Marc Faber: Massive Wealth Destruction Coming Down The Line (CNBC Video)

via CNBC
Marc Faber, editor and publisher of the "Gloom Boom Doom" report, shared his gloom and doom views on the market and economy in an interview with CNBC's Andrew Ross Sorkin this morning on Squawk Box.

"Well, basically I think that the whole bailout and the money printing will not create long-lasting wealth, nor will it create healthy economic growth. And if I look at the world, then i see essentially well-to-do people that have done unbelievably well and I see the middle class and working class that hasn't done well. And I think somewhere down the line we will have a massive wealth destruction that usually happens either through very high inflation, or through social unrest, or through war, or a credit market collapse. Maybe all of it will happen but at different times."

"I would say that well-to-do people may lose up to 50% of their total wealth. They'll still be well-to-do; instead of a billion, they'll have say 500 million. But, I think there is a massive wealth destruction coming down the line. I'm not saying it's coming tomorrow, but looking at the bailouts and the money printing, they have postponed the problems and actually made them larger in the sense that the government debt has increased dramatically, and somewhere a solution will have to be found for this government debt."

"I think we have to think realistically that the debt contraction basically has been postponed, but huge debt is still there and still growing. You look at, say, student loans. I don't believe that all the student loans will be repaid, ever."

"I'm not necessarily saying hyperinflation will occur but I think that we can have first inflation in asset prices, as we had in the last 20, 30 years and then that asset prices will come down like the real estate market came down in the united states for residential homes. And what will be the trigger you never know for sure."

Quotes are guided from the CNBC transcript.

Faber also shared his views on land, equities, gold, and the U.S. dollar during the segment. And apparently he said he was bullish on Japanese equities in 2012 on Bloomberg TV (via Ritholtz). Related interview: Marc Faber Is Convinced The Derivatives Market Will Cease to Exist (Video).


  1.  The future financial years seem real scary to every nations of the world and the pace in which country debts are increasing is simply adding to this fear of economic breakdown. Governments from every nations have to take highly effective monetary reformative steps to combat the critical situations which are going to prove painful for the middle class.

  2. Concerned Senior CitizenApril 3, 2012 at 3:02:00 PM EDT

      As a retiree (and an Economics major) I have been watching as the impact of the various stimulus programs have affected our two major expense items: gasoline and groceries.  Although there has already been obvious inflation-- some disguised as smaller packaging for the same price-- it has been gradual, but that may be about to change.
        We went shopping today in our favorite discount grocery store and my wife commented that nearly evrything was marked up.  For instance, a can of black beans which two weeks ago was 59 cents was now 65 cents.  That's roughly a 10% price boost in just two weeks, and nearly every item was priced higher than when we last went shopping for groceries.  We can-- and have-- changed our driving habits to offset the rising price of gasoline, but we haven't figured out a way to eleminate eating. 
       We are totally debt free, thank God, but still feel the pinch of rising prices across the board as contrasted with a nearly static income stream.  We are in the stock market and have some hard assets, as well as a well stocked pantry, but still have a concern about the long term prospects of the US economy.  I feel that we, though not wealthy by any measure, are prepared for any "black swan" event that may trigger an economic meltdown.  But in the larger long term view things could get pretty rough for the middle class, and most especially for those who are living paycheck to paycheck (or retirement check to retirement check).
      In a nutshell, the middle class is getting a royal screwing, especially those of us who worked, scrimped, and saved so as to enjoy a secure retirement.  Obama may be a friend of the welfare class and the unions, but he's no friend of us retirees!  Calling planned inflation "quantitative easing" is akin to calling a fatal disease a "mortality adjustment!" 

  3. Unfortunately politicians are compelled to "fix things". It's political suicide to do nothing, and they know they're better off making a good show of doing something wrong than doing nothing and being accused of not helping.

    So here we are in 2012, facing the combined consequences of years of government "help"...

  4. He expresses the thought and comments of many of us "retirtees". Obama has never felt the pinch that we have and therefore has no sympathy for any of us.

    All those welfare class people have it better than many proud retirees because we have never been brought up to expect others to pay our way. When the day comes when all welfare recipients are required to show everything they receive from all of the sources they use and then maybe we can give them what they deserve and not everything they want.

    I volunteer at a food pantry and find people week after week coming to get food while they go to 4 other pantries  on the other days of the week and use letters from the food stamp office to verify their addresses. Many then sell the pantry items to get unreported income. At the pantry we are not allowed to turn anyone down for any reason bu edict from the Federal government. That edict has just been handed down in the last month. Before that we could refuse clients who were a part of a family in the same household. Mom or Dad comes in and claims a family of 8. One of the other members of that family can now come in and claim a family of 8, exactly the same people and twice, or maybe even 8 times as much food as an honest family.

  5. PREPARED Senior CitizenApril 4, 2012 at 8:05:00 PM EDT

      When it hits the fan and all government programs stop working there will be a few weeks of turmoil as the welfare calss starts to get hungry, then finds out just how well prepared we old vets are!  It's just a matter of time and the US will be like Germany after WWI with massive inflation; the difference is that the US has such  a large percentage of the population totally dependent on handouts, with no reserves, no food, and no skills.  Hunger is the great motivator, and there will be pitched battles in the streets as the dependent class attempts to overcome those who have had the foresight to be prepared for bad times. 
      Welfare for the truly needy-- the handicapped, the temoprarily unemployed-- is a correct response for charitable agencies and government, but those of us who have been taxed to the hilt all of our working lives are getting pretty annoyed by a government which buys votes with handouts and perpetuates cascading generations of welfare kings and queens. 
      The next few years in the US will be interesting, for those who survive! 

  6. Obama and his cronies are no different than Bush and his.........I personnaly think they are one in the same............And Congress are and have been for years...nothing but treasonous tyrannts who have filled their pockets and destroyed America............There should be 10 to 20 million marching on Washington with hangmans noose in hand.

  7. Break a leg . . .


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