Marc Faber Fears “The End Of The Capitalist Economic System As We Know It”
Upcoming SlideShare
Loading in...5
×
 

Marc Faber Fears “The End Of The Capitalist Economic System As We Know It”

on

  • 370 views

“We already live in a financial economy in which the debt and capital markets exceed the value of the ...

“We already live in a financial economy in which the debt and capital markets exceed the value of the
real economy by far,” Marc Faber explains to Germany’s Finanzen100, “and that’s before the current
formation of bubbles.”

Statistics

Views

Total Views
370
Views on SlideShare
367
Embed Views
3

Actions

Likes
0
Downloads
0
Comments
0

2 Embeds 3

https://twitter.com 2
http://pop.dev 1

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

CC Attribution-NonCommercial LicenseCC Attribution-NonCommercial License

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Marc Faber Fears “The End Of The Capitalist Economic System As We Know It” Marc Faber Fears “The End Of The Capitalist Economic System As We Know It” Document Transcript

    • Marc Faber Fears “The End Of The Capitalist Economic System As We Know It” Zero Hedge November 18, 2013 “We already live in a financial economy in which the debt and capital markets exceed the value of the real economy by far,” Marc Faber explains to Germany’s Finanzen100, “and that’s before the current formation of bubbles.” His most ominous warning, and one that fits perfectly with the seeming insanity of Federal Reserve (and all developed market central banks) is that “the next time a bubble bursts, then the capitalist economic system as we know will falter.” Via Finanzen100 (Google Translate), The numbers speak for themselves: In 1980, the market capitalization of the U.S. stock market was less than 40 percent of gross domestic product (GDP). The debt, measured in credit markets, was about 130 percent of GDP. Today these figures are higher, according to Marc Faber many times: The market capitalization has reached over 100 percent of GDP, the debt about 300 percent. This is consistent with figures from the consulting firm McKinsey. After calculation, the global debt still stood in 2010 at 158 ??trillion. In 2012, there were already $ 200 trillion – and rising. This makes for a worldwide economic power of slightly more than $71 trillion about three times. It is a powder keg on which we sit. In a normal real economy, said Marc Faber, the debt and equity markets are small – and there in order to steer the accumulated capital into investments. Net interest acts as a regulator. That is, there are only those made with the capital investment that is truly an attractive return, so a higher yield than fixed-income investments bring. Speculative bubbles encourage innovation However, it can also come here to the formation of speculative bubbles, as Faber points out. They are there but small, focused on little damage. On the contrary, you might even be necessary because they enabled quantum leaps in progress and can only increase the production capacity. Such a bubble bursts, then prices will fall, and so more consumers can benefit from the development. Examples give it
    • enough: Whether the railroad boom in the twenties of the last century, the Internet boom in the late nineties or real estate bubbles. When prices dropped after the bursting of a speculative bubble, it benefited from broad sections of the population. Such bubbles are therefore an integral part of the capitalist system. They promote the progress and increase productivity. But the decisive factor: In a real economy, the amount is limited to credit, as much as the real economic performance. Otherwise, with quasi unlimited credit available, investment is driven purely by liquidity – not real economics. And this is even more true when the market interest rate is distorted, as explained Cindy Sweeting of Franklin Templeton. The capital costs are no longer currently being determined by the market, but distorted by the intervention of central banks. Short-term financing costs are close to zero in nominal terms and negative in real terms. Central banks override market mechanisms The seemingly favorable debt financing and the affects it also on the decisions of the company.Incorrect or depressed capital costs can prevent new growth and lead to business transactions operate on, which should give it better. Insolvency and bankruptcies are mechanisms to ensure capitalism that no capital flows in companies that do not use it effectively. This mechanism is, however, set by the central banks suspended. “The unintended consequences of the current artificial reduction and manipulation of interest rates and finance charges are potentially very serious,” Sweeting explained: “The risk of asset price bubbles by cheap credit financing, the resolution of leveraged carry trades and the continued preference for cheap, financed on credit, investment in existing systems instead of productive and. because the capital costs are no longer determined by the market growth-enhancing investment in the creation of new facilities, many companies are able to finance subsidized low quality. ” Too much speculative and leveraged capital …in an economy driven by liquidity accept this very different proportions. The benefit that instigate these bubbles can then be significantly lower than the destroyed by the bursting of such bubbles prosperity. Because there is too much speculative and leveraged capital within the game. There are just
    • too many white elephant ‘investments made. The crises of the past decades due to Faber’s view on interest rates too low. In every crisis, but the banks increased the dose they took a more expansionary monetary policy. The patient, however, the real economy, more and more immune to it. So the doctor increased the dose and on. Although the medicine brings temporary relief, but it does not eliminate the cause. The liquidity-driven economy, it is growing like a cancer, according to Faber and on. And that will, as Karl Marx predicted, lead to the ultimate collapse that will put the foundations of our capitalist society on fire. How it will actually go out is open. Investors should nevertheless take the warning seriously, because the end result will be a violent crash in the capital markets. Taleb Blasts Bernanke And Greenspan, Warns “Debt Raises The Risk Of Catastrophe” Zero Hedge November 18, 2013 “Debt increases tail-risk,” warns anti-fragility expert Nassim Taleb, “whether it’s personal, corporate, or governmental.” A rise in debt, he warns, implies nothing less than a rise in “the risk of catastrophe,” and Taleb chides, governments “should be focused in risk-management… instead of creating these risks.” This brief Bloomberg TV clip cuts to the chase as the normally circumlocutory Taleb unloads on the perils of central banks, “Mr. Greenspan created tail risk by eliminating the business cycle,” and since then tailrisks have accumulated with debt the “number one creator of these risks.” In a fascinating phrase, Taleb notes, “corporate debt is benign,” since in failure it turns into equity, “but government debt is another matter… for it turns into inflation or worse invasion…” Reflecting on his “skin in the game” approach to risk management (forecast and over-confidence)… “Mr. Greespan and Mr. Bernanke are unharmed by their mistakes… but who is harmed – you, me, all taxpayers.“
    • On models ignorant of tail-risks “borrowing money to ‘create growth’ is an incorrect thesis – take all the ‘spurts’ of growth from the Industrial Revolution onwards, debt has been used to finance wars – not a good thing… On Keynes… “Keynes understood uncertainty all too well and would have encouraged borrowing like this” “Even Keynes would not have encouraged quantitative easing” “There is no excuse to accumulate debt on the grounds of growth” What are the elements that create the framework for the next crisis… Simply put, Taleb says governments are “painting the tape” as headline numbers may look good but the middle class is being destroyed Take 8 minutes and watch/listen to Taleb… Taleb Blasts Bernanke and Greenspan, Warns “Debt Raises The Risk Of Catastrophe” VIDEO BELOW http://www.infowars.com/taleb-blasts-bernanke-greenspan-warns-debt-raises-the-risk-ofcatastrophe/ And the infamous Black Swan of Cairo article that repressing ‘normal volatility’ for long enough creates an ever-increasing likelihood of ‘catastrophic volatility’…
    • Obamacare: The Final Nail In The Coffin For The Middle Class Michael Snyder Economic Collapse November 18, 2013 If there were any shreds of hope left that the stunning decline of the middle class could be turned around, Obamacare has absolutely destroyed them. Over the past decade or so, the middle class in the United States has been absolutely eviscerated. The number of working age Americans without a job has increased by 27 million since the year 2000, median household income in the U.S. has fallen for five years in a row, and the poverty numbers in this country are spiraling out of control. And now here comes Obamacare. As you will see below, Obamacare is causing millions of Americans to lose their current health insurance policies, it is causing health insurance premiums to explode to absolutely ridiculous levels, and it is systematically killing jobs even though the employer mandate has been delayed for a while. All of this is creating a tremendous amount of stress for millions of middle class families that are already stretched extremely thin financially. According to CNN, a survey that was conducted earlier this year found that 76 percent of all Americans are living paycheck to paycheck. Most of those families simply cannot afford to pay much higher health insurance premiums for new policies that also come with much larger deductibles and significantly increased out-of-pocket costs. Millions of those families will ultimately end up choosing to do without health insurance altogether, and that will create a whole host of new problems. This is a disaster that is so enormous that it is really hard to put into words. If the U.S. health care system was a separate country, it would be the 6th largest economy on the entire globe all by itself. And now Obamacare is going to bring the entire U.S. health care system to its knees. Obamacare: Since October 1st, The Number Of Americans With Health Insurance Has Fallen By Nearly 4 Million Last week, Barack Obama decided to allow Americans to keep their current health insurance plans for one more year. Isn’t that generous of him? Especially considering the fact that he promised us over and over that if we liked our current health insurance policies that we would be able to keep them permanently.
    • The funny thing is that Obama is not actually changing the law. So if your health insurance company allows you to stay on your current health insurance plan that does not meet the requirements of Obamacare, it is technically breaking the law. And if you continue to stay on that current health insurance plan that does not meet the requirements of Obamacare, you are technically breaking the law. It is just that Obama has promised not to enforce what the law says for one year. For a president to just blatantly disregard the rule of law is a very dangerous precedent. Do we really want the president to have the power to decide what laws are going to be enforced and what laws are not going to be enforced? That sounds dangerously close to a dictatorship to me. And in any event, there are many Americans that are not going to be able to keep their current policies no matter what Obama says. For example, just two hours after Obama announced his plan last week, the state of Washington announced that they would not be allowing insurance companies to extend their old health insurance plans if they don’t comply with Obamacare under any circumstances… State Insurance Commissioner Mike Kreidler has rejected President Obama’s proposal to allow insurance companies to extend health insurance policies for people who have received notices that their policies will be cancelled at the end of the year. Within two hours of President Obama’s news conference announcing the proposed administrative fix for Americans upset by their policy cancellations, Kreidler issued a statement rejecting the proposal. “I understand that many people are upset by the notices they have recently received from their health plans and they may not need the new benefits [in the Affordable Care Act] today,” he said. “But I have serious concerns about how President Obama’s proposal would be implemented and more significantly, its potential impact on the overall stability of our health insurance market.” “I do not believe his proposal is a good deal for the state of Washington,” Kreidler’s statement continued. “We will not be allowing insurance companies to extend their policies.” How do you think the people of the state of Washington will respond to that? Things are getting crazy out there, and the number of people that are losing their health insurance policies is absolutely stunning. According to the Wall Street Journal, so far 106,185 Americans have enrolled in Obamacare since October 1st. Most of those that have successfully enrolled have done so through the state insurance exchanges. So far, only 26,794 Americans have signed up for health insurance using the federally run exchanges on HealthCare.gov. Meanwhile, during that same time frame, 4.02 million Americans have had their health insurance policies cancelled. So that means that the number of Americans with health insurance has actually decreased by
    • 3,918,205 since October 1st. Wasn’t Obamacare supposed to result in more Americans being covered? And according to U.S. Senator Rand Paul, Obama not only knew that this would happen, he actually wrote the regulation that caused this to happen… “I’m still learning about it. It’s 20,000 pages of regulations. The Bill was 2,000 pages and I didn’t realize this until this week, the whole idea of you losing or getting your insurance cancelled wasn’t in the original Obamacare. It was a regulation WRITTEN BY PRESIDENT OBAMA, three months later. So we had a vote, this is before I got up there. The Republicans had a vote to try to cancel that regulation so you COULDN’T BE CANCELLED, to grandfather everybody in. You know what the vote was? Straight party line. EVERY DEMOCRAT VOTED TO KEEP THE RULE THAT CANCELS YOUR INSURANCE.” So now millions of Americans, including women battling cancer, are losing health insurance plans that they were depending upon. Thanks Obama? Obamacare: Skyrocketing Health Insurance Premiums How much more are you willing to pay for health insurance than you are paying right now? 10 percent? 20 percent? 30 percent? Well, according to one study health insurance premiums for men are going to go up by an average of 99 percent under Obamacare and health insurance premiums for women are going to go up by an average of 62 percent under Obamacare. And of course some groups are going to see increases that are much larger than that. For example, it is being projected that health insurance premiums for healthy 30-year-old men will rise by an average of 260 percent. Ouch. And there are some families out there that have already been hit with health insurance premium increases that are absolutely jaw-dropping. In a previous article, I included the example of one family down in Texas that has been hit with a 539% rate increase… Obamacare is named the “Affordable Care Act,” after all, and the President promised the rates would be “as low as a phone bill.” But I just received a confirmed letter from a friend in Texas showing a539% rate increase on an existing policy that’s been in good standing for years. As the letter reveals (see below), the cost for this couple’s policy under Humana is increasing from $212.10 per month to $1,356.60 per month. This is for a couple in good health whose combined income is less than $70K — a middle-class family, in other words. Obamacare: Enormous Deductibles And Huge Out-Of-Pocket Expenses For All It isn’t just health insurance premiums that are going up either. Deductibles are going up too. In fact, just check out what one survey of Americans living in seven different states recently discovered… Expenses for some policies can reach $6,350 for a single person and $12,700 per family,
    • the most allowed by the health-care law, according to a survey by HealthPocket Inc. of seven states, including California and Ohio. That’s 26 percent higher than the average deductible in the seven states, and a scenario likely repeated across the country, said Kev Coleman, head of research and data at Sunnyvale, California-based HealthPocket. That same article has a great quote from an elderly New Jersey resident. 82-year-old Larry Saphire thinks that if you have to pay a $5,000 deductible up front, “you might as well not have any insurance at all”… “If you have to pay $5,000 upfront” when illness hits, “you might as well not have any insurance at all,” said Larry Saphire, 82, of West Orange, New Jersey, who shopped for coverage for his wife and two children, ages 16 and 21. “That’s not insurance.” On California’s state-run exchange site, the standard low-premium “bronze” plan carries a $5,000 deductible per person, a $60 co-pay to see a doctor and a 30 percent fee, known as coinsurance, on hospital care. In Rhode Island, Blue Cross Blue Shield’s bronze plan has a $5,800 deductible while Missouri’s U.S.-run exchange offers plans by Anthem Blue Cross with the maximum-allowable $6,350 in out-of-pocket costs. Obamacare: The Quality Of Care Is Going To Go Into The Toilet A lot of Americans that are signing up for Obamacare are going to be in for a huge shock. Many of the best hospitals and many of the best doctors are not covered by their plans… Meanwhile, sometime between March and June, the other shoe drops: People who bought exchange policies realize that the restricted networks insurers created to keep the premium costs low cut out the best hospitals and doctors. A newly insured child with cancer cannot get into a top pediatric hospital because her insurance has zero coverage for out-of-network emergency care. Tearful Mom goes on the evening news and says that she thought when they went on Obamacare, that meant they were safe, and why can’t I take my baby to Philadelphia Children’s Hospital, Mr. President? Can you imagine being a parent in that situation? In response, some hospitals are already filing suit over this. For instance, check out what is happening over in Seattle… Seattle Children’s Hospital filed suit against Washington State’s Office of the Insurance Commissioner this week, after Obamacare implementation caused the hospital to be cut from four of the six insurance plans offered by the new Washington Health Benefit Exchange. And even if you are on Medicare that does not mean that the quality of your care is going to stay the same either. As Reuters just reported, UnitedHealth is dumping “thousands of doctors” from their Medicare Advantage plans for the elderly because of Obamacare… UnitedHealth Group dropped thousands of doctors from its networks in recent weeks, leaving many elderly patients unsure whether they need to switch plans to continue seeing their doctors, the Wall Street Journal reported on Friday. The insurer said in October that underfunding of Medicare Advantage plans for the elderly could not be fully offset by the company’s other healthcare business. The company also
    • reported spending more healthcare premiums on medical claims in the third quarter, due mainly to government cuts to payments for Medicare Advantage services. In the United States, we already pay much more for health care than everyone else in the world, and we typically have to wait longer to see a doctor than most of the rest of the industrialized world does. Now Obamacare is going to make all of this even worse, and the quality of the care that we receive is going to go downhill fast. Obamacare: The Jobs Killer A while back, Obama unilaterally made the decision to delay the implementation of the employer mandate until 2015. That was probably a good political decision, because it would have been a huge political issue in the 2014 elections. But the truth is that we won’t have to wait until 2015 for Obamacare to start killing jobs. In fact, according to CNBC it is already happening… Approximately one-third of business decision-makers at companies with between 40 and 500 employees, say the health-care law has already increased their costs due to hikes in both the cost of insurance and compliance, according to a recent report from politicalresearch firm Public Opinion Strategies. As a result, many business leaders say they are already making personnel decisions based on the Affordable Care Act. Among franchised businesses, 27 percent report their company has replaced full-time workers with part-time workers and 31 percent have reduced worker hours. Among nonfranchised businesses, 12 percent are replacing full-time workers with part-time workers or reducing hours. This is happening now, with more than a year before the mandate goes into effect; and undoubtedly, these numbers will rise as we approach next July’s “look back” period for tabulating workers’ hours. It is kind of startling that we are already seeing employers make such big changes even though the employer mandate does not come into effect until 2015. You can find a very long list of some of the employers that have already either eliminated jobs or cut hours because of Obamacare right here. Remember, this is just the tip of the iceberg. Once we get closer to the deadline things are going to get much, much worse. At a time when the middle class desperately needs jobs, Obamacare is going to slaughter them. And even if you are able to keep your current job, that does not mean that your health plan will remain the same. In fact, Forbes is projecting that a staggering 51 percent of all employment-based health insurance plans will be canceled and replaced with new ones. Overall, Forbes is projecting that an astounding 93 million Americans will eventually lose their current health insurance policies due to Obamacare. Obamacare: Providing Huge Incentives For Many Americans To Work Less And Make Less Money Did you know that Obamacare is going to cause millions of Americans to want to keep their incomes under certain levels? If you make too much money under Obamacare, you will miss out on some absolutely massive health
    • care subsidies. The following is an excerpt from one of my previous articles… —– The figures that you are about to see were calculated using the Kaiser Family Foundation subsidy calculator. These numbers apply to a husband and a wife that are both 62 years old. A non-smoking, married couple living in San Francisco, California earning $63,000 a year will have to pay $20,318 a year for a silver plan under Obamacare and $12,647 a year for a bronze plan. At $63,000, that couple would be making too much money to be eligible for a subsidy, so that couple will have to pay the total cost of whatever plan they choose by themselves. But if that couple only made $62,000 a year, things would dramatically change. The plans would still cost the same, but the couple would now be eligible for an Obamacare subsidy of $14,428. So a silver plan would end up costing them only $5,890, and they would ultimately pay nothing for a bronze plan. In other words, by reducing their income by $1,000, that couple would save $14,428 if they got a silver plan or they would save $12,647 if they got a bronze plan. Isn’t that bizarre? In the end, millions upon millions of middle class families will decide to go without health insurance entirely for one reason or another. This will work great until they get into an accident or become seriously ill. As I have discussed previously, approximately 60 percent of all personal bankruptcies in the United States are related to medical bills. And most of those bankruptcies actually happen to people that are supposedly “covered” by health insurance. Obamacare is going to make all of this so much worse. Millions of middle class families will end up with no health insurance at all, and because so many of them are living paycheck to paycheck a single health emergency will be enough to send them hurtling down the path to financial oblivion. If you get into an accident, a visit to the emergency room and a single night in the hospital can easily cost tens of thousands of dollars in many areas of the country. If you get a serious illness such as cancer, the medical bills can be absolutely astronomical. For instance, there are many cancer patients that rack up medical bills well in excess of a million dollars by the time that they die. Something desperately needs to be done about our horrible health care system. Unfortunately, Obamacare is going to make just about everything that is bad about our current system much, much worse. And the American people are becoming increasingly disgusted and frustrated with Obamacare. According to Real Clear Politics, an average of recent opinion polls shows that the American people are opposed to Obamacare by an average margin of 14.2 percentage points. So what do you think about Obamacare? INFOWARS.COM BECAUSE THERE'S A WAR ON FOR YOUR MIND