David McAlvany: With over 40 central banks setting rates at or near
zero percent, there is the potential for problems to arise in almost
every part of the globe, and perhaps this fits the earlier question:
Where would you see opportunities, where would you see risks, and should
we have any concerns lingering in terms of the old inflation versus
deflation debate?
Marc Faber : It all depends how you define inflation. Normally, some
people think, like the Fed Chairman, that if consumer prices go up, that
is inflation. He doesn’t look at rising stock prices, rising art
prices, rising real estate prices, rising collectables pricing, or
rising commodity prices, as a symptom of inflation. But these are
symptoms of inflation. They arise usually because of too much money
printing.
I look at it this way. Every inflation eventually comes to an end,
and is followed by deflation. I just don’t know when the deflation in
stock prices will happen. To some extent, it already happened in the
gold market. To some extent it already happened in the real estate
market. It hasn’t happened yet in stock prices, but that is likely to
happen as well sometime in the future. And when it happens, I think the
consequences for the real economy will be negative.
- in a recent interview with McAlvany
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