Marc Faber: Beware of The Unintended Consequences Of Money Printing

Interview with Marc Faber and Chris Martenson (March 16,2012) about the unintended consequences of money printing by central banks.

First they discuss about the Greek default which does not matter according to Marc Faber, then they focus on central banks, the fact that they will never reduce their balance sheets as they have embarked on the path of money printing, and how the lower purchasing power of money particularly affects low and middle income people.

When Chris Martenson mentions the high price of oil, Marc Faber explains that consumers of Oil (mainly western economies) are suffering, but producers (Russia,. Saudi Arabia...) are benefiting.

Finally, they talk about Gold and Silver. Everybody should own precious metals as an insurance policy against a financial meltdown. Gold is not particularly expensive according to Marc Faber, although he still think we are in a correction phase. Having said that he won't sell his Gold as long as Obama (or a republican) is in power because they won't address the problems.
Marc Faber eventually sees the full financial system become an MF Global (he said some people got all their money whereas some didn't) and for that reason you should keep your Gold in a safe deposit, not in the US, but rather at some airports such as Singapore.

Eric Sprott: The Financial System is a Farce

Sprott Asset Management published their monthly newsletter Market at Glance (January 2012) entitled "The Financial System is a Farce: Part Three".

This month, the newsletter is shorter than usual with 3 pages. Eric Sprott and David Baker explain that 2011 was a year with more bailouts, more kicking the can down the road and more denial.

Eurozone is not fixable,  there’s too much debt and the politicians don’t know what’s going on. Nothing has structurally changed. There’s more global debt than there was a year ago, and it’s the same old song: extend
and pretend, extend and pretend,…

After October 2007 and September 2008, its' the 3rd time Sprott Management says the Financial System is a Farce (hence the title) and they re-affirmed their bearish views on the economy and markets.

In 2011, they found four farcical (but not funny) events:

• MF Global bankruptcy with  US$1.2 billion of missing customer funds and the CME did not act as a backstop.
• Dodd-Frank financial reform aka "Too Big to Fail" regulations signed in 2010 has barely been implemented in 2011 (e.g. CFTC positions limits)
• Europe and the European Central Bank (ECB) with another bailout (LTRO) and the states who lend to banks with the banks lending back to states.
• National Defense Authorization Act (NDAA), not directly a financial issue, but when you make investments 'Political risk’ should also apply  in the US (and other developed countries)  and not only in developing or third world countries.

The full version of the newsletters is available at http://www.sprott.com/Docs/MarketsataGlance/2012/January-2012.pdf