Marc Faber : I own equities, and I should thank Mr. Bernanke. The Fed has been
flooding the system with money. The problem is the money doesn't flow
into the system evenly. It doesn't increase economic activity and asset
prices in concert. Instead, it creates dangerous excesses in countries
and asset classes. Money-printing fueled the colossal stock-market
bubble of 1999-2000, when the Nasdaq more than doubled, becoming
disconnected from economic reality. It fueled the housing bubble, which
burst in 2008, and the commodities bubble. Now money is flowing into the
high-end asset market—things like stocks, bonds, art, wine, jewelry,
and luxury real estate. The art-auction houses are seeing record sales.
Property prices in the Hamptons rose 35% last year. Sandy Weill [the
former head of Citigroup] bought a Manhattan condominium in 2007 for
$43.7 million. He sold it last year for $88 million.
Money-printing boosts the economy of the people closest to the money flow. But it doesn't help the worker in Detroit, or the vast majority of the middle class. It leads to a widening wealth gap. The majority loses, and the minority wins. Although I have been a beneficiary of this policy, I can't approve as an economist and social observer.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.
