Monday, March 18, 2013

Marc Faber : Every Inflation is Followed by Deflation

David McALvany : With over 40 central banks setting rates at or near zero percent, there is the potential for problems to arise in almost every part of the globe, and perhaps this fits the earlier question: Where would you see opportunities, where would you see risks, and should we have any concerns lingering in terms of the old inflation versus deflation debate?
Marc Faber : It all depends how you define inflation. Normally, some people think, like the Fed Chairman, that if consumer prices go up, that is inflation. He doesn’t look at rising stock prices, rising art prices, rising real estate prices, rising collectables pricing, or rising commodity prices, as a symptom of inflation. But these are symptoms of inflation. They arise usually because of too much money printing.
I look at it this way. Every inflation eventually comes to an end, and is followed by deflation. I just don’t know when the deflation in stock prices will happen. To some extent, it already happened in the gold market. To some extent it already happened in the real estate market. It hasn’t happened yet in stock prices, but that is likely to happen as well sometime in the future. And when it happens, I think the consequences for the real economy will be negative.-
in McAlvany recent interview , Click here to watch the full interview >>>>


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