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In an interview with Business Intelligence Middle East, Marc Faber said that eventually some time in the future there will be a bust and then the whole credit expansion will end. Governments will continue printing money, which in time will lead to a very high inflation, at that point the economy will no longer respond to continued stimulus.
What is even more scary, and something we have written here a few times, is that it may all end in war. Our reasons are the high prices of commodities and people going hungry. His reasons are that wars will be invested as a distrction for the masses. The enemy? Invented.
He also says there is less transparency today. "The government's balance sheet is expanding, and the abuses that have led to the one cause of the crisis have continued".
"the average family will be hurt by that, and then in order to distract the attention of the people, the governments will go to war".
Of course he says that during war times, commodities go up sharply. Therefore people should be invested in physical assets, not paper assets.
Gold
“Will it go US$2,000, US$200,000 or US$2 trillion? I don’t know,” he said. “But if you have money printing in the world, then the price will over time rise. It will go up more for things that you just can’t increase the supply, and the supply of precious metals is very limited.”
S&P 500
“I don’t think the S&P will drop below 800 or 900, and eventually will go higher in nominal terms, but not necessary in real terms,”
The Fed
"I repeat what I have said in the past," Faber said. “No decent citizen should trust the Federal Reserve for one second. It’s very important that everyone own some gold because the government will make the dollar (in the long term) useless."
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