Friday, February 4, 2011

[Video] Marc Faber to Ben Bernanke - You Lie!

It is doubtful there is a better combination of colorful commentator + astute investor in the world, than Marc Faber.  I have not posted a video of his in a long while but earlier this week he was on CNBC Europe saying U.S. inflation data is essentially a big fib.  Among other things.  Granted Bill Gross and quite a few others have now come around to this viewpoint, but it is one thing to say it and quite another to say it with Faber's flair.  Enjoy

Email readers will need to come to site to view - 5 minutes

Global inflation is far higher than official statistics reveal, Marc Faber, editor and publisher of the “Gloom, Boom and Doom” report told CNBC on Wednesday, with increases in the cost of living amounting to between five and eight percent in the United States and just below that in Europe.

“I guarantee you … the annual cost of living increases are more than 5 percent, and the Bureau of Labor Statistics is lying,” Faber told CNBC at the Russia Forum in Moscow.

“Mr Bernanke is a liar; inflation is much higher than what they publish. I would imagine for most households it’s between five and eight percent per annum in the United States and in Western European countries maybe a little bit lower but also around four and five percent per annum,” he said.

In addition, Faber said high food prices, which have sparked political unrest in Egypt, would next cause turmoil in Pakistan.

“You may not have the problem in Saudi Arabia and the Emirates because there the governments can heavily subsidize food if they want to, but I’m particularly worried that what has happened in Egypt will happen in Pakistan,” he said.

Asked whether Pakistan would indeed see an Egypt-style uprising, he said: “I think that will be the case.”
“I think Egypt is a reminder to people that politics and social events and geopolitics have a meaningful impact on asset markets,” Faber said, adding that what the world was currently witnessing was “a wake up call where the US outperforms emerging markets for a while.”

“That doesn’t mean that the US goes up. It just may go down less than the others,” he said.

Turning to the global economic recovery, Faber said the West was bottoming out and recovering, which meant the global economy looked “OK” for the next six months.

But “we’re all doomed in the long run,” he said.

“We have to realize it’s an artificial recovery driven by ultra-expansionary, monetary policies and also ultra-expansionary fiscal policies. In other words, the deficits of governments are huge and that will lead down the road to renewed problems,” he said.

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