L.S.: What could be done to solve a systemic crisis?
Marc Faber : Recently, there was a professor in
Germany who argued that the problem are the well-to-do people and that
they should be taxed, very heavily penalized and that part of their
assets should be taken away. I don’t think that the well-to-do people
per se are the problem. I think the money trading by central banks is
the problem and the expected debt growth, credit growth by governments
and also on the household sector level and the unfunded liability. So,
essentially, one of the solutions to the problem – and there is not
going to be a solution that is not very painful – there will be pain and
people will have to cut back on their consumption and also review their
future benefits from pension funds and from social security, health
care and so forth and so on.
We’ve lived beyond our means in most
countries and to solve that problem is not going to be without
significant pain. But effecting the right direction would be to take the
depression away from central bankers to increase and cut the money
supply and to intervene into the free market essentially with monetary
measures. I think that would be the first step in the right direction
because if you look at what has happened in the economy, one of the
safest goals of central banks is price stability. Well where has there
been price stability over the last 15 years? We had a colossal NASDAQ
problem and then a collapse and then a colossal credit bubble and
housing bubble and then a collapse and then we had a colossal bubble in
commodities in 2008 when the oil price went to 147 Dollars, and so if
the goal is price stability, basically the fiscal and in particular the
monetary interventions have actually led to more instability rather than
stability.
- in an interview with By Lars Schall of the online platform " Gold Switzerland 1st September, 2013 Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.
