There Is Inflation In The System But It’s Not Obvious

Some economists say that there is little consumer price inflation. But there is, because the money-printing has lifted asset prices like those for luxury property, art, equities or bonds. There is inflation in the system but it’s not obvious. - in Emerging Markets



Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Asset Inflation can flow into Consumer Inflation

"Why are so many product prices in Singapore and Hong Kong more expensive than in the U.S.? It's because when you have asset inflation and high property prices, shops have to pay higher rents, so they charge more for their products. So asset inflation can flow into consumer inflation,"

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Marc Faber

All Governments around the world lie about Inflation

"In terms of investment, there is nothing safe any more. The US money-printing has distorted all asset prices while cash in the bank has not given you any return when inflation is adjusted. Inflation in Thailand is running at 10 per cent per annum. I don't look at the government's statistics. All governments around the world lie" about inflation.

"My investment strategy during this time is that you have to diversify and minimise your risks from economic, political, geopolitical and other factors. Your portfolio should include properties, stocks and equities, corporate bonds, gold and silver, plus cash. It should be 25 per cent of each, or 125 per cent - just to mimic the US accounting standard where things now do not add up. - in nationmultimedia


Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Marc Faber : Every Inflation leads to Delfation

At some stage, every inflation leads to deflation in that particular sector, whether it’s housing, the NASDAQ, the NIKKEI, or whatever it is. I believe one day, paper money and financial assets will be destroyed, but I’m not saying tomorrow. Maybe it happens from a market capitalization that is much higher.

Someone said to me, “The DOW Jones will go to 100,000.” Yeah, it’s possible. If you print money, everything is possible.

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Marc Faber : Investors have a misconception about what Inflation is

Marc Faber : "Well, I think investors have a misconception about what inflation is because it is essentially an increase in the quantity of money and credit. We have wage deflation in the world in real terms, for sure. In other words, real wages are going down and the cost of living everywhere are going up. That is why you have social unrest in North Africa, in the Middle East, in Turkey, in Brazil, and it will spread because the average person on the street hasn't participated in the huge asset inflation that has been going on in high-end properties, Mayfair properties, Fifth Avenue, Madison Avenue, the Hamptons and in equities and until recently in bonds and commodities." - in Business Insider

Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

MARC FABER : Investors have a misconception about what Inflation is

MARC FABER :  "Well, I think investors have a misconception about what inflation is because it is essentially an increase in the quantity of money and credit. We have wage deflation in the world in real terms, for sure. In other words, real wages are going down and the cost of living everywhere are going up. That is why you have social unrest in North Africa, in the Middle East, in Turkey, in Brazil, and it will spread because the average person on the street hasn't participated in the huge asset inflation that has been going on in high-end properties, Mayfair properties, Fifth Avenue, Madison Avenue, the Hamptons and in equities and until recently in bonds and commodities."
 



Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Marc Faber : The average person on the street hasn't participated in the huge asset inflation that has been going

Marc Faber On whether he's investing with a backdrop of no inflation:

"Well, I think investors have a misconception about what inflation is because it is essentially an increase in the quantity of money and credit. We have wage deflation in the world in real terms, for sure. In other words, real wages are going down and the cost of living everywhere are going up. That is why you have social unrest in North Africa, in the Middle East, in Turkey, in Brazil, and it will spread because the average person on the street hasn't participated in the huge asset inflation that has been going on in high-end properties, Mayfair properties, Fifth Avenue, Madison Avenue, the Hamptons and in equities and until recently in bonds and commodities."

- in Bloomberg : Click Here to watch The Full Interview >>>>>>

Marc Faber : The Art Market is a good Indicator of The Real Inflation

But still there is no inflation. And so you have gold only an investment that does not generate any interest. And only hope for increasing the value appears but plenty of speculation.

Marc Faber : But if you, for example, hold cash, but also you speculate. Then you speculate on the value of receiving the money. Here you will get virtually no interest, too. Whether inflation is actually so low as to publish the central bank, but it is very questionable. Energy costs have risen sharply, and the costs in the health sector, for example. Also the real estate prices rise significantly. A good indicator is the art market. The prices for images attract strong. So there are already signs of inflation. The tragic is that real wages fall and rising cost of living. This is particularly the middle class.

Summarily translated from :  

www.deraktionaer.de/aktien-deutschland/marc-faber--ein-deflationaerer-schock-ist-moeglich-19708799.htm


Original Text in German :


Aber nach wie vor gibt es keine Inflation. Und damit hat man mit Gold nur ein Investment, das keine Zinsen abwirft. Und nur auf die Wertsteigerung zu hoffen, erscheint doch reichlich spekulativ.
Aber wenn Sie beispielsweise Bargeld halten, spekulieren Sie doch auch. Dann spekulieren Sie auf den Werterhalt des Geldes. Hier bekommen Sie praktisch auch keine Zinsen. Ob die Inflation tatsächlich so tief liegt, wie es die Zentralbanken publizieren, ist doch sehr fraglich. Die Energiekosten sind stark gestiegen und auch die Kosten im Gesundheitsbereich zum Beispiel. Dazu steigen auch die Immobilienpreise deutlich. Ein guter Indikator ist auch der Kunstmarkt. Die Preise für Bilder ziehen stark an. Also gibt es schon Anzeichen von Inflation. Das tragische ist, dass die Reallöhne fallen und die Lebenshaltungskosten steigen. Das trifft vor allem den Mittelstand.

The Federal Reserve targets core inflation

Dr. Marc Faber : "...Yeah, but do you understand its very difficult to define inflation. The Federal Reserve essentially targets core inflation. Core inflation has nothing to do with your cost of living increases. And as you know the basket of goods and services that are used to measure inflation can be weighted in such a way that things that go up a lot like health care costs, insurance premiums, energy, in this regard entirely and other items where prices are deflating like a T-shirt are over-weighted. " in a recent interview with Chris Martenson

Inflation is a very vicious tax on honest people savings

In a recent interview with David McAlavany Dr. Marc Faber answered this question about inflation
David McAlavany: It seems like perhaps one of the best strategies that they have to employ is a manipulation of the CPI numbers so that people assume that real-world inflation is 2 to2½%, while running at a 5% rate, essentially cutting the debts in half over a long enough period of time. If real-world inflation is, as John Williams of Shadow Stats has said,closer to 8%, then we are alleviating a lot of our existing stock of debt, at a rapid rate.
Marc Faber : Correct. But you understand, you are not really helping the economy, you are impoverishing, let’s say, the honest people who are decent, who have deposits, who save money and keep it in the banking system, who simply do not want to speculate. So, it is a tax on people’s savings, and it is a very vicious tax, because it is not so obvious to them,but it will become obvious one day, when with their money they can buy less and less. In other words, the purchasing power of money goes down. That is why I am telling everyone, if you already own cash, consider gold and silver to be a component of your cash portfolio, and own some of it, because the government can appropriate it, but otherwise they cannot fiddle around with it in terms of increasing the supply.

Inflation seriously on the rise , no matter how you slice it

Inflation is seriously on the rise , no matter how you slice it says Kudlow and he explains why with charts and numbers


We are talking about the Bernanke sea of liquidity, gold, silver and oil prices rising today. i submit we have an inflation problem in this country says Kudlow we have more evidence coming out today with the producer price report. " no matter how you slice it, inflation is seriously on the rise. I have looked at this thing left, right and center. first of all, we are going to measure this. ppi went up 0.7% today. on a three-month basis we are holding. this is not good. we are now holding at around 12% to 13% at an annual rate over three-month periods. this is not good. we were down around 0% a year ago. you can see the move. you can see the move. this is the total ppi. next up. you want to look at the core ppi? you want to be dumb enough to take out food and energy prices? fine. check this out. same story. three-month annualized rate. we are running now at about 4.5%. this is excluding food and energy which is a dumb thing to do. business is at wholesale pay food and energy prices for their inputs, whatever it is they are doing. here we are again. the core ppi. now, next up, inside the producer price index, a lot of people missed this. consumer goods. consumer goods component feeds right into the consumer price index on the cpi. and here, too, look at the upward turn. we are now running about 15%, 16.5% for the latest three months including march. today consumer goods are up 0.8%. this goes into the cpi. " says Kudlow

The inflation in the US Is Running Up To 8 per cent

Marc Faber : “The annual cost of living increases are more than 5% today and the Bureau of Labor Statistics is continuously lying about the inflation rate, including Mr. Bernanke. He’s a liar. Inflation is much higher than what they publish.I think that inflation is between 5% and 8% per annum in the US, and in Western Europe, a little bit lower, also 4-5% per annum.”..Marc Faber estimates that inflation in the US was currently Is Running Up To 8 per cent , and between 4 and 5 per cent in Europe. Marc Faber believes that Pakistan may be the next to fall into chaos after Tunisia and Egypt :
"You may not have a problem in Saudi Arabia and in the Emirates, in Kuwait and Qatar, because there the governments can heavily subsidize food if they want to. But I am worried that what has happened in Egypt will happen in Pakistan... I think Egypt is a reminder to people that politics, and social events, and geopolitics have a meaningful effect on asset markets. The developed markets have way outperformed, and now I think that it may be a wake up call that the US outperforms emerging economies for a while."
in CNBC

Marc Faber : I think inflation is around 5%

Marc Faber : "...An investor has the choice to invest in real estate, in equities, in bonds, in commodities, and I separate precious metals from commodities, from industrial and agricultural commodities, because I consider it money. Also we can buy art, and stamps,and other collectibles.I have a large subscriber base for my Gloom, Boom and Doom Report , and I asked each one of them to let me know if they have the impression that the cost of living increases,in other words, the percentage of how much they pay every year, more, for their families,is less than 5%. So far I have not received a single email, so I think inflation is around 5%. The return on deposits is essentially zero. And then people begin to worry, because paper money is no longer a store of value, and at the same time, it is a bad unit of accounts, because it is debased by the central bank.So people buy paintings, they buy real estate, they buy stocks, they buy, to some extent,bonds – last year, we had large inflows into bond funds– and they buy precious metals.The problem with all these easy monetary policies and artificially low interest rates, is that not everything goes up at the same time. In other words, we had a bubble in the NASDAQ in 1997 to March 2000, then the bubble burst. Then we had a real estate bubble 2000-2006. Then in September 2007 and July 2008, oil went from $78 to $147and the CRB went ballistic, so we had a commodities problem. In 2008 everything collapsed. Oil, in an unprecedented move, went, in July 2008, from $147 to a low of $32in December 2008. In other words, in six months, oil fell from $147 to $32 a barrel.These kinds of moves are brought about by the Federal Reserve monetary policies, and for the investor, there is no point to be overly dogmatic. From 1999 to 2007 and 2008,gold outperformed equities by a huge margin. Also, silver outperformed equities by a huge margin. In 2009, equities outperformed gold, and from here onward, it is going to be the same pattern. There will be suddenly other assets that appreciate, and some assets go down.I happen to think that some prices will go down, but they have become oversold on a year-term basis, because over the last three months, the whole world became overly enthusiastic with the inflation phase, so the thinking was, government bonds are bad, and equities are good. That may reverse for a little while, but I think long-term if you look at ten years, one of the worst investments will be long-term U.S. government bonds."

This was an extract of the long interview that Dr. Marc Faber did with McAlvany on 23 February 2011 , below is the full interview :

Inflation Creeping up

Featuring Bloomberg TV's Adam Johnson and Dominic Chu : Bloomberg Television's Under the Radar: Inflation, Trains & Play-Doh

Marc Faber : Bernanke and he Bureau of Labor Statistics is continuously lying about the inflation

U.S. Government Lying About Inflation and Jobs Market
Marc Faber : " I have very large subscription base and I ask my readers whoever thinks that the cost of living is going up by less than 5 percent per anum to please send me an email ...I did not one single email  and I guarantee you also for your family and for every family in the US that The annual cost of living increases are more than 5% today and the Bureau of Labor Statistics is continuously lying about the inflation rate, including Mr. Bernanke. He’s a liar. Inflation is much higher than what they publish.I think that inflation is between 5% and 8% per annum in the US, and in Western Europe, a little bit lower, also 4-5% per annum.”..Marc Faber estimates that inflation in the US was currently Is Running Up To 8 per cent , and between 4 and 5 per cent in Europe.

Bernanke Sees Little Inflation Risk

Federal Reserve Chairman Ben Bernank went before Congress Wednesday to defend the central bank's monetary policies. He told the committee he see's little immediate inflation risk in the U.S. Elsewhere in Washington, another member of Congress announced he would not seek re-election, while overseas, violence flared again on Day 16 of Egypt's anti-government demonstrations.

Inflation Nation?

Feb. 7 2011 | Discussing the risk of inflation worldwide, with Greg Peters, Morgan Stanley Global Head of Fixed Income Research, and Richard Bernstein, CNBC contributor.

Geopolitical Risk of Inflation

Feb. 7 2011 | Assessing the geopolitical risk of inflation, with Keith McCullough, Hedgeye Risk Mgmt, and Richard Bernstein, CNBC contributor.

No Inflation - are you sure? Peter Schiff, Ron Paul, Nassim Taleb, Jim Rogers and Marc Faber

Is there no Inflation? Peter Schiff, Ron Paul, Nassim Taleb, Jim Rogers and Marc Faber

Marc Faber : food and energy inflation is more meaningful in Emerging Markets than in the United States.

Marc Faber : "....It has a lot to do with these issues. I am not saying it is the reason why investors should not be in emerging economies. But, food and energy inflation is more meaningful in an emerging economy than in the United States.
In a mature economy, where the GDP per capita is high, food is not a large percentage in the expenditure of a household whereas, in a country like India, Vietnam or Cambodia, food is a large percentage of expenditure. So, investors maybe concerned about this issue......"
in www.moneycontrol.com