Notes: I received many emails asking why I like Marc Faber so much. as he is so dark, so bearish, so crazy. I agree he is but he is also extremely talented. As a prime bear, the first thing Marc says is always the same: I am ultra bearish on everything. It is the same as we say: in the end, we all die. To read Marc, you should skip all bearish comments and only pick his action calls, which 90% are mid term correct. He has been calling for bond to dip for a while and I do agree it's going down hill.
Marc Faber spoke to CNBC this morning about U.S. monetary policy decisions and the threat of an emerging markets bubble. He was joined by Frank Berlarge of Multilateral Partners Global Advisory Group.
0:30 Faber: The cause of the crisis is excessive monetary growth leading to excessive debt growth to the NASDAQ bubble to the housing bubble to over consumption in the U.S. A symptom of overconsumption is a trade deficit, which then exports production overseas.
1:20 Faber: The developing world should send a thank-you note to Mr. Bernanke.
Frank Berlarge of Multilateral Partners Global Advisory Group talks about the importance of foreign inflows to the U.S….
3:35 Faber:A dream to think the U.S. can double its exports in the manufacturing sector, but the U.S. can export more in the agricultural sector.
Berlarge then argues that the U.S. can grow its exports; doesn't see a doubling without tax policy.
5:15 Faber: Criticism from emerging economies towards the Fed is all about worries over bubbles forming "too much of a good thing." When those currencies deflate, people jump in, and asset prices surge. The excess liquidity is running into emerging economies and precious metals.
Berlarge talks about how we're not going to be get out of this mess without inflation, and Bernanke is acting as a janitor, cleaning up the mess. The threat is to the banking industry, and that's why he's trying to prop up housing markets.
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