Faber Exposes Unprecedented Perils of Our Currency Crisis

According to Dr. Faber, there are some rather dire unintended consequences associated with the U.S. currency crisis.

Moreover, Marc Faber asserts that downward spiraling inflationary trends all across the globe maintain a direct correlation with the Federal Reserve's money printing policies.

While we're all aware of the danger of printing too much fiat money, Faber stresses that the world's fiat currencies are in greater danger than any of us realize...

Here's how Faber views inflation:

If you start to print, it has the biggest impact. Then you print more — it has a lesser impact, unless you increase the rate of money printing very significantly. And, the third money-printing has even less impact. And the problem is like the Fed: They printed money because they wanted to lift the housing market, but the housing market is the only asset that didn’t go up substantially.

In general, I think that the purchasing power of money has diminished very significantly over the last ten, twenty, thirty years, and will continue to do so. So being in cash and government bonds is not a protection against this depreciation in the value of money.

Additionally, Faber explains how the Fed can't possibly forecast the economy with accuracy because they are “academics,” and have “never worked a single day in their lives.”

Essentially, they lack the experience to understand the big picture.

They aren't businessmen balancing books; they don't go shopping and spend time at the local pub; they don't need to sell products or services to make a living for themselves... The are paid by the government and lack an insider's understanding of the way the U.S. economy truly functions.

Perhaps this is why they print money and their naive idealism lets them believe it will bring wealth back into our nation.

Unfortunately, that's simply not true. If it were, every country in the world would thrive in prosperity and live happily ever after.

There are no Utopian societies. Printing endless amounts of paper money won't change that fact.

And the unintended consequences of firing up the printing presses time and again will lead to unprecedented hardships in America — and across the globe.

Again, Marc Faber tackles this issue stating:

We know one unintended consequence, and this is that the middle class and the lower classes of society, say 50% of the US, has rather been hurt by the increase in the quantity of money in the sense that commodity prices in particular food and energy have gone up very substantially. And, since below 50% of income recipients in the US spend a lot, a much larger portion of their income on food and energy than, say, the 10% richest people in America and highest income earners, they have been hurt by monetary policy. In addition, the lower income groups, if they have savings, traditionally they keep them in safe deposits and in cash because they don’t have much money to invest in the first place. So the increase in the value of the S&P hasn’t helped them, but it helped the 5% or 10% or 1% of the population that owns equities. So it's created a wider wealth inequality, and that is a negative from a society point of view.

Amidst extreme currency devaluation, this crisis has the potential to lead to malinvestment which will, in turn, create asset bubbles that'll explode in chaos when the bubbles burst.

Meanwhile, the lower classes will embark on a treacherous journey as they are unfairly punished by the printing frenzy.

All of these factors considered, it's very likely our nation will undergo risky and volatile social and political dilemmas if this market manipulation ensues...

Capitalism would be a breath of fresh air for America right now, but the Fed is slowly taking that way of life away from us during present tumultuous economic times.