Australian (ASX) Stock Market Forum

Dr Marc Faber SPEAKS...

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From what I’ve read the US Fed can’t afford to raise rates to high or it will bankrupt treasury, to much debt in America. If they lose control of inflation it would force the Fed’s Hand which they don’t want to do really want to. Wil raise interest rates sometime in 2023?, 2024??, 2026???.
 
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From what I’ve read the US Fed can’t afford to raise rates to high or it will bankrupt treasury, to much debt in America. If they lose control of inflation it would force the Fed’s Hand which they don’t want to do really want to. Wil raise interest rates sometime in 2023?, 2024??, 2026???.
Governments secretly love inflation providing it does not reach 25% as in the UK in 1975. 7% inflation brings in more tax and if interest rates are 2% that means paying less on new debt that itself drops in real vale by 7%.
'The Budget projects that the Commonwealth government's gross debt will be around $963 billion at 30 June 2022. This is around 45.1% of GDP.'
So 10 years of 7% inflation would reduce its $963 billion debt value to $485 billion.
$963 billion x 2% interest raises the value by $210 billion over 10 years.
So $963b - $485b = $478 billion.
And $478 billion - $210 billion = $268 billion saved by the government and lost by those lending the money.

In China from 1940 to 1948 prices rose 151 trillion percent.

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German 50 billion mark note.
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500 billion note.
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Mark wallpaper notes.




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Dona Ferentes

A little bit OC⚡DC
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Mr Faber argues for investing in something because you believe in it on its own, not because of how it compares to its peers.

"For the last 20 years or so, the idea was always to maximise your profits, to outperform someone," he said.

"But how have they performed lately? Very badly.

"I think as an investor, in the current situation, you should say to yourself, 'whatever I have, I want to invest in such a way, that if Marc is right, and we have this implosion in asset prices, from real estate to stocks to bonds to everything, if Marc is right, I want to be among those who loses the least'.

"This is the strategy that I follow
."


Must be getting desperate ... on ABC Business this evening 8:45pm
 
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given the 'official inflation' rate , disappointing returns are a given ( both capital gains and div. returns ) , even worse if measured by perceived inflation

now of course those who invested early in successful companies it won't matter that much but those investing since 2020 might not be so impressed in a world of rising costs
 
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