Saturday, July 6, 2013

Faber - Brace For Financial Destruction & Sovereign Defaults

“What is the biggest danger in the financial world as you see it?”


Faber:  “I think we have many dangers.  The biggest danger is governments themselves with their interventions into free markets, and their fiscal policies....


“In other words, increasing or decreasing government spending.

Usually it’s an increase, and as a result the government becomes larger and larger.  Of course the larger a government becomes, the less economic growth you will have.  The extremist, socialist-to-communist economy that we had in the Soviet Union and China, it was a complete failure economically speaking.

The other danger is that the Federal Reserve and other central banks around the world, they think they can essentially steer economic activity by printing money.  This money printing has a number of unintended consequences that will eventually be very costly.

It’s not the first time the Fed has intervened.  They intervened after the S&L crisis, after the Tequila crisis, after LTCM in 1998, and then after (the year) 2000 when the Nasdaq collapsed.  They kept interest rates artificially low which led to a credit bubble, the housing boom and subsequent collapse.

You can postpone the problems by printing money, but then the problem comes back to an even larger extent.”

Read more @KingWorldNews.com 

No comments:

Post a Comment