Thursday, August 29, 2013

Marc Faber: The U.S. Government Debt will continue to increase

HAI: It’s been awfully quiet in Washington after a series of battles over the debt ceiling and the fiscal cliff in 2011 and 2012. Do you see any political risk lurking either in the U.S. or elsewhere?

Marc Faber: It’s a fair assumption that the U.S. government debt will continue to increase. And it’s also a fair assumption that the U.S. and other central banks around the world will continue with the monetization of the debt.
To what extent there will be a battle in Congress between the Republicans and the Democrats over the debt ceiling and about spending cuts is anybody’s guess. But the facts are that the U.S. government debt took 200 years to reach $1 trillion in 1980; we were at $5 trillion in 2000, and we’re now around $17 trillion. You can clearly see where the trend is.
And the deficit will actually start to increase shortly a) because of the increase in interest rates; and b) because more and more people are retiring, so the entitlement programs will increase. I do not see the debt in the U.S. diminishing. The question is, Will it increase by $1 trillion annually or $2 trillion; who knows?





Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

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