Tom Keene's EconoChat

March 10, 2011 at 9:00 PM UTC

This article is for subscribers only.

BusinessWeek Cover Image (11_12, portrait)

This article is part of the March 14, 2011 issue of businessweek.

Marc Faber, can we have a commodity boom and general prosperity as well? Or does a surge in commodity prices lead to a negative outcome?
The problem is this: Mr. Bernanke decided to print money, and the Federal Reserve has done that for the last 30 years. When you print money, what the central banks can't decide is where the money will flow to. So it flows into Nasdaq from 1997 to 2000. Then it flows into real estate—until the collapse. In 2008 it flows into commodities. And now again it flows into oil and food. As these prices go up, it hurts the majority of the population.

Not all the population?
For the well-to-do, your Goldman Sachs (GS) or Citigroup (C) bankers, the percentage that you spend on energy and food is very low, so you don't care.