Monday, August 27, 2012

Marc Faber : The Fiscal Deficit in the US is an insurmountable Problem

Marc Faber : ..I think the debt situation the fiscal deficit in the US is in my view an insurmountable problem , it does not matter who is in the white house the republicans will have a deficit of around 1.3 trillion next year and the democrats will just spend it on different things but the deficit will still be there and that deficit over time will have to continue to be monetized and eventually there will be a depreciation of the purchasing power of money as had happened over the past ten years eventually since the foundation of the federal reserve , so that paper money loses value over time is very clear because the temptation to print money and to have deficit is very high in democracies in particular , so I think there is a risk of hyperinflation , the question is this , if you print money you don't really where the money that is been printed will flow to , it can create inflation in India it can create inflation in China and eventually it will also create inflation in the western world , but it is conceivable that before we have this hyper inflation we would have a deflationary shock and then the central banks knowing nothing else will print money like water and don't forget say the political elite and their cronies who are in the corporate sector they all benefit from asset inflation so if there was a deflationary shock and the market sell off by thirty percent even the republicans will suddenly say well we need more money printing ..... - in Goldseek Radio interview
Click here to listen to the whole interview>>>>


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