On the most crucial fed day of the year and with the taper now off the table, he is joining us with some choice words for chairman bernanke.
Marc, always a pleasure to talk to you.
What is your reaction to this news that there is going to be no taper?
Well, thank you for having me on your program.
My view was that they would take her by about 10 billion -- they would taper by about $10 billion to $15 billion, but i'm not surprised that they don't do it for the simple reason that i think we are in qe unlimited.
The people at the fed are professors, academics.
They never worked a single life in the business of ordinary people.
And they don't understand that if you print money, it benefits basically a handful of people, not even 5% of the population.
3% of the population.
And when you look today at the market action, ok, stocks are up 1%. silver is up more than 6%, gold up more than 4%, copper 2.9%, crude oil 2.68%, and so forth.
Crude oil, gasoline are things people need, ordinary people by everyday.
Thank you very much.
The fed boosts these items that people need to go to their work, to heat their homes, and so forth.
And at the same time, asset prices go up.
But the majority of people do not own stocks.
Only 11% of americans own directly shares.
Hang on, marc.
Because people need mortgages when they are starting families.
A lot more people need to get out of their house -- their parents' house and buy their own.
Cars are old.
The interest rates are being held down when the fed continues this type of policy, no?
On september 14, 2012, when the fed announced qe3, that was extended into qe4, and now basically qe unlimited.
The bond markets have peaked out.
Interest rates have bottomed out on july 20 5, 2012, a --jul -- july 25, 2012. mr.
Bernanke said at that time at a press conference, the objective of the fed is to lower interest rates.
Since then, they have doubled.
Thank you very much.
Is this the unintended consequence of all the money printing?
What is the endgame?
Well, the endgame is a total collapse, but from a higher diving board.
The fed will continue to print and if the stock market goes down 10%, they will print even more.
And they don't know anything else to do.
And quite frankly, they have boxed themselves into a corner where they are now kind of desperate.
There is going to be a new head of the federal reserve.
Expectation is that it is going to be dr.
Do you think we will see any changes when she comes in?
Yes, we will see a huge change.
She will make mr.
Bernanke look like a hawk.
What do you think she is going to do, marc faber?
She, in 2010, said if she controlled -- could vote for negative interest rates, in other words, you would have a deposit with the bank of $100,000 at the beginning of the year and at the end, you would only get $95,000 back, that she would be voting for that.
And that basically her view will be to keep interest rates in real terms, in other words, inflation-adjusted.
And don't believe a minute the inflation figures published by the bureau of labor statistics.
You live in new yokr.
You should know very well how much costs of living are increasing everyday.
Now, the consequences of these monetary policies and unofficially low interest rates is of course that the government becomes bigger and bigger and you have less and less freedom and you have people like mr.
De blasio, who comes in and says let's tax people who have high incomes more.
And, of course, immediately, because in a democracy, there are more poor people than rich people, they all applauded and vote for him.
-- they all applaud and vote for him.
Let's talk about some master clase -- soem -- some asset classes.
Where do you see gold heading?
When i look at the market action today, i would like to see the next few days, because it may be a one-day event.
The markets are overbought.
The feds have already lost control of the bond market.
The question is when will it lose control of the stock market.
So, i'm a little bit apprehensive.
I would like to wait a few days to see how the markets react after the initial reaction.
It is a good point.
We saw the 10 year yield come down -- the 10-year yield come down as the price shot up momentarily.
But from the levels we are at, it does not look like they are having too much of an effect, at least not as much as they would like on the 10-year yield.
Do you think that will float back up?
I will confess to you, longer-term, i am, of course, negative about government bonds, and i think that yields will go up and there will be some default.
But in the last few days , when yields went to 2.9% and 3% on the 10-year for the first time in years, i bought some treasuries.
Because i have the view that they overshot and that they could ees down to around two point -- could ease down to around 2.2% to two point five percent because the economy is much weaker than people think -- 2.2% to 2.5 % because the economy is much weaker than people think.
Any predictions on gold prices?
Well, i always buy gold and i own gold.
I don't even value it.
I regarded as an insurance policy -- i regard it as an insurance policy.
I think responsible citizens should own gold, period.
We are going to leave it there.
Thank you so much, marc faber.
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