Thursday, March 6, 2014

Money Printing enrich people with Real Assets

TD: Marc, in your dealings with people around the world, what have you noticed are some of the characteristics that lead to the building of wealth as an outcome?

Marc Faber : Well, it’s a funny story. I went to a high class school in Switzerland. Not that we were rich, but I was in this class, and in the class there were several very well-to-do Swiss family members. The children of these families, most of them have no more money. One still has a lot of money because his grandmother in her youth was studying in Paris and she took a liking in the 1910-1920s impressionists. So they have Van Goghs and Renoirs and Matisse, even in the toilet they have so many of them. The appreciation of these paintings was fantastic.
Another one is well-to-do because he inherited money from an uncle of his. So it’s funny that some entrepreneurial families that were – especially at that time, in either construction or in the textile industry, they are all essentially gone. But the largest wealth of my school friends came from inheritances.
Then when I came to Asia, I liked Asia in 1973. I went to Hong Kong because people were very entrepreneurial and risk takers. It’s like they like to gamble and they’re not afraid. In Switzerland everybody is always afraid to lose money, but in Asia they take risks and some of the entrepreneurs became immensely rich. Immensely rich starting from zero.
These are people that were frugal with themselves. They worked very hard and they were also benefiting from asset inflations. In Hong Kong property prices have gone ballistic over the last 30, 40 years. So anyone who owned properties became automatically very rich. I’m saying this because I am of course completely against money printing as the central banks do, because they enrich basically people that own assets. And the people that don’t own assets, their wealth or their standards of living are going down. That creates then a growing wealth and income inequality that then leads to social unrest or geopolitical problems.  - in bullmarketthinking Click here to watch the full interview

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.

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