Marc Faber: The Stock Market Bubble Is Out of Control

Stock_Market_BubbleInflation is Rampant, Says Marc Faber

Not only did inflation create a massive stock market bubble, but the coming hyperinflation will decimate the purchasing power of ordinary Americans. Paper money is bleeding value and investors will soon be clamouring for the safety of gold and silver.

At least, that’s according to well-known financial commentator Marc Faber.

During his latest performance, Faber expanded on his theory of asset inflation. Much of his argument focuses on the inherent lack of value in paper money. He suggests that hard assets like gold and silver are better stores of capital than any fiat currency. (Source: Marc Faber: We Have Colossal Asset Inflation, Bloomberg, October 5, 2015.)

In fact, Faber defines inflation as increases in the money supply. Although most economists would find that definition absurd, he argues that all other factors are simply a manifestation of that original sin.

“First of all, we have to define inflation correctly,” says Faber. “Inflation is basically an increase of the quantity of money, and of credit, and everything else are symptoms of inflation.”

In other words, rising prices are just symbolic extensions of printing more money.

Marc Faber Warns of Hyperinflation

Most analysts assume inflation is low because they watch government statistics that track prices across the economy. But Marc Faber is no ordinary analyst.

Over the last several years, he vehemently opposed quantitative easing programs from the Federal Reserve which Wall Street officials welcomed with open arms.

The Fed’s easy money policies were reactions to the stock market crash, a crisis management technique to stop asset prices from collapsing. Low interest rates were a central feature of the plan.

Making it easier to borrow money was supposed to boost spending, but Faber argues it caused near-irreparable damage. He was typically contrarian when asked whether the Fed missed its chance to raise interest rates.

“They should have raised the rates, in my view, in 2011 already, or never lowered them to such a low level,” said Faber. “Now the problem is the global economy is slowing down […] it would be very difficult to raise interest rates at the present time.”

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