at the present time. This is a long-term strategy because in an environment where governments will print money — and I'm convinced they're gong to bailout Greece, which means you transfer essentially bad assets on to the balance sheet on the government," he said.

When that happens, Faber warned the purchasing power of paper money will go down, rather than an appreciation of precious metal prices.

"Paper money (will go) down relative to precious metals. So in that environment, I think you...should all accumulate some gold."

The video clips of his appearances are here:


  1. So, Goldman is innocent. It won't matter. Two words: Arthur Anderson. This is politics, not law.

  2. Bob -

    You are so wrong on this.
    It's a civil law suit..They don't need to prove guilty intent.

    They caught them on a violation of the law in fact. That's enough.

    But you are so right there are lots of other people including ACA, IKB, and Paulson whom they have to look at.

    They will be found guilty and it may well open the gates to a flood lawsuits against many banks.

    Also, Khuzami has subpoenaed Moody's I hear..
    So let's wait and watch