Marc Faber: The Perils of Money Printing's Unintended Consequences

1. Federal debt must be paid back by taxpayers. (But, because the federal government has the unlimited power to create the money to pay its bills, there is no need to ask taxpayers to do it.)

2. Federal debt adds to the government’s interest paying burden. (Again, interest is no burden to a entity having the unlimited ability to create money.) 

3. Federal debt uses up lending funds that otherwise would go to private needs. (But, federal spending adds money to the economy, making more, not less, funds available for private lending.)

 4. By increasing the money supply, federal deficits reduce the value of money, thereby causing inflation. Readers of this blog have seen the graph (below) which shows no relationship between federal deficits — even large federal deficits — and inflation. Note how the peaks and valleys of deficit growth do not match the peaks and valleys of inflation growth:

Rodger: I went to your website.  I'd ask my late dog Copper for economic advice before believing any of the above drivel.  You should watch CM's Chapter 16.  CPI, where they back out food and gas from inflation.  You sound as moronic as Ben Bernanke saying "we don't have inflation."

Good luck buddy, you are going to need it.

Oh, and one more thing: Every country that tried this wound up in hyperinfaltion. (Again, interest is no burden to a entity having the unlimited ability to create money.) 

And FTW:  According to the government, who back out oil and food from "inflation" the dollar has lost 82% of its value since Nixon slammed the gold window.

So there you go genius.  They create more money and YOU pay more.  Why?  Because your dollar is worth less than 2 dimes.  And I'm not talking about what you may or maynot have smoked when you wrote that trash.  And God, I hope you do get high and were high, because if not, I'm going to have to use the m-word.  

This blows all that drivel you wrote ---- including your book --- out the door.  You should name your blog Monopoly Money & Why It's Valuable.  I hope you golf better then you "econ."

Some people fail to understand that the law of supply and demand applies directly to the value of our money.

When wages inflate it is harder to notice this.  Now, with globalization and wages that have been flat since the 1970s as we compete against workers makeing 2 bucks a day one would have to be an utter moron not to grasp that this is a serious problem.

[Moderator's note:  This post is a violation of the forum guidelines. Personal attacks and name calling are not allowed.  Appropriate corrective action with the user has been undertaken.]

I've been trying to rationalize a way to collect Social Security and Medicare in the not too distant future, in the unlikely event that it still exists. Since being robbed by someone (government) doesn't justify stealing from someone else, I need some help here. 

SS

...almost as disappointing as the fact that no one from CM has come on here to address Rodger's points.

I don't post bc I'm here to learn, but I keep coming back to this thread and am disappointed to see no substantive replies to his point-by-point attacks.

I have read the guy's summary of monetary sovereignty - it seems silly that he suggests that people don't understand such a simple concept: We can "create" money to pay off debts without anyone else's permission, the Euros can't - therefore they can default and we can't(or shouldn't have to, in his mind).   His entire thesis seems to be based on some graphs that he claims show no correlation between deficit spending and inflation.  How these figures came about or their validity is not something I would know.

Instead of seeing other graphs to show inflation through the years and instigate some sort of "graph-off", I'd like to understand why his data may or may not be correct and/or why some other data would be more reflective of our financial history.

So, if the U.S. were to simply press a few computer keys and credit all of it's debtors with their balances, that would cause mass inflation in the U.S.?  Why, because they now have so much USD on hand that they would buy up American goods and/or investments, forcing a rise in prices?

I apologize if this seems amateur - I just really want to understand both sides.

Thanks

Getting back to the subject of the interview, my ears picked up on the bit where Marc says he has been seeing the growing wealth inequality everywhere.  I wish it were otherwise, but so far I have to agree with him when it comes to what I've seen in Mongolia.  Generally speaking, most people are a little more prosperous than they were 10 or 20 years ago, but there are some that have become incredibly wealthy compared to the norm, and the norm is still pretty poor.  It's hard to pin down any one cause.  Governmental corruption, lack of opportunities outside of the city, a society adjusting to a relatively new free market system, and sometimes simply exceptional cleverness & ability on the part of some entrepreneurs and businessmen..... I think all play a part to varying degrees.  And unfortunately, many of the wealthy think flaunting their wealth in an extravagant manner is a good thing.  One of several cultural differences I'm trying to adjust to.  I have no problem with people succeeding on their own merits, but the examples of people getting rich through corruption and growing levels of wealth inequality (and flaunting it) are definitely unhealthy from a societal point of view. 

I don't have much personal experience about China, but one of my wife's extended family who works in Beijing says the gap between rich and poor is worse (or at least more visible) there than in Mongolia.  Also, the driver who took us to and from the airport in Beijing during our recent layover there queried us both times on prices of luxury cars in America.  Apparently, there is a huge demand for luxury cars in Beijing even despite import taxes that he says amount to roughly the full value of the cars themselves.  I can't imagine myself paying full price for a brand new BMW or Lexus in America, but the idea of paying twice that much seems truly crazy.  But the status symbol is just that important apparently. 

- Nick

I totally agree that Jim H. and Grover took the time to patiently respond to Mr. Mitchell. I just went short in my posting (#16) because I spent a quick research on Mr. Mitchell, and didn't like the read or his communication skills. Plus I'm on meds after surgery and am apt to be sloppy with my commentary.

Davos, you haven't a clue about me my brother, and if hitting a white ball around the course makes me something out of a frankenstein movie then I suggest anger management classes for you. I suspect that you worry about things that you couldn't possibly understand unless you had intimate knowledge. For the record, we have never met, have spent zero time together. Many millions of low lifes such as myself do golf you know. On the cheap too. What amazes me now as I look back is you didn't scream and yell at Erik T. because he spent $57 bucks on a pot pie, and $31 bucks on a salad (you're his hero you know), plus had to leave a 20% tip, another $16 bucks and change. I could have played 4 rounds w/beer for that kind of coin. Just priorities my man, that's all. Some like to eat and some like to golf... Go Tigers

Bob

Is this sarcasm Dogs......  or has he really left us again?

Shame if he has, I was just enjoying outing morons again...

Mike