SMN: Do you think that’s because of a lack of real-world experience that they have?
Marc Faber :
Partly, because, you see, for investors, Bernanke comes out very well
as the man who saved the financial system. Why did we have a financial
crisis in the first place? Because the central bankers, mostly the Fed
in the US but also the Bank of England and incidentally, also in Canada
and Australia, they paid no attention to excessive credit growth, and so
you end up with an over-leveraged system and with boundless speculation
in financial assets.
Then the crisis happens and they print money, and everybody applauds.
Of course, they applaud the funds manager because the water level in
the bathtub has increased by money printing. The asset values of
portfolios go up and the fees fund managers earn also go up. So they’re
all very happy.
But the man on the street, he’s a little bit less happy because his
wage is going up less than the cost of living increases. In real terms,
he’s losing out. That’s why, if you look at, say, corporate profits,
they are extremely elevated in the United States as a percent of the
On the other hand, wages and salaries as a percent of the economy are
at record lows. So you have, essentially, through money printing,
created financial wealth and impoverished the working class, like you
SMN: The rich get richer, basically.
Marc Faber : Yes. I’m not complaining about it, because
I’m also benefiting from it. I’m just saying you’re not going to build
sustainable, permanent economic growth with these kinds of policies.
Something will give one day.
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Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.