The First Worldwide Bubble in Everything

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Marc Faber the Swiss fund manager and Gloom Boom & Doom editor said the US Federal Reserve managed, through stimulus, to do something that had never before been done — create a worldwide bubble in just about everything — stocks, bonds , housing and art.

The only thing that didn’t go up was the dollar, according to Faber.

Speaking to the 10th Annual Agora Financial Investment Symposium in Vancouver this week, Faber said: “You cannot create prosperity through money printing and debt growth.”

Faber preached an idea that became the theme of the event: Government fiscal and monetary intervention, “can postpone, but not prevent crisis.

“I believe next year’s economy will face even larger deficits. Their deficit is attempting to stimulate credit growth. Unless real credit growth returns, they will have to put more and more money into the system to maintain the status quo. All polices target consumption. That is a mistake,” Faber said.

So what’s this mean for the market? “The S&P 500 will not recover to 2007 highs. At the peak, 44% of the S&P was the financial sector. That is gone… not coming back.”

"In the period, 2001—2007, the Fed managed to do something that had never before been done — create a worldwide bubble in just about everything. Stocks, bonds, art, oil, housing — you name it; it went up. The only thing that didn’t go up was the dollar," Faber said.

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Dr. Marc Faber [send him mail] lives in Chiangmai, Thailand and is the author of Tomorrow’s Gold.

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