Dr. Marc Faber discusses the Chinese bubble, the US bubble, PIIGS, gold, oil, reserve currencies, and geopolitical considerations on February 5, 2010.
If you ask me about the correction in the gold market, yeah for sure there will be corrections. We already corrected more than 10% from the peak and I think the correction can last somewhat longer.
But when I look at Mr. Obama, and at Mr. Bernanke, and at Mr. Tim Geithner and Larry Summers, the one thing I will never do in my life is to sell my gold.
Dr. Faber argues that all of the governments in the Western world will go bankrupt because of excessive spending, and in the lead up to banruptcy we will see out of control monetary policies:
I’m convinced that the US government will go bankrupt, but not tomorrow. And before they go bankrupt they’ll print money and then you’ll get very high inflation rates. Then you get a depression with high inflation. Eventually they’ll go to war.
While an argument for deflation in terms of a credit contraction can be made, Dr. Faber addresses the other view. As our government goes further into debt and economists like Mr. Bernanke attempt to prevent the ‘threat’ of deflation, they will have no choice but to print more money.
Considering that the system has been floated for years already, it is not out of the realm of possibility that the system will continue to be floated for years to come. It is difficult to predict exactly when the breaking point will be, but be assured that the bureaucrats will take us as close to the break point as they possibly can. And if history is any guide, we can be certain that they will not only take us to the breaking point, but blow right past it until the system itself literally falls apart on a massive economic, political and social scale.
Marc Faber / Russia Today: