Tuesday, June 4, 2013

Marc Faber: The whole Financial System could blow up due to the huge amount of Derivatives still outstanding

The Gold Report: If we were to solve the economic crisis, would that solve the banking crisis?
Marc Faber:  In my view, the European economy will not suddenly recover. It has too many structural problems. One way that the so-called "banking crisis" could be resolved, though, is to let inflation rates rise. Asset prices would then shoot up, and loan portfolios would be better covered. But I do not really think that inflation is the solution.

The Gold Report: It would be a painful solution.

Marc Faber:  The danger is that the whole financial system could blow up due to the huge amount of derivatives still outstanding. Once again, excessive speculation is being fueled by artificially low interest rates, and asset bubbles exist everywhere.


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