You have to hand it to Marc Faber; he knows how to grab your attention. Earlier this year, I posted a video of him saying “don’t underestimate the power of printing money", a quote that has become mantra for me. Basically, he believes a rising tide of quantitative easing is going to buoy stock markets globally and the global economy (at least for the medium-term). This is a view I agree with and one reason I have taken a more bullish tack at Credit Writedowns.
Earlier today, I also posted a video of Faber talking about Nouriel Roubini and the pressure not to overstay a bearish call and miss the turn which I found rather interesting (Here’s a video of Roubini sounding rather bullish – for him). However, later in that same interview, Faber makes his most quotable statement yet: “I am 100% sure that the U.S. will go into hyperinflation.” That is a very bold claim.
Just last week, I made similar comments in my post, “More thoughts on the fake recovery.”
In my view, the Federal Reserve has effectively demonstrated it is willing to risk hyperinflation in order to beat back the deflationary forces.
But I was using hyperbole. Faber, however, is dead serious. It is the secret desire of the Fed to want inflation that has U.S. government bond yields going berserk. But, most people are not expecting hyperinflation in the United States ever.
The video of Faber is below. Is this headline-seeking exaggeration or serious punditry?
Source: U.S. Inflation to Approach Zimbabwe Level, Faber Says – Bloomberg.com