Marc Faber - 2011 Jan 12 v2

Introduction: Welcome to Crash Concepts where the economy, energy and environment are explored. Up next fresh ideas and insights into the factors that are driving the world that are shaping your future. Presenting information you cant afford to live without, heres Chris Martenson. Chris Martenson: Hello, and welcome to another ChrisMartenson.com podcast. Im your host Chris Martenson and today we welcome a very special guest: Dr. Marc Faber. Dr. Faber was born in Zurich, Switzerland and now lives in Thailand and has offices in Hong Kong. Dr. Faber publishes a really, very widely read monthly investment newsletter, The Gloom, Boom and Doom Report, which highlights unusual investment opportunities and is the author of several books including Tommorrows Gold: Asias Age of Discovery published in 2002, right at the beginning of the age of discovery there. Just fantastic timing. And speaking of timing, in 1987 he warned his clients to cash out before Black Monday on Wall Street. He made them handsome profits by forecasting the burst of the Japanese Bubble in 1990, correctly predicted the collapse in U.S. gaming stocks in 1993 and hes just been ahead of the curve every step of the way. His company Marc Faber Limited acts as an investment advisor concentrating on value investments with tremendous upside, often based on contrarian investment philosophies. He also invests and acts as a fund manger to private wealth clients, and was former Managing Director of Drexel, Burnham and Lambert. Welcome, Marc. Dr. Marc Faber: Thank you.

Chris Martenson: One of the criticisms of an empire is that, almost by definition, it lacks the ability to see itself clearly. I see you as having the most essential characteristics required to shed light on the United States. Youre a deeply invested insider with an outsiders perspective. But more than that youve demonstrated an incredible ability to think and perceive independently. To see where others are caught up on dangerously profitable groupthink. I want to begin at the center of the story, the United States, before moving out to the rest of the world. And in the very center of the U.S. lies the Federal Reserve itself: the Fed has been expanding its balance sheet by some $1.5 trillion since the crisis began and are now expanding it by a further $75 billion a month for the next six to seven months. So what are your views on these actions? Are they necessary, disruptive, ultimately more toxic than helpful - or something else? Dr. Marc Faber: Well, basically, first of all thank you for having me on your show. But, secondly, I think that the governments intervention into the free Market created the problems in the first place and we certainly have to view the Federal Reserve as having intervened into the free markets by keeping interest rates artificially low for far too long between 2000 and 2007. So their intervention at the present time is actually nothing new, its just larger in terms of scale and if you go back to the Federal Reserve starting with the early 80s, each intervention whether it was flooding the system with liquidity to save the S&L institutions or save Mexico in the Tequila crisis or LTCM in 1998 and so each intervention became larger and larger and created more misallocation of capital. And I think this will also be the case today. Chris Martenson: So these interventions - weve just gotten further and further off the track. So you would say that todays interventions, I mean are these just par for the course, its just a continuation of a trend that began in the 80s under Green Span or do you see these

Marc Faber - 2011 Jan 12 v2 Dr. Marc Faber: Yes, I think the Federal Reserve has openly admitted and written on several occasions that they cant identify bubbles but these bubbles burst, they can intervene with extraordinary monetary measures to support asset markets, to prevent essentially a deflation or a recession from happening and that leads to very A-symmetrical monetary policy. In other words, you let bubbles happen like the housing bubble, and you have to say you have to wonder what the Federal Reserve was thinking about home prices going up so much and about credit between 2000 and 2007, expanding at five times the rate of nominal GDP. They also let the NASDAQ bubble happen. They couldnt see that it was a bubble when NASDAQ stocks sold at 80 times earnings. They were taking about the huge productivity improvements and support and so on. So if there was one institution in the U.S. that consistently and repeatedly messed up every thing, the Federal Reserve is that institution. Chris Martenson: So they do, they lie at the center of all of this in my mind as well.

Dr. Marc Faber: To a large extent, yes. I am not saying that everything is due to Federal Reserves policies because even under a gold standard you could have a bubble. Say in the 19th centaury when there were the gold discoveries in the mid-west and in California, you had boomtowns and when canals were built there were booms, same for railroads and so forth, but usually under a gold standard you have a bubble under one sector of the economy but you dont have it across the board globally and thats really what the Federal Reserve has done over the last couple of years. Chris Martenson: Well so theyve exported bubbles and lets be fair: I think the ECB and other major central banks have gone along with the program. Dr. Marc Faber: Correct. I mean, Im not singling out the Federal Reserve as the only central bank that prints money. But certainly they are the leader lets say. They are the most aggressive in terms of expansionary monetary policies compared to others we could say. In Indonesia if you trade money then the currency collapses, then import prices go up, and you have an automatic essential adjustment that hasnt really taken place in the United States. Chris Martenson: Right, right, so theres one view then that says the Federal Reserve cant see bubbles thats the story they like to put out. But theres another story that might go like this: which says the Federal Reserve is a serial bubble blower. They actually need bubbles, they know exactly what theyre doing, and now we could look at their purchase of assets as just an attempt to keep assets inflated. Dr. Marc Faber: Yeah, I think to be fair the Federal Reserve, I have to say that this bubble blowing is not just the intention of the Federal Reserve but actually Wall Street was also encouraging bubbles because, remembering 2001, Mr. Krugman was arguing that the housing bubble would actually help the U.S. economy when in fact, thereafter the housing bubble destroyed the U.S. economy. And again in 2009 Mr. Krugman wrote that another bubble would be desirable at the present time and the consequences of which one could see at a later stage. So actually, the Federal Reserve is not the only one that is guilty of easing monetary policies. Everybody enjoyed it because everybody was minting money during the boom market in equities and in bonds. Chris Martenson: Well, I want to ask you then because youve got the perspective on this that perhaps few have. My grandfather actually served on the New York Federal Reserve Board under Paul Volcker at one time. And way back when and I can guarantee you - if my grandfather were

Marc Faber - 2011 Jan 12 v2 alive today he would not recognize the decisions that are being made or how the Fed is operating. He came from a very solid staid banking background and so Im wondering if am I just romanticizing? Was the Fed engaged in the same policies back then as they are now; or did something shift fundamentally over the past 10 or 20 years? Dr. Marc Faber: Well, I think to be fair the Federal Reserve offered its foundation in 1913 has essentially always pursued relatively expansionary monetary policies with one exception that stands out and that was the period Paul Volcker 1979-1980 when he pushed the discount rate to over 20%. A very courageous move I may add; but in general if you look at the price level in the U.S. in 1900 compared to 1800 and you look at real per capita increases between 1800 and 1900, then I have to say that the economic expansion under a gold standard essentially in the 19th century was stronger than in the 20th century when the Fed was in existence. And what happened is in the 20th century the price level as you well know and as everybody knows has gone up dramatically in terms of how much it costs you to fill the tank of your car. How much a movie ticket costs, how much a pound of bread costs, and so forth and so on. And so really the policies of the Federal Reserve have always been inflationary. And I would say every central bank that essentially has the control of over the quantity of money will in the long-run ensue inflationary policies. Maybe temporary, occasionally, they tighten the monetary policies, but actually in the U.S. we didnt have tight monetary policies now for 10-20 years. Chris Martenson: The Fed I think is not quite as firm on this as the Bank of England. Bank of England has a stated target: 2% inflation, so theyve put it right out on the table. Theyve said, were going to for it, we want inflation this much, not more, not less and I think that the Fed is Dr. Marc Faber: Yeah, but do you understand its very difficult to define inflation. The Federal Reserve essentially targets core inflation. Core inflation has nothing to do with your cost of living increases. And as you know the basket of goods and services that are used to measure inflation can be weighted in such a way that things that go up a lot like health care costs, insurance premiums, energy, in this regard entirely and other items where prices are deflating like a T-shirt are over-weighted. Chris Martenson: yeah, that really

Dr. Marc Faber: I have a large readership for my newsletter and website and I ask to please send me an email if anyone has the impression that their costs of living increases were less than 5% per annum So far I havent received a single email. Chris Martenson: I dont think youd get any emails from anybody whos listening to this either. And inflation varies, it depends on your circumstances, so if you have a child about to enter or in college Dr. Marc Faber: Absolutely, absolutely, every household has a different inflation rate. All I can say is maybe I buy at the wrong places and I travel in the wrong airplanes and stay at the wrong hotels but my costs of living are going up every year. Chris Martenson: yeah, they absolutely are and we should also note that the official measure of inflation does not include taxes. The entire cost of government

Marc Faber - 2011 Jan 12 v2 Dr. Marc Faber: Yeah, absolutely, and in that hidden taxes, namely fees that you pay to the government and in any event I dont believe that any one of your listeners who will have a wife tell them: listen, you can give me less household money because prices are down. That I dont believe. Chris Martenson: well try that sometime. I think youre right. So we have the theme then is that we actually have a lot of inflation. I mean if you look at a basket lets take the entire continuous commodity index and start in 2002 until today: its been going up over double digits on a per annum basis. Dr. Marc Faber: Yes, of course, and also a symptom of inflation is when the currency weakens and a symptom of inflation is the explosion in international reserves, which have grown from a trillion dollars in 1997 to now over $9 trillion. These are all symptoms of inflation and we have to define inflation as an increase in credit and in the quantity of money. And everything else are symptoms as inflation can manifest itself in a global economy in Vietnam where prices are going up lets say 12% to 15% annual rate. In India and China where prices are going up by at least 10% per annum. So when you print in the U.S. it doesnt necessarily have to inflate the housing market. That shows the futility of U.S. monetary policies. U.S. monetary policies were designed by the ranking basically to list home prices but this hasnt gone up. Other things have been inflating, namely, like oil and food prices, which then hurt the consumer when the policies are actually designed to help the consumer. Chris Martenson: Well is there

Dr. Marc Faber: I mean Mr. Bernanke often said - and I hate to essentially be outspoken in this way because I think hes quite a decent fellow - but hes just ignorant of economics and hes a victim of his ill-conceived monetary theories. Chris Martenson: so hes running a big experiment and how do you see this experiment playing out? So from my perspective I have the inflation deflation debate it rages and Ive written recently that we should, Im italicizing that word as I speak it, we should be in deflation but were not. Dr. Marc Faber: We should have been in deflation after 1980 because the Kondratieff peaked out in 1980 or in the mid-seventies to the eighties and then we have a downward wave in commodity prices and declining interest rates. That is the time we should have had deflation. But now that commodity prices are turning up its more likely that we are in a very high inflationary environment and the reason I have this debate with the deflation is not so much that they believe in deflation and that I believe in inflation - but their conclusion to buy U.S. government bonds in a deflationary environment is, of course, a disastrous recommendation because if you really have the credit collapse, the deflationists are arguing about, then obviously tax revenues will collapse and the fiscal deficit will go to the moon. I mean, Tim Geithner just signed the treasury report about the budget deficit about the financing of the U.S. for 2010. The deficit was not $1.4 trillion but $2 trillion signed by him. And so the government debt goes up and up and up and up and then the interest payments from the government go do go up and the quality of government debt goes down and so eventually you have a junk bond in the U.S.. I believe the U.S. government bonds are junk already today but as long as you have rating agencies that are dreaming and publishing reports that are completely useless, people still buy the government bonds in the U.S.

Marc Faber - 2011 Jan 12 v2 Chris Martenson: Well, let me play a slight devils advocate on this. So right now the Federal Reserve is buying about 100% of all the new Treasury issuances for maybe the next six or seven months. Dr. Marc Faber: Chris Martenson: Yes. Cant they just keep doing that forever? I mean what would

Dr. Marc Faber: They can keep doing that forever and obviously then the currency depreciates over time and interest rates go up over time. But they can do it for a very long-time. And at some stage you go into a hyperinflation environment. Im not saying that hyperinflation is around the corner but with this policy youre moving a step closer to a danger zone. Chris Martenson: So theyre increasing the risk, we cant be certain but obviously the risk is now higher than it was two years ago? Dr. Marc Faber: Much higher. I would also say that the financial position of the U.S. today - if you look at the unfunded liabilities, if you look at the external liabilities, and so forth and so on, its of course much, much worse than 10, 15, or 20 years ago. Chris Martenson: Well, they actually I think if we did an accrual basis which weve been adding $3, $4 trillion a year to the overall overall negative position on that Dr. Marc Faber: Absolutely, absolutely. The governments debt including Fannie Mae and Freddie Mac, by the way another intervention by the government into the free market that had disastrous consequences. I mean basically everything the government has touched in the U. S. has been a complete failure. From the post office to monetary policies to fiscal policies. You want to have a consistent track record of complete failures? Look at the U.S. government. Chris Martenson: Dr. Marc Faber: Chris Martenson: Now tell us how you really feel [laughing] I beg your pardon? I said tell us how you really feel about that one.

Dr. Marc Faber: Well, I think its a wonderful experience because it shows that the private sector tends to do things better. They dont do it perfectly well but at least in the private sector when something goes wrong then an institution or a corporation goes bankrupt then the system is cleaned. The worst part of government intervention is that they dont let their own failures appear and instead of letting big companies go bust and clean the system, they go and support them and this is unfair to the strong competitors because capitalism is all about the survival of the fittest and about people who make or take wrong decisions being punished through losses. Chris Martenson: I agree with all of that and I think its corrosive to the markets because participants like myself start to look at it and say this is not free, its not fair how is it possible that the bond holders of Citi didnt take a single penny of losses. This just doesnt feel right and worse investing is about taking your best shot, doing due diligence, figuring out the fundamentals. But were all speculators if we have to sort of guess what the governments going to do next, who

Marc Faber - 2011 Jan 12 v2 theyre going to bail out, how much money the Feds going to throw in, because those are unknowable. You can do all the due diligence you want but you cant predict any of that. Dr. Marc Faber: Right. In particular its unfair because there is a revolving door between some financial institutions and the government. So your access to information is, of course, much, much worse than the access of information of the big financial institutions. And so you have a marketplace that is completely unfair. Chris Martenson: Right. So let me get to the punchline. So the way that Ive been analyzing this myself, it sounds like you might agree, is the unfunded liabilities plus the current fiscal structure, the deficit structure, how much mandatory spending is already baked in the cake compared to total economic output which is what tax revenues come in from. Theres this enormous mismatch between revenues and expenditures. Dr. Marc Faber: Right.

PART II BEGINS HERE ++++++++++++++++++++++++++++++++++++++++++++

Chris Martenson: How does this resolve itself?

Dr. Marc Faber: Well, I would imagine that the resolution will be more money printing because thats the easiest thing to do and over time money printing leads to a huge increase in wealth and income inequality: where by the smart operators, the rich people, the well-connected people can make a lot of money. Its like in war times. You have the parasites that can make a hell of a lot of money in war times but it impoverishes essentially the population and the same happens when you print money. And then, you move into an environment where there is a very high distrust between the population and the government. Theres a state within the state and thats the government. And the people are unhappy and then when everything fails through money printing usually the government has to look for someone to blame for the unpleasant economic realities. And then frequently they either blame a minority, like in Africa the Indians or in Indonesia the Chinese and so forth. And when everything fails these countries tend to go to war. And the U.S. is already at war. Because in war times its not important to winning the war, whether you win or you lose a lot of people make a lot of money out of war times. Chris Martenson: so as I recount the steps. You say the steps forward are money printing, we can check that one off right? So were thats already Dr. Marc Faber: Yes, were there.

Chris Martenson: were there. Wealth inequality: I think certainly looking at the record revenues for Wall Street and how banks are still Dr. Marc Faber: Chris Martenson: Sure, were also there. yeah, Neiman Marcus is doing really well right now.

Marc Faber - 2011 Jan 12 v2 Dr. Marc Faber: Yes, I can imagine.

Chris Martenson: So, the wealth inequality is already afoot. Impoverish the many; I think that certainly many of the people who are out of work now and out of benefits would start to agree with that one. And so were somewhere down this list, where then people become unhappy, government blames someone Dr. Marc Faber: Chris Martenson: Correct. go to war, and of course, war is enormously destructive.

Dr. Marc Faber: Plus the U.S. doesnt have the money to do it. Except through printing. I mean when the U.S. went into World War II we didnt have unfunded liabilities. Debt to GDP was 140%. Now we have 379% debt to GDP; then you add 600% of unfunded liabilities as a percent of GDP. So youre up to something like 800% of GDP. The U.S. simply cant afford a major confrontation. Chris Martenson: So very important question then: why is it that the leaders in D.C. and Wall Street, why dont they see it this way? Dr. Marc Faber: Well, I mean you know I travel extensively and the U.S. is a very big continent and a lot of people they dont travel. They havent been overseas. They dont recognize the fact that say 20 years ago or 30 years ago there was a huge difference between Los Angeles, San Francisco, Miami, New York and Sao Paolo and Shanghai and Ho Chi Min and Singapore and Hong Kong. And today its not that the U.S. has necessarily declined a lot, some sectors have already declined a lot like manufacturing and the auto sector and of course other sectors have come up that we also have to recognize but the fact is simply that other countries have caught up with the United States and are now today as advanced as the U.S. is. Chris Martenson: Right and thats a view that I think is just critical that you carry into this conversation because, again, sometimes empires or big companies have trouble with that insight, the introspection. Dr. Marc Faber: Yeah, and there is also kind of an inbred arrogance in the United States. Im not saying uber alles. In other words a super power that knows best and does the best for the world and supports and so on. When in fact, I think that the U.S. is probably a better kind of global leader than the Chinese or the Japanese or the Germans but I think they also made a lot of mistakes and they antagonize many countries and so the prestige of the U.S. has been badly damaged. First, by Mr. Bush and now even more so by Mr. Obama. Chris Martenson: Dr. Marc Faber: Even more so? I think so, yes, definitely. That definitely.

Chris Martenson: You know I had a conversation from somebody from Europe recently and I was really querying about how they were viewing the U.S. and they just stopped me and said actually were not talking about you guys all that much anymore.

Marc Faber - 2011 Jan 12 v2 Dr. Marc Faber: I was yesterday at a conference and then somebody said to me well, the U.S. is still the largest economy in the world and so forth but I said, the U.S. is about 20% of global GDP; but not in the goods markets. In the goods markets you know countries like China are much larger than the United States. It just happens that in the U.S. 70% of consumption are services. So when you talk about the quantity of mobile phones, countries by the quantities of cars, of refrigerators, China is much larger than the U.S. And the U.S. still perceives the whole world to depend on their consumption which is not true because a lot of the consumption in the U.S. as I just mentioned 70% are services that doesnt touch really, foreign countries, its only the goods markets that are important in the trade flows. And therefore I think the U.S. tends to overestimate its power,its economic power. Chris Martenson: Well, thats a really excellent point. I hadnt thought of it that way. I was caught a little bit off guard when the International Energy Agency last year reported that China overtook the U.S. in gross energy consumption. Thats a big moment. Dr. Marc Faber: Well, I mean in the developed world energy consumption has gone down and on a per capita basis the U.S. consumes, of course, 10 times more oil than China on a per capita basis and 20 times more than India. But, of course, for the first time in history you have car sales in emerging economies that exceed car sales in the developed world and for the first time in capitalistic history you have oil consumption in developing countries, in emerging markets exceeding oil consumption in the developed world. Its logical 80% of the people in the world live in emerging economies. Chris Martenson: oil? Yeah, great point. I have to ask this question: do you have a view on peak

Dr. Marc Faber: Well, its very clear that every oil field eventually runs dry. That every for that you dont need to be a rocket scientist to know that. And the fact is simply that every year the world adds less reserves than it consumes oil. So of course the level of oil in the world is declining. Now there are new sources of oil that will come up but they are very expensive. I would imagine that the marginal costs of finding an additional barrel of oil is around $70 a barrel and so the people that think that oil will drop to $10 or $30 they may be right but that would only be temporary because then all oil exploration would cease and I have figures that show that of the existing oil production, of the existing oil fields - whether these are the fields in Saudi Arabia and so forth and so on - there the production is going down of course. Chris Martenson: Theres a theme here however we slice it. But from a market standpoint the theme is oil prices are going to go up. Or remain elevated. Dr. Marc Faber: Well, I think that oil prices will go up and I think that oil is for two reasons right at the expense its interesting first of all, the oil demand in the developed world has just started to turn up again. And in the emerging world it was continuing to rise, so theres some near term pressure on the demand side. But secondly, if you believe that one day there will be major confrontation of war then obviously oil prices and energy prices will go ballistic. So I think from two sides that energy is quite attractive. If you are very pessimistic like I am: I want to be in energy related investments and, of course, also in precious metals. And also, if youre optimistic about the world and if you think that there is a recovery or crackup boom, then you should be long oil and other energy related investments.

Marc Faber - 2011 Jan 12 v2 Chris Martenson: And if we see a theme of generally other tight supplies or rising up oil prices do you think the emerging economies are they more exposed or less exposed than say the United States or developed countries to this phenomena? Dr. Marc Faber: Well, I mean if you have a per capita income like in India or in Vietnam of a $1,000 U.S. per year then obviously food and energy is a larger component of your income than say if youre the Goldman Sachs partner and you earn $100 million a year. Unless, of course, you are using a private plane then your oil consumption is quite high, too. But as they say for normal people who have high income, food and energy is a small component. Whereas for the middle class and lower classes and workers to heat their homes and drive the car to work, which they have to do because if they cant drive car to work, they cant go to work. So for these people actually higher energy prices are penalizing their discretionary consumption. In other words the consumption on necessities go up and the consumption on discretionary items goes down. Chris Martenson: slightly. Dr. Marc Faber: Yes, all right, so were getting towards the end here. I want to switch gears

Yes.

Chris Martenson: And youre on recording as predicting hyperinflation as a possibility, maybe currency collapse, so first of what would change your view point on that? Dr. Marc Faber: I would have to see a serious credit contraction. In other words a situation where the private sector reduces the outstanding credit. In other words theres a period of deleveraging and not just deleveraging in the financial system because what weve had is a lot of deleveraging in the financial system but not deleveraging in the economy. And the deleveraging in the financial sector has been offset by the deleveraging of the government. So if one day, say the U.S. Government decided to have a balanced budget I can guarantee you if they implemented that balanced budget from today/tomorrow and keep monetary policies tight, then youll have deflation. But the likelihood of this happening is very, very small in my opinion. I mean in my opinion its actually impossible to do it. Because the mandatory expenditures are so high. Theres a lot of expenditures you cannot cut. Chris Martenson: Right, interest on the debt for instance, very hard to cut that. Youre going to pay you have to pay the interest. Dr. Marc Faber: you break the law. Chris Martenson: Dr. Marc Faber: Chris Martenson: out for this year? Yeah, you cannot cut the pensions. I mean these are legal obligations unless

Or change the law, yeah. Yeah. So what do you see as the key developments for 2011? What are you looking

Dr. Marc Faber: Well, basically I mean a lot of volatility will happen in my opinion. The sentiment on the stock market is on the bullish side and the inflation trade is on and people buy

Marc Faber - 2011 Jan 12 v2 commodities and this and that and for sure will have a correction at some point. No doubt and maybe will peak out and then have a severe setback in market. But say that Dow or S&P drops 15%, 20% you will have QE3 and so forth and so on, so I think youll have a lot of volatility and I would rather think that if you really believe in the ultimate disaster you will be better off by being in precious metals and in some commodities, in farmland, and in equities than in U.S. government bonds and in cash. Now its conceivable that cash is desirable for the next three months and so forth but in general I think for the next ten years you dont want to be in U.S. government bonds and you dont want to be in cash. Chris Martenson: So were going to see more volatility this year, we have

Dr. Marc Faber: I think so, yes, very high and I think maybe the market will actually surprise initially on the upside because you know I talk really to a lot of people at conferences and so forth and everybody was expecting a correction and a lot of people have reduced position. If the market keeps on going up, these people have to reverse and go back into the market again and buy equities. And so the market could actually overshoot and then you have an intermediate top or even a longerterm top and then you go down again. Chris Martenson: Right so theres more volatility partially driven by the fact that theres all this liquidity, its sloshing around, its Dr. Marc Faber: Chris Martenson: Dr. Marc Faber: Chris Martenson: Dr. Marc Faber: Chris Martenson: Absolutely. its distorting Absolutely. markets. A lot of liquidities around. Yes, it distorts all the markets and

Dr. Marc Faber: Sure, also I dont know how to value anything if you have interest rates at zero. How do you value stuff? Chris Martenson: Dr. Marc Faber: Right, without the market setting prices for things you get Absolutely.

Chris Martenson: you get all kinds of distortions and so and then theres structural political, even cultural reasons that we would expect more printing as the outcome if theres any weakness we might expect QUE3, so really thats continuation. Youre expecting a continuation of 2010, 2009. The basic polices weve seen, no change there? Dr. Marc Faber: Yes, I think when you keep on doing the same thing again and again and you expect different results as the Federal Reserve is doing then its a clear sign of insanity.

Marc Faber - 2011 Jan 12 v2 Chris Martenson: I would agree. So weve come to the end. Is there any last parting words of advice? Something very important to you that Ive not touched on? Dr. Marc Faber: I think its very important for investors to understand that there is very little visibility because as you pointed out of the government interventions you have to essentially give up being a top analyst and become more of a political analyst and that introduces a high level of uncertainty and I would just tell everybody to be well diversified. To have some stocks, to have some precious metals, to have some cash and maybe come corporate bonds and also to diversify the custody of assets; not to keep everything under custody in the U.S. but have some money outside the U.S. Chris Martenson: Very sage advice. I think thats all fabulously good advice and so I want to thank you very much for your time. Its been a Dr. Marc Faber: Well, I thank you for having me on your program.

Chris Martenson: its been my pleasure and Im sure our listeners are going to have lots of comments about this and so I would love to maybe talk to you again at some point but this has been very illuminating and I wish to thank you and wish you all the best. Dr. Marc Faber: My pleasure, thank you very much. Bye-bye.