“100% sure” that the inflation rate will soar
Wednesday, May 27, 2009
A prominent PhD economist has warned that The US economy will be subject to rampant “hyperinflation” at levels rivaling those in Zimbabwe if the Federal Reserve refuses to raise interest rates.
Marc Faber, founder and managing director of Hong Kong-based Marc Faber Ltd., warned Bloomberg News that prices may increase at rates “close to” Zimbabwe’s gains.
“I am 100% sure that the U.S. will go into hyperinflation,” Faber said. “The problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate.”
Faber is well respected for accurately predicting both the financial crash of 1987 and the current crisis.
He has previously slammed the bank bailouts and has argued that fiscal stimulation will not work because the financial crisis was caused and prolonged by government intervention in the first place.
His latest prediction hits home when you consider that the inflation rate in Zimbabwe has risen to 231,000,000%, effectively rendering the country’s currency worthless and prompting it to print a bank-note worth Z$100bn, from which you’d be lucky to get change for a loaf of bread.
Hyperinflation has left at least 80% of the Zimbabwean population in abject poverty, facing mass shortages of basic goods.
Faber advised buying gold and told viewers he was adding to his gold investments.
Watch the full 5 part interview with Marc Faber below or a summary of his comments here:
(ARTICLE CONTINUES BELOW)
This article was posted: Wednesday, May 27, 2009 at 6:33 am