Central bankers are nothing more than “counterfeit money printers,” says perma-bear Marc Faber,...


Central bankers are nothing more than “counterfeit money printers,” says perma-bear Marc Faber, and Ben Bernanke should resign for messing up the U.S. economy so badly. He's been one of the chief proponents of an ultra-expansionist economic monetary policy, Faber says, which was to blame for the financial crisis in the first place. The Fed has no mandate to boost asset prices and create wealth, it doesn’t work that way. It just winds up being a temporary boost - always followed by a crash.

Comments (28)
  • James Sands
    , contributor
    Comments (2637) | Send Message
     
    What's he complaining about, he'll make a killing during the next crash....
    14 Sep 2012, 07:23 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
     
    Faber is correct of course. Ben the Inflation pumper is just another elitist working to transfer wealth to the most connected and wealthiest segments at the expense of the vast majority of the population.
    14 Sep 2012, 07:37 PM Reply Like
  • James Sands
    , contributor
    Comments (2637) | Send Message
     
    Are you kidding, my portfolio is kicking butt and last time I checked I'm as average as it gets. Luckily I manage it and don't have to watch it move.
    14 Sep 2012, 10:00 PM Reply Like
  • frosty
    , contributor
    Comments (720) | Send Message
     
    inflation is 2%
    15 Sep 2012, 08:47 AM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (528) | Send Message
     
    Yes, but it was Charles Schumer ( D-NY) the prophet of the middle class, that said, "Get to work, Mr. Chairman"
    15 Sep 2012, 09:10 AM Reply Like
  • Metals are Precious
    , contributor
    Comments (707) | Send Message
     
    Just continue to buy your physical metals and maybe become a prepper?

     

    map
    14 Sep 2012, 07:42 PM Reply Like
  • The_Hammer
    , contributor
    Comments (5049) | Send Message
     
    Bernank pumping his PRO-poverty policies. He wants to put millions more into poverty.
    14 Sep 2012, 08:11 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    What Bernanke should be criticized for is his refusal to openly criticize/shame our Congress for their fiscal disasters.

     

    He should openly and clearly explain why the deficits are a disaster. He should openly and clearly explain why housing policies were a disaster. He should openly and clearly explain how over-regulation holds back job creation.

     

    Thats what he should be under fire for. Constantly sitting in front of our idiot Congress and not telling them in nice terms that they are idiots.
    14 Sep 2012, 08:25 PM Reply Like
  • Hoopono
    , contributor
    Comments (381) | Send Message
     
    David, I mostly agree with your points of view. What you seem to be critical about here is that Ben is unwilling to commit suicide. You are correct in your belief that Ben, and you, and I, and all of us should demand more intelligent and courageous representation.

     

    The truth of the matter is that intelligence and speaking the truth are severely punished in our society today. We just don't seem to be able to handle truth.

     

    The incentives have been placed on deception in order to remain viable. Ben should not be blamed for our societies shortcomings.
    14 Sep 2012, 08:38 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    He wouldn't be committing suicide. He serves a term and then is either reappointed or not. His is a position of "service". He cannot be removed in the middle of his term and quite frankly being the steward of the monetary policy of the USA is the only thing that he should be thinking about.

     

    Being reappointed is not an accomplishment. I doubt anyone knows or remembers how many terms Paul Volker served..... they just know he did the difficult things required to rein in runaway inflation.

     

    His reward? He's a giant and will go down in history as one of the greatest financially important people in our history.

     

    I would think aspiring to that would be enough of an incentive to do what's right and needed.
    14 Sep 2012, 11:14 PM Reply Like
  • Fr33f0rm
    , contributor
    Comments (300) | Send Message
     
    People from the Austrian school still hold that Hoover's approach to the Great Depression was needed and beneficial to the long-term economic viability of the United States but he is still regarded as one of the worst presidents in history by the history books.

     

    I'm not saying that closing our borders and forcing out international competition was the right thing to do, but we are judged by what happens during our watch, not the actual results of our actions.

     

    (For proof, just see the GOP mockery of Dems assigning blame to Bush)
    16 Sep 2012, 01:13 PM Reply Like
  • benfromchicago2689
    , contributor
    Comments (85) | Send Message
     
    Let's assume Bernanke did not do anything from 2008 (or even 2007) till now. We would have been in Great Depression 2( and likely still in it). All the banks would fail. All your money would be gone (except for the ones guaranteed by FDIC). People would be lining up in soup kitchen just like 1933. There would have been a massive wealth destruction. The human suffering would be immensely worse.

     

    If Bernanke did nothing (no QE at all or even lower the interest rate), he would have been doing exactly the same thing the Fed did in 1933. Now if everyone ponder the choice carefully, you would see Bernanke did the right thing.

     

    I personally would be doing okay had Bernanke did nothing from 2008 onward. But I would hate the see the massive damage done to the society if Great Depression 2 happens.
    14 Sep 2012, 09:59 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    I don't think anyone thinks Bernanke should have done "nothing".

     

    But many like myself think that beyond ensuring the integrity of the financial system that a few bank failures would not have been the end of the world.

     

    Think about the world we might be living in had both shareholders and bondholders been forced to lose their investments instead of taxpayers picking up the tab? Think we might have had a large reform of corporate governance? Think many of these banksters might be sitting in prison where they belong? Think many folks wouldn't be so willing to lend to irresponsible states and cities - thus forcing them to drastically reform their public sector?

     

    We have to think beyond the institutions saved and look at the resulting actions - I'm not at all convinced they are positive.

     

    Our country has a huge fiscal deficit that is far worse than in 2008. We have a terrible housing situation that would have been far better IMO if we simply let it crater and find its natural bottom and move forward from there. We have 2000 pages of financial regulations that don't fix the problem. The list goes on and on.

     

    Sometimes you have to take your medicine no matter how bad it tastes going down in order to get better. We smelled it and said - oh we can't have that - and we are still sick!
    14 Sep 2012, 11:22 PM Reply Like
  • 1980XLS-2.0
    , contributor
    Comments (528) | Send Message
     
    I hope Marc rings the bell, just before the crash. Because I certainly want to participate.
    15 Sep 2012, 09:10 AM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    What ? Guys like him have seen this before. I surly have a few times and it anit pretty. And,when the Reserve is involved the whole world suffers... If you had his smarts you'd understand what he does. The Fed has flooded the entire world with close to 10 trillion dollars and when ( not if ) the Reserve goes there will be many countries in serious trouble ! Sadly,history repeats itself too often. Faber has said,along with a few others who know,War !

     

    What would happen in the US? You would be Greece on steroids. Even this market rally might be worse than the much touted Fiscal Cliff ! If the ECB and EU can really get there acts together than billions of the so called safe dollars will rage into PIIG sovereign bonds for the mega yields and protection of the ECB backing.Trillions will flee the US bonds paying nothing. Thus becoming the much feared vigilante effect. The US 10 year bond almost hit 4% in month 4 of QE2.If not for the fear of the Arab spring and monster violence QE would have been the desaster it may be soon under QE3. The Fed is holding trillions in longer termed bonds from all there buying & twisting out on the curve. A rapid move can easily escalate and viola. Fed collapses even if they can print.

     

    All OMB calculations are out the window and Krugman will seek Rushdi's advise on how to hide......

     

    Faber has earned his right to complain and he is 100% correct about King Ben. Make room Bernie ! You've got company ! DL
    15 Sep 2012, 09:10 AM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    Can Marc point to the crash from QE1 & 2 ?
    15 Sep 2012, 09:58 AM Reply Like
  • jstratt
    , contributor
    Comments (3934) | Send Message
     
    I will take the opportunity to explain why Bernanke has done an outstanding job. I do so because believing people like Faber is a threat to our economic future.

     

    First we are in a depression and the fact that people question that is primarily because of Bernanke's actions. Bernanke did not leverage the US up to 380% of GDP but he is helping us recover from it.

     

    What Bernanke has been doing is simply whatever it takes to keep the GDP growth rate above the nominal interest rate. By doing so we have delevered by about 20 points and are growing out of our debt level. We still have a long way to go.

     

    The alternative would be to not take action and one would expect 20%+ unemployment and a stock market that in the great depression lost 89% of its value and did not reach its prior highs again until 25 years after the crash in 1954. By the way we are much more heavily indebted today than in the great depression.

     

    Like many others I dont like the way we bailed out the banks and especially how we are giving a free pass to fraudsters. However I do hope we can continue to deleverage with a minimum amount of additional damage.

     

    With further pain likely for many years before we exit this chapter I do feel it important to refute those like Faber who capitalize on the pain by advocating a Great Depression strategy. Hopefully few people will genuinely think letting entire industries fail is a rational strategy.

     

    A Faber type approach causes the money supply to shrink and the Great Depression ended its deflationary spiral when those ideas were discarded.
    15 Sep 2012, 05:23 PM Reply Like
  • YellowLab1
    , contributor
    Comments (136) | Send Message
     
    Jstratt

     

    Interesting you say we're in a "depression" yet your President says we're in an "economic recovery." Those or very different. Either you or your President is wrong.
    Interesting you hope we can continue to DE LEVERAGE with a minimum amount of additional damage."
    Yet you support the solution the Fed provides of LEVERAGING in ways never before tested..... and to the max.
    Whose regulating the regulators as they LEVERAGE the US Treasury to catastrophic levels ?
    16 Sep 2012, 11:31 AM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    I don't buy into all this "Great Depression" talk. Bernanke is causing huge issues down the road for whole sectors of the population that are going to watch as the value of their dollars shrinks.

     

    But I see what Bernanke is doing basically what has to done.... which is try to inflate our way out of recession, because the fiscal policies of the government are screwed up.
    16 Sep 2012, 01:46 PM Reply Like
  • Fr33f0rm
    , contributor
    Comments (300) | Send Message
     
    Yes, inflation is a huge risk, but the inflation activities undertaken by the Fed over the last 4 years managed to stay pretty well controlled because it served to balance out the deflation risk that happened when the mania-fueled price of homes dropped. I agree that the Fed should start backing off from pumping the system full of dollars but, based on results, I cannot fault his actions to date.
    16 Sep 2012, 02:08 PM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    Your assessment of the deflation risk because of housing doesn't make sense to me. I understand the deflation in housing but not the other markets, like energy or food...

     

    The conventional wisdom around a depression seems to resonate but I don't see any real historical evidence, beyond the market that was over inflated.

     

    So, my judgement is Bernanke is trying to compensate for poor or counter productive liberal fiscal policy and regulation.
    16 Sep 2012, 04:00 PM Reply Like
  • Fr33f0rm
    , contributor
    Comments (300) | Send Message
     
    Simply, the market was over inflated but to allow deflation would force the banks that were already falling apart to implode.

     

    It's like dealing with an arrow through your stomach...It shouldn't have been there in the first place but keeping it in place may keep you alive longer than pulling it out.

     

    And as far as compensating for "counter-productive liberal fiscal policy and regulation" that statement is a bit confusing.

     

    We had a credit and bank expansion from 2000 to 2008 when a self-professed conservative was in office. In many ways, I would consider the liberal fiscal policies of Greenspan during the end of his tenure to be largely to blame for the mess. If you've ever heard of the "Greenspan put" it was a term for, whenever the market would have an issue of any kind, he would lower the Fed funds rate and give the market a jolt. Greenspan created a lot of unnecessary credit in the system and encouraged advanced financial products like "credit default swaps" and "adjustable-rate mortgages". If those terms make your hair stand on end, they should...Bernake is doing a lot to try to clean up after Greenspan...

     

    I agree with your statement unless it is targeted at the current administration, then I would call you an idiot.
    16 Sep 2012, 07:31 PM Reply Like
  • Fr33f0rm
    , contributor
    Comments (300) | Send Message
     
    Policy is not binary. You can't simply deleverage everything and expect that it will come out alright. Cleaning up the system without excessive fallout requires measured reduction in leverage.

     

    And btw, what regulators are you talking about that are increasing leverage?
    16 Sep 2012, 07:54 PM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    You make statements like you are reporting facts but you are simply resonating again.... "Simply, the market was over inflated but to allow deflation would force the banks that were already falling apart to implode. " Please provide some proven economic data because you continue to say the same thing over and over. Granted alot of banks would of, and did implode - interesting story on which were allow to implode vs saved.

     

    And to perceive that I'm idiot for observing first hand the heavy burden and cost of regulations placed on businesses, that cause economic stagnation, by this administration proves that you aren't sincere about the discussion but just another partisan blogger. What a shame. (EPA standards are very daunting for large companies - the last project I worked required a 1 million dollar oxidizer that was never required previously.)

     

    And of course policy is not binary - nothing ever is. I'm sure you can name the regs that stale economic activity as well as I can.... but you probably don't want to..... you're still blaming Bush.
    16 Sep 2012, 10:51 PM Reply Like
  • Fr33f0rm
    , contributor
    Comments (300) | Send Message
     
    Point 1) It's a math issue, if you have large outstanding loans (which all banks do) and the collateral that you are using to backstop those loans plummet in value, you are screwed.

     

    2) you called me partisan and accused me of blaming Bush when I was saying that Greenspan screwed up.

     

    I will take this moment to be partisan...I have listened to Hannity, I have listened to Limbaugh, and I have observed them both doing the same thing...when a point is brought across that contradicts their talking points, they accuse the other side of being partisan. That is bullshit.

     

    EPA standards can be daunting but, I'm pretty sure that you have no chemistry in your background or you would realize that, if your process produces poisonous byproducts, they don't disappear if you put them in your backyard. We're always learning more about what is and is not harmful. If you do not believe in the EPA, then please repaint your house with lead paint, start smoking indoors around your children, and store your gasoline cans inside your house so you can enjoy the future that you want for our children.
    18 Sep 2012, 01:05 AM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    As and engineer I would expect better... come on. Your points again make an assumption that everything is an absolute - that ALL banks would fail but you know that isn't case. Some (alot) of banks did fail, and where screwed, so making a statement that all banks would of failed if the Fed didn't act is crap.

     

    I was being sarcastic in the Bush comment because you are simply resonating no unique thoughts - so I was waiting that shoe to drop.

     

    And again if you are an active engineer you know that the new EPA standards are not regulating "poisonous" gases - laws from 2000-2008 govern our air and water and do not place undo burden during challenging economic times - which is why, I believe one of the reasons, the Kyoto treaty never ratified in the US. Current administration polices should support economic growth and not inhibit it in all cases when times are tough.... and yes risks / rewards all always considered - including the risk of "global warming".

     

    And yes we are always learning what is "hazardous" but remember there is a balance - and we may never all the key elements for living forever. I'm not sure why you want me to use lead paint or smoke by my kids.... but I'll ignore it.

     

    Try to argue reasonably if you are going to do it..... and understand that we are talking gradients - you said policies are not binary - nothing ever is - conservative policies typically work best in hard times and progressive policies work better when the economic outlook is better - but everything is going to move back and forth.
    18 Sep 2012, 09:40 AM Reply Like
  • Fr33f0rm
    , contributor
    Comments (300) | Send Message
     
    There are a lot of different kinds of engineers and, to be honest, I am not involved with environmental regulations. I have just heard too many people proposing abolishing the EPA and the very thought of that sends chills down my spine. Here is one fact I believe: Unless legally mandated, few companies would spend money on proper chemical disposal or wastewater management.

     

    I was being loose in my language when I used the word "screwed". I didn't imply that all banks would fail but I did mean that all banks would have faced challenging times. It's scary that, if you believe the reports from that time, all of the big banks brought their soup bowls to the discount window. From what we've seen through the robo-signing scandal, if one of the big banks failed, there would be scrambling to figure out who actually owned the mortgages on what properties.

     

    Balance is always the key when you're talking about industry and the environment. I am an industrialist environmentalist (new term, I'm trying it out). The mantra we need to live by is "sustainability". If some want to regulate industrial waste less than the Chinese, I will fight that tooth and nail. But, I support smarter rule making. I think tightening CAFE standards is a good thing because, if people can stomach less powerful cars, they will end up saving money on gas and reducing our trade deficit.

     

    I agree that EPA rules should have to pass the reasonability test but, I have no idea who I would trust to make that judgement. I'm sure you'd say congress but, last I saw, hippies and environmentalists are light on lobbying dollars.

     

    I think we're a bit stuck on this one.
    24 Sep 2012, 12:46 AM Reply Like
  • mike8599
    , contributor
    Comments (588) | Send Message
     
    That's better.... good luck with the industrial environmentalist thing - sounds like it should fit nicely into that whole LEEDs certification.

     

    Per your concern around the EPA - I do agree to a point. My experience is that some EPA regulations are made without regard to their consequence or cost, in other words tightening up air standards on non toxic particulates that are so tiny they don't pose a serious known hazard is ridiculous based on the what we know today.

     

    Cafe standards bother me alittle as well because I really don't want the government telling me what kind of car to drive.... and people make engine performance decisions based on varying criteria.

     

    I do believe the government's investments via the NSF should be ramped up, and that is method in which they could push environmental breakthroughs. There are costs benefits in using environmentally friendly solutions - we just have to find them - forcing people just leads to cheating.
    24 Sep 2012, 09:05 AM Reply Like
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