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Dr. Marc Faber: Inflation Cannot be Stopped

Tom welcomes an always popular guest back to the program, Dr. Marc Faber.

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.”

Time Stamp References:
0:00 – Introduction
0:36 – Global Markets & Stocks
5:30 – V Recovery & Reality
7:28 – Inflation & Real Rates
13:05 – Fed & Political Will
16:26 – Will Rates Rise?
26:35 – Holdings & Conviction
29:16 – Geopolitical Risks
31:53 – Gov’t Intervention
33:52 – Wrap Up

Talking Points From This Week’s Episode

  • Global equity markets and sector performance.
  • Inflation in assets, yields, and real returns.
  • Geopolitical risk and the “new normal.”

Guest Links:

Dr. Marc Faber was born in Zurich, Switzerland. He went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a Ph.D. in Economics magna cum laude.

Between 1970 and 1978, Mr. Faber worked for White Weld & Company Limited in New York, Zurich, and Hong Kong. Since 1973, he has lived in Hong Kong. From 1978 to February 1990, Marc was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In June 1990, he set up his own business, publishing a widely read monthly investment newsletter, “THE GLOOM BOOM & DOOM,” a report highlighting unusual investment opportunities.

Dr. Faber is also the author of several books, including “TOMORROW’S GOLD – Asia’s Age of Discovery,” first published in 2002 and highlighted future investment opportunities. “TOMORROW’S GOLD” was on Amazon’s bestseller list and translated into Japanese, Korean, Thai, and German.

Marc is also a regular contributor to several leading financial publications around the world. In addition, Dr. Faber is a frequent speaker at various investment seminars and is well known for his “contrarian” investment approach.

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