Alex Jones’ Prison Planet.com » Marc Faber: “I Think it Might Be Far Worse [Than the Great Depression] Precisely Because of the Interventions” by the Government

Marc Faber: “I Think it Might Be Far Worse [Than the Great Depression] Precisely Because of the Interventions” by the Government

naked capitalism
Tuesday, Jan 13, 2008

The latest edition of Marc Faber’s latest newsletter fell off two separate trucks in my ‘hood, and I thought the most useful bits were Faber’s observations (honed from many years of seeing the world from Asia) that just because a market has gone down a ton doesn’t mean it can’t go down a great deal further.

Some choice tidbits:

The S&P 500, adjusted for inflation, is at its highest level ever, save for the 1995-2007 period. By contrast, at the market bottom in 1974, the S&P, adjusted for inflation, was lower than it was in 1906. In 1974, the market cap of all stocks was 31% of GDP versus 100% now, and the Dow yielded 6% and was at a marked discount to book value.

The 1974 rally, while powerful, ended in 1976. Stocks resumed their fall and hit their inflation adjusted low in 1982.

The Dow chart above makes some of the same points.

Faber concedes an equity rally is still possible, which he thinks would lead to a reversal in gold, which he argues would make for a buying opportunity. In general he prefers the risk/reward ratio in commodities to that of stocks. He also recommends selective buying of Asian equities, with the caveat that prices could fall further in 2009.

(Article continues below)

From his conclusion:

I am far from certain that US equities, which have declined by about 50% from their highs, are such a a bargain. Valuations are far from where they werea at major market lows such as in 1932, 1974, and 1982. Moreover, economic conditions may turn out to be far worse than in previous recessions, including the Great Depression at the beginning of the 1930s. Everybody seems to think that, thanks to the government’s monetary and fiscal interventions, this recession will come nowhere near the 1930s slump. However, I think it might be far worse – and precisely because of the interventions.

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17 Responses to “Marc Faber: “I Think it Might Be Far Worse [Than the Great Depression] Precisely Because of the Interventions” by the Government”

illegalhunter Says:
January 13th, 2009 at 5:36 am

Just history repeating it self

annie Says:
January 13th, 2009 at 6:41 am

No, it is because the “government”/elite are causing it this time. Read Rise of the fourth reich as history is quite the lesson for sure. Annie

pitofdoom Says:
January 13th, 2009 at 9:42 am

If “we the people” suffer NOT the loss of food & shelter, economic collapse is rather trivial & a meaningless distraction of our day !

Zero Bama Says:
January 13th, 2009 at 10:05 am

why can`t we listen to the daily show on windows media player?
this flash player 10 doesn’t work everywhere, need administrator to install software, WMP is available everywhere you log in.

please rectify this.

Rob in CT Says:
January 13th, 2009 at 11:27 am

Can’t non-productive government downsize instead of spending money it doesn’t have?

Then they could give us all a tax decrease which will help boost productivity.

I could sure use the extra money.

mr. spock Says:
January 13th, 2009 at 3:19 pm

bailout money going to save govt jobs, not private-sector jobs-except of coarse union jobs.there isn’t enough paper to print the money to cover the losses (at least 500 trillion). hello ww3 &/or martial law-FEMA camps

Once Again Says:
January 13th, 2009 at 4:29 pm

Once again this sites promotes deregulation and small government in order to give power to the corps. Anyone wanting more deregulation and blaming the meltdown on government intervention is simply insane and a complete idiot. The problem was caused because the free market was allowed to do whatever it wanted. Just like with the problems with pollution. Just like most problems found around the world. The corps want to destroy government so that laws and regulations will not hinder them. Even innovation is stifled when the corps are allowed to do whatever they want. Improvement in efficiency in all our products is due to government regulations which forced the corps to evolve. The good idea of marxism eventually devolved into evil communism and the good idea of capitalism eventually devolved into evil corporatism. Listening to alex jones and his mindless army of idiots is just like listening to die hard communists still wanting to bring communism back. Both systems are evil and discredited and they were never pure. So once again alex jones and his cronies want you to hate government and love the free market. This is double speak and a deception because the reason the government does not work is because it is controlled by the corps. It works perfectly, only for them. Anyone wanting to fix this problem by making government smaller must have the intelligence of a chimp. By making government smaller, you give the corps exactly what they want. They want you to hate government to make it smaller so they can swoop in and fill the power vacuum. Alex jones zombies seem to be patriotic and if this is so, why do they want to give their freedom away to the corps? Everyone that has died defending the US in the past 300 years did not die to give power to the corps, they died defending the country and its democratic government of the people and for the people. By siding with small governments and the corps, you are spitting on the flag and spitting in the face of every soldier who has ever died defending freedom. They did not die for the freedom of the corps to do as they wish. Government needs to be bigger and free of corp[orate and religious control. alex jones leads to religious corporatism.

mr. spock Says:
January 13th, 2009 at 5:52 pm

hey, who allowed this govt-lover in here(onceagain), since everyone here in usa is in debt over their heads( govt., corp.s and individuals) the answer is for all to cut spending in line with their lower income levels. not everyone cut back except for govt. you are the one who is mindlessly repeating barry-o’s mantra that only govt. can save the day. go to mises.org for your education on the austrian school of economic thought

Once again Reply:
January 13th, 2009 at 7:45 pm

Do you try to be dumb or is it natural to you? You completely fail to see that the government is controlled by the corps and the corps gave themselves the bailout. You are so stupid that you cannot even see that. Thus you will want the government to be smaller and less powerful and then the corps will be even more in power. You either are dumb or a shill. How someone cannot see that basic truth about corporate controlled government is beyond me. If you have a separation of church and state and market and state, then and only then can things work out. So in your mindless universe you fight for freedom by taking power away from the democratic government and you will give it to the totalitarian corporate structure. wow…you really are wallowing in the shallow end of the gene pool.

Seriously? Reply:
January 14th, 2009 at 12:50 am

Insulting people is a great first step towards credibility.

The government is only enabling the corps… Blaming our economic situation on the free market is probably the silliest thing you’ve said in your misinformed rants. You talk about deregulation helping them… which means that we are currently regulated… which means that we are not in a free market… so don’t try to blame free markets. Regulation and free markets are opposite from each other. You speak of a separation of market and state… I agree, unfortunately… the government you support more of stands for the opposite of this philosophy (separation = free market).

The corps are destroying government… using the dollars you give them to buy it up and make it larger. You said it yourself, “the corps gave themselves the bailout” – SOMETHING THAT WOULD NOT HAPPEN IF WE HAD A SMALL GOVERNMENT THAT WASN’T INFESTED WITH CORPORATE LOBBYISTS.

By the way… your posts are double speak… If the government works so perfectly for the corps… how will making it smaller (RETURNING TO ITS CONSTITUTIONAL LIMITS) help them?
You should look up Fascism while you troll around the internet looking for places to spout off your misinformed opinion.

Never mind the fact the out troops have died to defend our REPUBLIC (which is one of small, limited government and personal rights – read The Constitution), I find your word choice in this line rather interesting, “democratic government of the people and for the people”

Government OF the people? I always thought it was BY the people. It seems like you are suggesting that someone else is in control? Maybe if we didn’t have so many places (offices of the government) for the corps to stick their cronies in, maybe it would truly be government BY the people, for the people.

Learn the facts before you try to criticize others and look stupid.

Once Again Reply:
January 14th, 2009 at 1:24 am

You really are one ignorant prick. Dergulation of everything started in 1981 under Reagan and was finished off under Bush. Do you have any grasp at all on political history? Do you not also know that Reagan also gave the corps the power to control and flat out lie in the media?

You sir seem like you are of the uneducated kind. Before starting to correct make sure you have firm ground to stand on. If you have small government, that means no regulations which means the corps step in where they want and control the show. It means the middle class not getting a break since Reagan came to power in 1980. It means that the middle class is shrinking because the corps are siphoning off everything. You want to shrink government so the corps will not control it which in turn means the corps have more free reign. are you insane? do you think before you post? An even smaller government would in turn be more easily controlled and in turn more power to the corps. You really have to be a half wit not to see this. But I guess we find all sorts on these posts.
As for my posts being double speak. You idiots all speak the same. You throw that word around like many other words without even knowing what they mean. As for fascism, there are many definitions (around 12). You do not know to whom you speak.
I bet you do not want free health care for everyone and free education. I bet you are against social security. I bet you are against many things and think the free market should deal with it. If that is the case then you are as blind idiotic and obsessive as the remaining hard line communists in the world. The free market does not work in the way it was supposed to work. The government should take care of its people. That is what governments are for!!! Just like the market is there to create and manufacture things. They each have there role The people should regulate the government and the government should regulate the market. In a world of selfishness and corruption, letting the market run free is a recipe for disaster and disaster capitalism loves that. It thrives on stopping people down to then help them back up.
Seeing the few comments you made and how completely idiotic they are, you should give up on political thinking because you basically are a sheep. especially if you listen to either alex jones or ron paul.

mr. spock Says:
January 13th, 2009 at 5:58 pm

sorry to get off topic. but marc faber’s article is what i read over on mises.org. these bailouts are indeed making the situation worse, with the lowering of interest rates and printing presses running 25 hrs a day, the dollar is on its way to the dustbin of history. can you say amero, translation: can you say bend over. buy gold, buy silver, buy ammo

.DJ.O.R.B. Says:
January 13th, 2009 at 6:44 pm

MORE GOOD NEWS !!!

FCUK O”BAAAA”MA BIN LADEN & HIS ZIO-NEO-SCUM-BLOOD-SUCKERS !!!

* LYNDON H LaROUCHE …4… PRESIDENT *
* ALEX JONES ..4….. VICE-PRESIDENT *
* ALAN WATT ……4…. SECRETARY-OF-STATE *
* PETER SCHIFF ….4….. TREASURY *

INFO-WARRIORS ………………………………………. IT’S REVOLUTION TIME

Myron Says:
January 13th, 2009 at 7:04 pm

Look at that Double Top chart pattern…almost perfect. TIMBER!!! The market’s gonna keep falling.

Antifraud Says:
January 13th, 2009 at 10:53 pm

I still call them robberies, not interventions.

Steve Says:
January 14th, 2009 at 4:44 am

Thanks for posting this excerpt. I watch all the Faber clips I can. I love his insights. Even when the news gets too depressing and I shut it out I still make time for Marc. He also has a great sense of humor.

dma Says:
February 11th, 2009 at 8:09 am

I will gladly give you two hamburgers tomorrow for a hamburger today …