Marc Faber on Inflation, Stock Markets, Gold, Real Estate and The End Game

by | Feb 22, 2011 | Alex Jones, Forecasting, Marc Faber | 52 comments

Do you LOVE America?


    Gloom, Boom & Doom Report publisher Dr. Marc Faber joins Infowars’ Alex Jones to discuss non-traditional investment strategies, global inflation, social response and repercussions, and the phases to expect as the crisis deepens.

    (Full interview available below excerpt and commentary)

    Faber on Inflation:

    I think that inflation or the cost of living increases in the US and elsewhere is much higher than what the government is publishing. And, I think this is having a negative impact on consumption, because obviously the cost of necessities – insurance, taxes, food, energy – is going up very rapidly. My answer to all of this is, the worse the economic conditions will become, the worse the geopolitical conditions will become, the more Mr. Bernanke and his fellow Fed governors will print money.

    Consumers in the US are getting broker by the day. As food and energy prices rise, consumers will be forced to adjust their spending habits. Paying 30% – 100% more for food at the grocery store means less money spent at movie theaters, electronic stores and restaurants. In turn, this spending adjustment in discretionary consumer spending means more people will lose their jobs, and so too will people in the industries that support those markets, for example, transportation companies. It simply cannot be any other way.

    The solution from the financial master minds in the White House and on Wall Street – no matter how jaded – is, was and will continue to be the printing of more money.

    The real kicker is, that as more money is printed, goods will continue to rise, because most of that printed money ends up in speculative stock market and commodity investments, further driving up prices on essential goods. As those prices rise, there will not be an adjustment to wages – putting further pressure on consumer spending and job losses. It’s a negative feedback loop that simply cannot be stopped, and the very actions we’ve been told are the solutions to our problems are actually contributing to, and further enabling, the crisis.

    Faber on Stocks:

    I’m not ultra-bearish on equities. I think they will now correct because the market is way over bought. And, so we can easily have a correction of 10% – 15%. As soon as the markets drops, say, 15% – 20%, QE3 will come into play. And all that is favorable for silver and gold.

    The first round of quantitative easing began around the time of the 2009 stock market lows. Marc Faber saw this coming in March of 2009, when he recommended to his subscribers to take positions in stocks. Faber knew that The Fed would pump as much money into the system as was necessary to change the perception about our economic malaise. In that respect, QE1 worked. Stocks (and commodities) saw significant gains. While a stock market crash may still be in the cards, the point that Dr. Faber makes about QE3 should not be taken lightly. The US government has already committed in excess of $30 trillion to resolve this crisis. Be assured that they will keep going if they find it necessary, regardless of the impact this will have on our national debt, the US dollar or the end consumer, who according to Fed chairman Ben Bernanke, is not experiencing any significant level of price inflation.

    Faber on Precious Metals and Value:

    All of that [money printing] is favorable for silver and gold. Now, the question is, is gold and silver expensive or is it cheap? In 1999 you could buy an ounce of gold for $252. Now it’s $1400. Is it cheap or expensive?

    In a money printing environment it’s very difficult to decide what is expensive and what is cheap because the function of money to be a unit of account and a store of value has been lost through the money printing. My view would be, yeah, relative to 1999 the price of gold is expensive at $1400. But relative to the money printing maybe not.

    My advice to all your listeners is to gradually accumulate gold. Don’t buy it on margin – just gradually accumulate month by month.

    I think the US government is bankrupt. They will not default on the debt. They will just print money. Not to own gold and silver is to trust Mr. Bernanke. Now go and look at his speeches, and then you tell me whether you rather trust gold or Mr. Bernanke.

    Nominally, gold has surpassed it’s record highs of the early 1980’s (and silver is well on it’s way). In real terms, adjusted for inflation, gold would have to hit roughly $2300 per ounce to have the same “value” as what it had in the 1980’s. When QE2 was announced in 2010, the price of gold shot up relative to not just the dollar, but all global currencies. One can surmise that QE3 would have a similar effect. Add to that the strife around the world and the panic buying that ensues in insolvent nations like Greece, where the street value of gold during their 2010 riots was 50% higher than the listed exchange values, and you can see the direction that precious metals are headed.

    From a preparedness standpoint, gold should be a part of any complete emergency and disaster plan. As we’ve mentioned in the past, and Dr. Faber suggested in this interview, accumulate gold over time. You don’t have to invest all of your finances in precious metals – but acquiring a little bit every month wouldn’t be a bad idea. The strategy of dollar-cost-averaging let’s you balance out your overall “buy” price in the event of volatility where prices drop or rise rapidly.

    With gold, you don’t have to worry about your US dollars, because you are, in effect, your own central bank.

    Faber On Real Estate:

    I think another avenue is to own farmland. I think that real estate prices in the US have come down – OK, they may go down another 10% – but relatively to other countries and internationally, after having declined, if you can find a house you like, it may not be a bad time to buy a house in the US. It may not go up in value, but it may preserve its value.

    I know quite a few extremely well to do people who have second thoughts about life in big cities and security in big cities if the unrest in the middle east were to also spread to developed countries. And they also know that we might have problems with modern warfare that would include cyber war, or switching off of the electricity or biological warfare – terrorism – that would touch the big cities. So, they want to be safe. They buy islands and they buy farmland in the middle of nowhere.

    We’ve suggested in the past that real estate has not yet hit bottom – and we maintain this position. We could see housing collapse another 30% from here, perhaps even more. However, the decision to purchase a home at this point comes down to value.

    If you are looking to flip properties as a business like many did leading up to the real estate detonation, you’ll be hard pressed to generate significant revenue. But if you have other intentions and goals, it might not be a bad time to consider purchasing.

    Farmland, for example, is a real estate asset that produces commodities. Unlike a suburban home with no real possibility for production unless you’re willing to do the work, farmland allows a family to generate their own food, as well as their own energy – essentially eliminating the necessity of the ‘grid’ on which most people depend. Not only that, but outside of major cities you’ve got an extra layer of security in the event of war, economic collapse or other disaster.

    Additionally, if the US dollar continues to be debased, which it will given historic trends, we can expect interest rates on homes to start rising – significantly. In the 1980’s rates exceeded 15% in some cases. The following example demonstrates why it might not be a bad time to buy now if you expect interest rates to rise:

    via Mortgage Calculator

    Home Price: $200,000
    Current Rate: About 5%
    Monthly Payment: $1073.00
    Total Payments Over 30 Years: $386,500

    or, waiting until rates rise and prices decline 30%:

    Home Price: $140,000
    Rate: 10%
    Monthly Payment: $1228.00
    Total Payment over 30 Years: $442,000

    Unless you plan on paying in cash after the next leg down in real estate, it may be to your benefit to buy now and lock in a decent interest rate, even if you expect a massive decline in prices. Additionally, you may end up paying less simply because of inflation and (hopefully) a future wage adjustment or earnings increase.

    Faber on The End Game:

    We are in the end game, but we are currently in a crack-up boom. A crack-up boom is when you postpone a recession through money printing and credit growth. The credit growth is not created in the private sector – but it’s much worse – it’s in the government sector. The government is the most unproductive sector in economic life.

    So, this crack-up boom will end very badly.

    But, before it ends badly, we’ll have money printing, very high inflation, and when everything fails the US will go to war. They are already in war, but they’ll increase it.

    Our economic policies dictate that no other end result can come of it. While Dr. Faber gives the “end of the end game” a time frame of roughly seven to ten years, there are many variables in play, any of which can set the whole powder keg off at any given time.

    As was suggested in If You Believe It Or Not, It Doesn’t Matter, it is possible that we are already on an accelerated path to a collapse of the world as we have come to know it.

    Listen to Marc Faber and Alex Jones (February 21, 2011):

    Hat tip European American and Truth is Liberty


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      1. The only thing that CRACK UP BOOMS me is my supply of new, uncirculated $10 bills;  they will always have value, and when taken from storage can be used to fill your pillow for a comfortable night’s sleep…and in the morning they will be gladly accepted for goods and services.

        Increase your supply of crisp, new $10 bills and all CRACK UP BOOMS will pass you by, like a mighty tsunami that gently rocks a rowboat far out at sea while wreaking havoc on those on the shore who have put their faith in farmland, firearms and a network of friends.

      2. what’s with the $10 bills?

      3. $2,300 in gold? What about the US Gov’t confiscating gold when it reaches to $2,000? Its not clear whats going on!

      4. I think the cheapest stock (relative to its potential gain) is PSLV.  I’ve been studying the silver markets for the past few years and this is the safe(est) ETF available because it is backed by actual silver (see that SLV!).  CEF is another good one.  I guess all of the good investments come from Canada.  Who’d guess?

      5. There is no telling if there will be a confiscation of gold, but it is a quite popular theory among many who would not even be considered conspiracy theorists. Marc Faber has claimed on several occasions that not only will your gold probably be confiscated, but also that you may very well not even be able to leave the country- much less move your money out. Predicting something like this can be very easy, but predicting the exact timing (or in this case the exact price at which gold could be confiscated) is extremely difficult.  Right now the biggest trades are oil and silver. I wouldn’t mess with gold at the momen to be honest with you. Oil is my first choice and silver is a far second. Faber predicts a pullback in precious metals prices “soon”, but he has been saying that for months so there is no telling how much further it will go up before the so-called pullback.

        But to Magnix’s point, the $2000 confiscation theory is mere conjecture – no matter how “reliable” this source is. If I were to bet if it would EVER happen I would definitely say yes. If someone else were betting that it would happen at $2,000 I would take that bet any day of the week. It will be $2000 before the year is up, and I don’t think gold is getting confiscated in the next year – just my take.

        For more, visit my site at


      6. @RafterManFMJ
        I don’t get it! Are you and Mushroom in bed together? What’s with the “new crisp $10 bills”? Why not $5, or $20?  It seems to me that you both work for Bernanke.
        Are there micro chips in these $10 bills you speak of?
        I’ll tell you what. I will own Gold, Silver, Farmland and $10 bills just because the two of you are so persistent (which also makes me wary) but I have nothing to hide. This way my ass is covered.  Please comment… Why New Crisp $10 bills, I just don’t get it!

      7. There is no accountablity for phyiscal gold and silver  in stocks and ETFs.  Do thay actually have the gold and silver in there stockpile or are you buying oversold thin air….?

        In hand precious metals would more suitable….

      8. Bangkokslim – watch SGTbull07 on YouTube – his Feb 17 video is an interview with Bix Weir. I don’t know a thing about Bix Weir, but it was an interesting video and highly relevant to this thread. He’s talking about dealers selling non-existent silver bars, etc.  Don’t know if the video will show here, but this is the link:

      9. Don’t buy silver paper guarantees, buy actual metal you can hold in your hand! When the market goes so does SLV! Pool your money with a supporting relative or co worker or the next door neighbor for that matter and split the monster box! 

      10. second the silver in hand!  plus it feels good and you dont get agida stressing over delivery–I hate when someone else has my money
        off to aldis tomorrow for more food

      11. This person RafterManFMJ with their $10 bills is retarded. What the hell would I want your stupid fiat money for? You used to be “Mushroom” something and you are still annoying. Take your Rx and stay off the computer. If you truly believe these bills will save you, then your stupid. If your just being a 12 yr old prankster, then you’re still stupid.

      12. You react strongly against the power of the freshly printed, new $10 bills – not even a cross of gold can protect you from their power; accepted all over the world, and treasured. Stock up, save them, protect them and they will protect you.

        Did the pirates of the Horn of Africa request gold? Jewels? Organ meat? No, the demanded crisp, new $10 bills for the hostages. Tellingly, Obama would not give them any, even though he can get them fresh from the source.

        Take a lesson, all of you.

      13. Well the trouble with circulated cash is that it is not clean enough to safely use as toilet paper.  Too much dog do-do, cocaine residue, and other questionable contaminates.

        Crisp uncirculated Trillion Dollar bills are another matter – feel free to stock your outhouses (’cause you ain’t gonna be affording any plumbing) with several crates of these.

        Remember – just because your money isn’t worth the paper it’s printed on, all that paper IS worth something if you can find a use for it.

      14. I’m sorry to tell you this, but that is a positive feedback loop.

        Positive feedback wants to amplify on it’s self and negative feedback wants to control make everything stable.  Kevin.

      15. @kingkang

        NO  NO  NO.

        the best silver equity is by far is AGQ.   a distant second is SLW.      the best oil equity is ERX. read about ERX, it’s very interesting.

        when the market crashes buy TZA, SRTY, MWN, FAZ…..make a fortune when stocks plummet…

        good luck from your friend.

        /s/ mushroom…

      16. Let me clarify!  I totally agree with the silver in hand.  That’s the safest way.  But I believe the next safest way is PSLV or CEF.   Here’s how I rank the best way to keep silver assets
        1. Silver coin/bullion
        2. PSLV or CEF
        3. AGQ (3x leveraged)
        4. SLW
        5. HL

      17. We keep hearing and talking about some event called “Collapse”.

        Some believe it’s coming in 10 years. Some believe this year.  Some believe it’s happening right now. And some even believe it has already taken place. I’ll tell you what, Collapse is not relevant in those terms, i.e. what you or someone believes or thinks.

        The collapse I’m referring to has nothing to do with earthquakes in NZ. Nothing to do with what’s happening in Wisconsin. Nothing to do with sabotaged oil fields in Libya. Nothing to do with the price of a gallon of gasoline. Nothing to do with the price of Gold. Nothing to do with what Charlie says or what Marc says. Nothing to do with what Mac says. Nothing to do with what I say.

        No, Collapse has to do with something else and here’s how it works-

        When you are cold and can’t get warm,
        When you are hungry and can’t satisfy that hunger,
        When you are sick and can’t get well,
        When you are tired and can’t sleep, night after night after night,
        When the bills are piling up and there’s not one cent in the “closed” account,
        When the police are knocking down the door,
        When you are trembling with fear and your body shakes uncontrollably,
        When the world appears to be imploding around you,

        When you experience any of the above, then, and only then, does the word “Collapse” have any relevancy to your life because then you “own” it. Until then, it’s non sequitur. Not lived, not felt, a make believe, illusory, fantasy world.

        So you see, Collapse, in those terms, will be experienced by billions of people, when the time is most appropriate. When the lesson comes knocking on the door.

        Fortunate are those who will never hear that knock.

        Heyam Dukham Anagatam

      18. New $10 bills? land way out where?in 1920’s-30’s Germany it took a Wheelbarrow full of the stuff to by just a few basics(and was almost worthless the next day).I’m talkin’ the big size too.Land is great but,the hoodlums have wheels as well. AND they usually travel in packs when they travel.Just read about what happened in the story about the “rich folks” boat(who else but the UBER Rich could afford to go cruising  in a large yacht in times like these?)   at  Blomberg’s site and take note. I  have to shake my head at the facetious,self -serving attitude of the Wisconsin governor.He and his cohorts CUT the general tax by almost as much as the deficit is now  in the state 1 year  before.Of course now it’s
        ‘ blame the UNIONS’ ” now they’re broke.My grand father said quite succinctly:a small amount of Gold and double that in Silver and land to grow your food.And be more than you appear(I think he might have been the first man I knew who dressed “shabby chic”).And FYI,it was Hitler who gave the elderly in Germany Social Security first,FDR took ours straight  out of Hitler’s play-book.The “very well-educated”,”intellectually  superior”, Bankers” and their Ilk in Germany were the ones who ruined the savings and retirements of the common person.Just think,they’re at it again! (think  “Goldies-Sakies” and “Federal-lies) Bankers” are doing today here in the good ‘ol USA. The rest is, as historians say, history.
        Beat to ALL and keep warm.

      19. Scott @6:09pm:  I wouldn’t split money,pm’s or anything with anyone!  Barter, yes.  What’s mine/spouses is  hands off to everyone else.  For the “bill collectors”  like Mushroom:   I collect clean $20’s, 50’s and 100’s bills with no ink smudges or dirty spots on them.    Must look like new.  The 5’s and 10’s  bills are used for take outs, eating out and dollar store items.

      20. New $10 bills?Safe and secure land to ride it all out in?In 1920’s-30’s Germany it took a Wheelbarrow full of the stuff to buy just a few basics(and was almost worthless the next day).Any bets as to when we see the first $1000.00 bills appearing ?As for the wheelbarrows,I’m talkin’ the big size.
        Land is great but,the hoodlums(regular and desperate hungry people as well) have wheels as well. AND they usually travel in packs when they go looking for what they need. Read about what happened in the story about happened to  the “rich folks” boat(who else but the UBER Rich could afford to go cruising  in a large yacht in times like these?)  at the  Blomberg’s site and take note. I  have to shake my head at the facetious,self -serving attitude of the Wisconsin governor.He and his cohorts CUT the general tax by almost as much as the deficit is now  in the state 1 year  before.Of course now it’s
        ‘”It’s  the UNIONS’ fault” now they’re broke.My grand father said quite succinctly:a small amount of Gold and double that in Silver and land to grow your food.And be more than you appear(I think he might have been the first man I knew who dressed “shabby chic”).Plus be as kind as you can to the poor.And FYI,it was Hitler who gave the elderly in Germany Social Security first,FDR took ours straight  out of Hitler’s play-book.The “very well-educated”,”intellectually  superior”, Bankers” and their Ilk in Germany were the ones who ruined the savings and retirements of the common person there.Just think,they’re at it again! Think  “Goldies-Sakies” and “Federal-lies Bankers”  and “pretend assistance” Repocrat programs to “help”(in word only!) people when they are having trouble with their mortgages here in the good ‘ol USA. The rest will be, as historians say, history.
        It does get a little tiresome.
        Beat to ALL and keep warm.

      21. Sorry about the double comment,I hit the “submit comment” twice by accident.Please cut one of them out(the first one,if you would be so kind).

      22. American European, well said, my thoughts exactly.

        There are many who have their heads buried in the sand right now, their opinion will Not change until they reach the condition you described. The ones I know received Fair Warning of the economic situation and received a Heads Up as to where the economic train would lead, it’s their peril for ignoring the clues and scoffing at every bit of advise.

        Oh, and GrayFoxGreen, perhaps you did or didn’t know, from what I read over at TheDailyBell, the Western P.E. financed the Bankers” and their Ilk in Germany… the ones who ruined the savings and retirements of the common person there. Same as it ever was.

      23. There are only a few barter items in the initial stages of a meltdown. 

        Consumables, cast-iron cookware, knives, firearms and ammunition, fishing line and hooks.

        Tribes will congregate where they can find food and water, a warm, dry, safe place to sleep, sanitation, and something to work toward.

      24. The article could well be true.  The other night, a congressman was on the radio discussing their best budget scenario would only reduce, not eliminate, the deficit.  That means the outgo would exceed the intake…and likely for a few more years.  I doubt they could raise taxes successfully….though with fewer workers paying in, they might have to raise on the rest of us.  Seems the only thing left is either printing or borrowing from foreigners (and then not be able to service the debt).  

        Either way, the pressure will be on the gov’t to cut spending.  Gov’t spending is huge…and that will cause even more to lose their jobs (gov’t employees or in the businesses that sell services to the gov’t).  The vicious cycle continues, but for how long?  Will we finally hit a sustainable level, and end the cycle?  Perhaps we would, if we existed in a vacuum. 

        But we are not in a vacuum.  There are too many other forces at work…other nations, other organizations, threats of war…. 

      25. Some feedback through the courtesy of

        “Consider adding a $40,000 down payment to your scenario (5% of $200,000, 29% of $140,000).

        OK, I did it for you:

        Home Price: $200,000
        Down Payment: $40,000
        Amount Financed: $160,000
        Current Rate: About 5%
        Monthly Payment: $859
        Total Payments Over 30 Years: $349,209

        or, waiting until rates rise and prices decline 30%:

        Home Price: $137,874
        Down Payment: $40,000*
        Amount Financed: $97,874
        Rate: 10%
        Monthly Payment: $859*
        Total Payment over 30 Years: $349,209

        * Scenarios assume the buyer has $40,000 available to make a down payment and based on his income and credit rating, is qualified for a loan with a maximum monthly payment of $859.

        “…prices decline 30%…”
        I guess in my scenario, the price decline would be
        ($137,874/$200,000-1)*100% = -31% — close enough to your assumption for government work.

        The only thing missing from the above story is the option to refinance at a lower rate. If rates start out at 10% and go down, you might be able to refi into a lower monthly payment loan later on; if they start out at 5% and rise, you will never be able to refi into a less expensive loan.

        …I would start out my scenarios assuming that whatever money is available for a down payment and for a monthly payment will not be immediately affected by higher interest rates. The thing missing from my scenario is inflation, which would tend to go hand-in-hand with the 10% interest rates. In that case, the real value of the total payments of $349,209 would be lower with 10% interest than with 5%.”

      26. remember your vitamins, amino’s, protein powders, and essentials oils for your shtf stock pile folks… your bodies immune system / health during times of stress will appreciate the above nutrients… and buy a decent pistol one and all… your gonna need it.

        Why We Haven’t Opened OUR Oil Wells Here!!!

        My husband grew up and graduated(1969) with many ‘pipeline’ guys; talks to them often. They have reported for YEARS that when they drilled, and found oil, they capped it and moved on…, discover why those wells were never opened and used.

        Alex Jones talks to Pastor Lindsey Williams detailing Bush Sr’s New World Order | T-Room

        Alex Jones talks to Pastor Lindsey Williams detailing Bush Sr’s New World Order Targets Iran & Saudi Arabi Next, Oil to Hit $200 a Barrel

        My notes, condensed:
        OPEC made an agreement with all oil nations except Iraq and Iran in the 70’s.
        These oil nations own our federal reserve bills/bonds.
        This was accomplished by our president agreeing to not produce any oil here and buy only OPEC oil.
        In Alaska, one of the biggest deposits ever was found on Gull Island.
        The ELITES are destabilizing the oil nations to intentionally take the oil barrel prices to $200.
        The standard currency in a sense isn’t the dollar-it’s crude oil- and the elites have been sponsoring the MUslim Bro. since the 70’s, as long as they hold our federal reserve bills and we don’t produce oil here.
        But, the elites in 2012 will reneg on the deal, leaving the Arabs holding worthless dollars; therefore, oil will be cut off to us leading the need to open our wells and produce here.
        Remember when Pastor Wms’ dying friend said watch Russia and China??? forget about the ME????
        China made an agreement to buy all Russia’s oil (huge oil wells there)so China will not be affected by this mafia-style deceit and will remain independent of the U.S–they don’t need our oil.

      28. I wish someone would describe the financing correctly. Bernanke is NOT printing money. He is borrowing money from  your local banker under the Reverse Repurchase Agreement of the federal Reserve Act. Look it up!  First, he sets the interest rates, then he borrows the money from YOU at less than 1% and dries up the local money supply. This stagnants local economics and he follows through lying ,calling it stimulus. The Internationalists are skewing things in their favor and destoying The Nationalist Economy. Such happens when you lose World War Two.  GCL

      29. Gary Lambert, you’re merely describing one of the tools available to the Fed to increase/decrease reserves at primary banks.

        I think what Faber is referring to is the normal method by which money is created, which is:

        1) US Treasury drafts a note/bill
        2) Federal Reserve buys this note/bill at auction (assuming no one else does), being the “lender of last resort”
        3) US government gets their new money and deposits it into government accounts, from which it uses to pay its bills
        4) Through the magic of fractional reserve banking, this newly created Federal Reserve money, now called “reserves”, is used to create a multiple of new money through lending institutions throughout the country. So if $1 million is in reserves then $10 million is made available for loans (theoretical maximum – in reality it is somewhat less).

        Now, whether the money is printed or entered into computer by keystroke does not matter. Some physical money will be required for everyday commerce so yes there is some printing. But the basic premise is money is created from nothing, whenever the US government needs it. There is a price to pay however. And that is inflation which we the people must bear.

        And the worse the economy gets and the more boneheaded legislation the government tries to pass to prop up this phony economy, the higher their spending and greater the need to “borrow” from the Federal Reserve, thanks to the one oversight (omission?) by the Founding Fathers by granting the government the power to borrow money when it sees fit.

      30. “Faster than a speeding Republican, more powerful than a local Tea Party, Able to leap tall constitutions in a single bound! Look! Up in the sky. It’s a bird, it’s a plane, it’s a skinny black dude in a cape! It’s SUPER-BAMA”    Honestly, I’m just waiting too see what happens next. In the economy or in the idiotic response from waste-ington dc. I think I’m beyond being shocked. Maybe I’m just getting comfortably numb. (apologies to Pink Floyd)

      31. Good point Clark.

        Provided your contract doesn’t have sizeable penalties for advance payment, you can substantially reduce you total interest paid by making advance payments on the principle with each regular payment.

        Look at amortization tables.
        EuroAm. Yep. The trick is to recognize that this isn’t just one neighbor, but several and you see others struggling. Once you begin to see this, you know this is at least a regional collapse and probably much larger.
        If you don’t have it physically in your hand, you don’t own it. Ownership denoted control.
        The quantity of oil on the market will meet market demand. The market might be willing to pay $1000 a barrel. The question is can we afford to enter the market? If no, we are not market demand. Even if I demand access to cheap gas, I’m not in the market. Gull Island isn’t that big. Recall, I’m in Alaska and with the PFD driven by oil production, we keep a close eye on discoveries, lag-time to production, production figures, pipeline capacity used, etc. We watch OPEC very closely.
        When you are crossing a barren desert and you see a sign that says, “Last Gas for 200 Miles”,  what do you reckon you oughta do?

      32. Comments…..Gold will never be confiscated again.  The reason Roosevelt did it was because the Federal Reserve wouldn’ t print up more money, because the US didn’t have enough gold to back it.  Roosevelt therefore confiscated the gold, raised the price of gold after he confiscated all of it, and demanded that the feds print up more money, so he could get on with the new deal. We’re not on a gold standard now and they can run the printing press with reckless abandon, so they don’t need to confiscate gold to print all the money they want to, therefore, Geitner, Bernake, and Goldman Sachs can continue  delivering the raw deal.  A more serious concern is the G-man changing the rules on Pension Plans (403 Bs, 401Ks, etc.) so they can more quickly access this money.  But all you Leps can bury your gold in the back yard if it makes you feel more secure.

      33. Billy- The Exchange Stabilization Fund created by FDR enabled the President. in secret consultation with the Secretary of the Treasury only, to change the dollar value of our gold reserves. Roosevelt planned to expand the money supply to fund an alphabet-soup variety of government programs (TVA, CCC, etc) by devaluinf the dollar from 20.67 to 35 to the ounce. Remember, Americans were literally paid in gold up top that time- the  gold receipt( paper dollars) were exchangeable for gold. Roosevelt’s decision to act as a dictator distributing funds where he saw fit requited him to seize gold from the citizens at the old rate- and never allow therm to have it back (tellingly, foreigners, but not his fellow citizens were still accorded the right to exchange their dollars for gold, at the new rate.)
        This expansion of money did not require Fed input- but in 1968 they did begin the process by which they now own, through SDR’s what we like to think of as “our” gold in Fort Knox- or wherever it is. And so any attempt to confiscate gold would lead to the rather implausible demand that the Fed(who claimed, when submitted to a FOI demand by Judicial Watch  to be exempt, as private citizens),  and who have  worked since 1913 to obtain ownership of all the gold, to give it back.
        Just as FDR attempted to manage the economy in 1933 as a de facto dictator, the Fed, through “Quantitative Easing” is attempting to distribute trillions to the banks that own it at as close to no cost (i.e., 1% interest), and would be happy to bankrupt the middle class through inflation (which concerns them not, as they own the gold.) Read this:
        Finally, I ask you- how could Roosevelt have accused Americans of “hoarding” gold when that was what they were paid in?  See:
        Executive order: By virtue of the
        authority vested in me by Section 5(B) of
        The Act of Oct. 6,
        1917, as amended by section 2 of
        the Act of March 9, 1933, in which
        Congress declared that
        a serious emergency exists, I as
        President, do declare that the national
        emergency still exists;
        That the continued private hoarding
        of gold and silver by subjects of the United
        States poses a
        grave threat to the peace, equal
        justice, and well-being of the United
        States; and that appropriate
        measures must be taken immediately
        to protect the interests of our people.

        “Therefore, pursuant to the above
        authority, I herby proclaim that such gold
        and silver holdings
        are prohibited, and that all such
        coin, bullion or other possessions of gold
        and silver be tendered within fourteen days
        to agents of the Government of the United
        States for compensation at the
        official price, in the legal tender of
        the Government. All safe deposit boxes in
        banks or financial
        institutions have been sealed,
        pending action in the due course of the
        law. All sales or purchases
        or movements of such gold and
        silver within the borders of the United
        States and its territories,
        and all foreign exchange
        transactions or movements of such metals
        across the border are herby prohibited.

      34. As a footnote to the observation that QE1- QE to the nth power are simply a means by which the Fed, working hand in hand with its banks (and a Congress enabling the process through the creation of unlimited new national debt) is this following exerpt from a Feb 18 NYT article by Liz Alderman.
        It is taught in ECON 101 (The Samuelsen edition) that “savings is the engine of investment.”
        And so, you might ask, what is a better way of poisoning the investment well than by denying savers any return on their savings- and here we are talking about Bank of America, Citi and the rest paying some  miniscule fraction of one percent per annum. It would not take much, you say, to divert enormous streams of saving to some place that did not treat the saver like Rodney Dangerfield. And that is exactly what China has done (which raises the question, “Who is the capitalist?”):

        China and other emerging markets have blamed the Fed’s strategy for sending waves of capital rushing to their shores, creating a threat of inflation. But Mr. Bernanke said the influx of capital appeared to be driven more by investors’ desire to get a higher return in emerging economies than by the Fed’s policies.He admonished emerging nations to acknowledge that they have “a strong interest in a continued economic recovery in the advanced economies,” and said they should consider deploying their own tools — including adjusting the level of their currency — to manage their economies and prevent overheating.

      35. a correction: I forgeot to put Ms. Alderman’s comments in quotes (the rest was my own rumination): “China and other emerging markets have blamed the Fed’s strategy for sending waves of capital rushing to their shores, creating a threat of inflation. But Mr. Bernanke said the influx of capital appeared to be driven more by investors’ desire to get a higher return in emerging economies than by the Fed’s policies.He admonished emerging nations to acknowledge that they have “a strong interest in a continued economic recovery in the advanced economies,” and said they should consider deploying their own tools — including adjusting the level of their currency — to manage their economies and prevent overheating.”

      36. Hahaha   You listened to Lindsey williams on AJ’s show too  :-)  I don’t listen to AJ much, dont like his personality, but I got a tip from a cousin back home in Iowa that he was going to have LW on so I tuned in for it….pretty interesting to say the least. Time will tell  if he is right AGAIN!

      37. European American
        February 22nd, 2011 at 8:57 pm

        IMO you have one of the best comments.  The only thing left out of Collapse is who owns the land when you don’t anymore.  That was the point of the 1889 book, The Great Red Dragon, subtitled Foreign Money Power In The United States.  The goal by the financial sociopaths was to “own the earth in fee-simple.”  Now we know how they intend to try to pull that off. DEBT!

      38. All markets historically return to mean.

        We are presently only 20 -30% down from 2006-7 highs, depending on market area. To return to mean (and possibly below), the market MUST decline 75 – 90% (again, depending on market) from its historical bubble Mars shot.

        Consideration of present home prices and interest rates in regard to purchasing residential real estate is attending an auction of furnishings aboard the listing HMS Titanic.


        With a 35 million residential housing surplus and a future domestic economic situation rivaling that of Cuba in the 1960’s, it will be several generations (60 years) before real estate begins an upward move again.

        One thing may change this. Massive (and I mean M-A-S-S-I-V-E) Chinese immigration into America to oversee their assets and properties purchased for pennies on the dollar with trillions in US$ Treasury notes. Just such a deal was said to have been made by the bitch Hillary about two years ago in her last visit to assure and guarantee continued purchase of US government paper.


      39. Precious metals, radios, etc
        confiscated ww2 (axis).
        Oil: often nationalized (1 uk bank now ’11).
        Mines etc often highly taxed.
        Posted via

      40. Well, even if i kind of respect Faber, when he talks about morgages, there’s obviously something he doesn’t get!
        Even if the mortage rates are at 5% today, i doubt you can freeze it for 30 years at 5%! The total amount is far from reality then! So the exemple he shows is clearly irrevelant. If you renew your mortage in 5 years and rates are at 10%, the bankers won’t make you a gift and charge only 5…

      41. In my opinion it is unlikely that gold will be confiscated again.  If that ever does happen, you can be sure of two things.  First, the US economy will have already collapsed into a huge mess, and probably the Fed will have been abolished.  And second, quite likely people will already be rising up in the streets.

        You have more to worry about the Government confiscating your 401K holdings.  Some countries in E. Europe have already nationalized peoples’ reitrement money.  That is a complete scam!  Do NOT let them do it in America.  You need to defend your nestegg – whatever it is.

        If the Gov’t attempts to confiscate people’s real property, such as land, 401K holdings, or gold, then I think we might really see a popular rebellion in this country.  How could they enforce it?  Are they really going to come door-to-door to demand your money?  It’s unworkable.

        Bernanke is well aware that going back to a gold standard is not even an option at this stage.  The amount of debt that has been generated by the US Government could never be handled by taking ownership of a paltry amount of gold or silver.  Worse still, the entire value of financial derivatives today vastly exceeds the total GDP of the world (many times over).  It’s a completely ridiculous situation.  Some type of global crash seems increasingly likely, although the exact time is far from certain. 

        Avoid fear.  Accumulate land, gold & silver, hard assets, food for your family,  weapons (if you need them), and plenty of compassion for your neighbors.


      42. Comments…..The problem here is when holding pms. Say it does go to say $2,500 an ounce.  an stays there. Doesnt float up or down. An its been there say 3 months. So you decide to sell thinking it not going higher. an taking massive profits you think your a huge winner. Wrong. The gov next month decides to weaking the dollar saying its worth 50% of what it was. or worse yet saying the dollar is totally worthless the gov goes bankrupt. An declaring a new one word money.

      43. Should you believe in the credit cycles and credit bubbles then a dramatic & precipitous decline in asset prices can not so easily be ignored. After each & every asset bubble inevitably comes the collapse of asset prices before values can one more time be tied into an intrinsic valuation.

        Very important thing for you to keep in mind is bust/boom cycles can lead into a progressively higher and higher debt levels and lower and lower interest rates until ZIRP is a reality for the economy. Then your Australian RBA can not again stimulate your real estate market and a most serious decline will almost certainly occur! In short it is not different there, no more than anywhere else!

        My view, it is Australia holds enviable position in being 1 or 2 more “credit cycles” distant from ZIRP policy before your country must face a fate of severe decline and slowing down of growth like United States of America & Japan. United Kingdom to a less extent is closer than Australia yet farther than aforementioned United States and Japan from serious Credit Crunch. Most certainly you may make a profit in riding the next 1 or 2 debt cycles but your challenge as always it will be exiting your market in good time.

        My view is GDP vs credit ratios will be rising with progressive debt cycles and the official interest rate range, being the counterpoint of GDP/debt levels, will decline until ZIRP polity and a disruptive and game changing reset of the credit system occurs with the final and most serious of credit crunches!

        This is explained best in my blog about the credit crunch!

        The bulls can take heart from this, there is to be a larger credit bubble and asset bubble to come in your country before the ultimate collapse!

        ZIRP policy is a controversial one! In the countries where economies collapsed and they brought in the ZIRP to make investing more attractive it frequently fails. My view, this is poor policy as it is unclear if it ever will achieves its intended outcome. In reality it can descend countries into a “liquidity trap” and a more insidious slow down and deflation of the economy that feeds on itself.

        Japan persisted with a ZIRP model since 90s when their real estate and equity markets crashed but their economy it stagnates since then. The USA are following Japan’s failed model foolishly I believe and with same result I fear!

        Zoran Slaveski
        <a href=”″>Credit Crunch Forum Blog</a>

      44. One thing I fail to understand is that why most analysts are recommending the purchase of Gold as a safe investment? The problem today is that the price of Gold is not derived by it’s physical demand or supply but more by the speculative positions standing long or short on the commodity exchange like any other traded commodity, stock or currency.
        The basic mechanism of price discovery (based on demand and supply for actual use) of anything traded on an exchange has been terminally infected by speculators having access to unlimited funds and super fast computers for trading leading to volatile price swings. This has been made worse by the launch of ETFs for anything and everything under the sun by the financial community.
        The price of everything including Gold is likely to suffer when the speculators unwind their positions due to some event that they have not anticipated or foreseen.

      45. this Row boat? , does it have a  cabin,fishing gear, fresh water catchment, …a sextant?, its a nice analogy( they often are ) the nitty gritty non -virtual screaming reality, is another sort of beast!, even the guns for lunch bunch, kill the goose?, then you have to work , or become a cannibal, ah these endless scenarios , spent a winter in Aspen , ( old days!!)eating moose burgers, the moose hung in the old barn, frozen like
        rock, an axe , , some fire, and moose burgers !, skiied all day though!

      46. Kevin has all of his eigenvalues in the left hand plane. . .

      47. Housing Will Remain Weak For Years (Decades)

        The state of housing is often quite different than picture painted by headline interpretations. The game of perception often suggests that the worse is over in the real estate market. It is not. New home sales continue to contract as supply swamps demand. The sharp and steady decline real or currency adjusted prices reflects cycle weakness that will take decades to overcome.


      48. Regarding fears of confiscation of precious metals, should it come to pass, it will not be accomplished with a suit and a sidearm, nor a helmet and a rifle, but a yarmulke and a pen!

        iShares Silver Trust (SLV) scam exposed

      49. @RafterManFMJ

        You are such a buffoon, trying to be clever. Nice try though! After reading this, I won’t care if you understand the obvious. Besides, what diseases could be mixed in with the ransom money? It’s well known what occured with Columbus and later explorers to the New World with blankets of Plague. It can’t happen with physical silver because of the biocide properties of this incredible metal.

        You didn’t even consider the present Middle East unrest and the leaders who have departed their countries for greener pastures, or was that conveniently dismissed, hoping us sheeple wouldn’t suss you out?

        What did THEY flee with? Ben Ali and Moubarak both left with whatever GOLD and small amounts of SILVER they could hoard.


      50. Getting involve into stocks would be a great deal. I would be glad to know about stocks and the best way to choose the stock investment. I am sure this will give you more money and be able to gain additional income.

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