One of the leading investors Marc Faber expressed his opinion that the Federal Reserve currently has no other alternative but to print more and more money in order to sustain USA credit addicted economy. Meanwhile, the investors around the globe are expecting for an official announcement of another round of Fed balance sheet expansion may be losing ground in the next leg up in precious metals prices—and in oil and other commodities prices.
Faber is far from optimistic about the future, since there is no clear plan from the United States to cut military and 'entitlement' programs. To add to that the growing $1.5 trillion U.S. budget deficits does not make the whole picture prettier. The Swiss money manager is concerned that the only way Washington to alter the course of runaway consumer prices is through the destruction of the U.S. dollar’s purchasing power.
Mr. Marc Faber shared his opinion that the Federal Reserve will never again implement tight monetary policies. He thinks that they will print and print and print. Faber explained that the neo-Keynesians do not acknowledge that excessive leverage and levels of debt in the financial system are the root cause of the four-year-long global recession.
According to Faber, the official position of the government and its unwillingness to address the problem of an over-leveraged banking system and excessively indebted economy was made, means that more of the same monetary drug is recommended. "They cannot afford to have a debt deflation in a credit addicted economy," Faber continues.
The Swiss guru pointed out that the easiest way for the politicians to postpone the fall of the system is to keep helping the bankers printing money. The history reveals that there are always politicians involved in the way to hyperinflation and it is not entirely an economy issue. Of course, nobody wants to be in charge when the system crashes from its own weight.
Each elected and appointed policymaker knows that the ramifications of hyperinflation include civil unrest, violence and revolution—either peaceful, or not. "I tell you, sovereign credit in the Western world, they’re all bankrupt," states Faber. "But before they officially go bankrupt and can’t pay, they’re going to print money and massively so. That should be very clear. That’s the easiest way politically to postpone the hour of truth."
If Americans do not wish to turn back to the history, they might consider some current examples that reveal to where this road is leading. Greece, Spain and Italy is not ancient history, it is something that happens here and now. And according to Faber, there’s virtually no turning back for the Fed and its complicit partners in monetary crimes, the the European Central Bank (ECB), Bank of Japan (BOJ), Bank of England (BOE) and Swiss National Bank (SNB).
