In a recent interview published at the Daily Bell, Anthony Wile engaged in a wide-ranging discussion with economist and investment expert Marc Faber.
Wile and Faber hit on a wide range of subjects from oil markets, to agricultural lands, to the future price of gold.
Faber said we shouldn’t follow the media lead and blame China for all of the current problems, echoing what Peter Schiff has said. Ultimately it all comes down to central bank and government actions – policies Faber views as unsustainable.
But what exactly does the future hold? Faber said there is no way to precisely tell, but it isn’t good:
It’s difficult to make predictions but it’s impossible to make any accurate prediction when you have interventions. We have a lot of interventions, and in the whole history of mankind, which is documented say starting 5,000 years ago up to today, interest rates have never, ever been this low. Never. And this is an experiment the professors and academics who never worked a day in their lives in a real job have undertaken. Nobody knows the precise outcome. I can only say the outcome will be negative.”
On Wednesday, the founder of the world’s largest hedge fund appeared on CNBC and made exactly the same prediction Peter Schiff has been making for months – the Federal Reserve’s next moves will be taking rates back to zero and launching another round of quantitative easing.
It’s important to remember that Ray Dalio doesn’t share Peter’s economic point of view. He is a classic Keynesian who believes the Fed has done an excellent job. He even claimed that “QE saved the economy.” He and Peter probably agree on very little. But Dalio’s remarks bear consideration because he represents the conventional wisdom of today. He believes in central bank intervention and he recognizes that the current state of the US economy demands more of it. To use Peter’s analogy, Dalio wants the drug addict to get more of his favorite drug, and he believes the Fed will deliver.
In his most recent Liberty Report, Ron Paul declared that the economic calamity anticipated by many free market advocates is now at hand.
Paul focused in on the obsession people like Paul Krugman have with deflation, pointing out that it isn’t the problem; it is merely the symptom of an economy trying to correct itself. Unfortunately, the Federal Reserve and government central planners seem intent on continuing the very policies that created the underlying problems in the first place:
Concentrating only on deflation and ignoring the unlawful, dangerous powers of the Fed to inflate and regulate will always result in a steady weakening of the economy – the economy which today is facing total collapse. Deflationary pressures do exist. Some debt and malinvestements are being liquidated. But the correction is constantly impeded by the Federal Reserve’s monetary policy and congressional spending.”
Jim Grant agrees with Peter Schiff that the Federal Reserve cannot continue to raise interest rates in 2016. On CNBC today, Grant explained his reasoning for why the Fed will regret raising rates in December and reverse its course of action:
It seems to me that the Fed is more likely to go to zero than to go to one-half of one percent from here. [I think that as the Fed] read the data, it felt it had to move. It had been saying for so long it would, [therefore] it had to, [and] it did. That doesn’t mean it was right to do so in the Fed’s own scheme of things. I think the Fed will regret the move it did in December. I think it will backtrack.”
Hindsight is supposed to be 20-20, but for some people it seems like it’s blind.
We’re approaching a decade since the housing bubble burst, plunging the US economy into the worst crisis since the great depression. Still, defenders of big government and central planning continue efforts to sell the myth that the meltdown was caused by “deregulation” and insufficient government oversight of greedy Wall Street types. This includes a lot of people who should know better, including New York Times columnist Paul Krugman.
In a recent column, Krugman once again dragged out the deregulation myth, claiming “the bubble whose existence they denied really was inflated largely via opaque financial schemes that in many cases amounted to outright fraud — and it is an outrage that basically nobody ended up being punished for those sins aside from innocent bystanders, namely the millions of workers who lost their jobs and the millions of families that lost their homes.”
This article was written by Stefan Gleason and originally published at the Tenth Amendment Center. Find it here.
Is America on the cusp of a revolution that will usher in a new monetary order? The lessons of history tell us that no fiat currency retains its value for long or lasts forever. And as Shakespeare noted, “what’s past is prologue.”
Major episodes in monetary history often stem from political revolutions. Just as there are boom-bust economic cycles, there are cycles of optimism pessimism that drive cultural, geopolitical, and war cycles. American history reflects the ebbs and flows in social sentiment.
The Founders wrote gold and silver into the Constitution as legal tender. They did so not because the American Revolution was financed with sound money – quite the opposite. The Founders were keenly aware of the dangers of unbacked paper money because the Continental Congress printed huge volumes of it to pay for the Revolutionary war.
Dr. Ron Paul interviewed Chris Rossini, regular contributor to LewRockwell.com and author of Set Money Free: What Every American Needs To Know About The Federal Reserve. Together, they debunked some common American myths, including the real source of inflation, US foreign policy against radical Islam, and the importance of real savings and capital in an economic system.
Going back and forth with Paul Krugman, I argue the case that his definition of inflation is different than mine. He says inflation is when the CPI goes up, which is a government statistic which they can alter at will… Austrian economics teaches that inflation really is the increase in the supply of money and credit, especially when it is artificial and comes from the Federal Reserve.”
Rob McEwen provided Kitco with an insider’s view on the mining industry and physical gold investment. McEwen was the founder and former CEO of Goldcorp, the world’s fourth largest mining company, so his insights into precious metals should not be taken lightly.
McEwen had 3 very important observations for investors:
1. If prices remain this low, there’s a possibility of gold and silver supply shortages as miners produce less.
In a new podcast, Tom Woods tears apart an article from the liberal website Think Progress in which an amateur economist attacks the gold standard. Joseph Salerno (Academic Vice President of the Mises Institute) and Jeffrey Herbener (Associate Editor of the Quarterly Journal of Austrian Economics) joined Woods to counter the mainstream misconceptions of the gold standard.
Think Progress went so far as to claim that the gold standard is responsible for increased consumer price volatility. This is clearly wrong, which Woods proves with a single chart. Notice when consumer prices really start to skyrocket – right around 1971 when Nixon closed the “gold window.”
The CEO of Degussa Golchandel, the largest precious metals bullion dealer in Europe, explained why he disagrees with the mainstream market sentiment concerning the price of gold. Rather than dropping to $1,000 an ounce, Wolfgang Wrzesniok-Rossbach expects a $1,500 price point in the near future. He has three core reasons for this analysis: speculative investors have largely stopped selling paper gold, physical demand for both jewelry and bullion is rising, and mine production and supply is not increasing.
He also explained why Degussa has just opened its first Asian retail bullion store in Singapore, which is the latest evidence of the trend of physical gold moving from West to East:
when a market has a certain size we are perfectly fine with it, and Singapore has that size with 5.5 million people, 50 million tourists a year. [It has] a very stable environment, actually, politically as well as economically… Plus, there’s a lot of support from the government to create a vibrant gold market in Singapore…”