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Will Capitalism Fail?

Marc Faber, recently said on CNBC that "the way communism collapsed, capitalism will collapse," and "The US government for sure will go bust. That I guarantee you. Not tomorrow, but it will go bust,"  We highly disagree. Here is why:

  • If there is no capitalism, there is no innovation and vice versa and the world will be a much worse place to live. Hence, human beings naturally will want to save and reform capitalism from total collapse. Communism also is not totally a failure. The biggest communist country, P.R. China has successfully&... itself to be more capitalistic. Clearly communism has evolved to adopt many positive features of capitalism. Simil... capitalism is now adapting to new reality and will evolve too.
  • US still posses unbeatable innovativeness and entrepreneurial drives (e.g: internet, e-commerce, and social networking technologies all are created in the US;). Almost all great innovation in technologies, supply chain, engineering processes, media & entertainment (e.g.: who else can do movies better and more advanced than Hollywood studios?) in the past 10 years came from US --- the trend is very strong and likely to continue in the long-term. US also has strong and stable political system (where else you can have someone unknown like Barrack Obama elected to become president democratically and peacefully), global leadership (although it is in declining mode, it is still a strong one), and still vibrant economic infrastructure (except its highly leveraged financial sector -- but this area too is being deleveraged and will be fixed eventually slowly), is likely to have room to recover and grow again in the long-term (however, the GDP growth rate will likely to be slow -- not as fast as it did in the past due to de-leveraging and de-risking trends that will take at least a decade). We are cautiously more optimistic on US future despite all the enormous challenges that the country is facing now. Hence, we believe both US and capitalism will not fail nor end, both will adapt and morph to a better country and modified form of capitalism.