Marc Faber Takes on Krugman, Links Bernanke and Mugabe
Recently by Marc Faber: The Frame of Mind of American Economic Policymakers
by Alex Frangos
Economic provocateur Marc Faber joined a chorus of commentators picking on Paul Krugman's recent state-of-economics magazine article.
Mr. Krugman “thinks it would be very good to have another bubble in the world and deal with it later on,” according to Mr. Faber. Mr. Krugman, the columnist and Nobel prize winner, has advocated a strong government stimulus and big deficits to jumpstart the economy.
Mr. Faber, a Hong Kong-based investor and author of the Gloom, Doom & Boom report, suggested Mr. Krugman's piece, entitled “How Did Economists Get it So Wrong,” missed the mark. There wasn't “a single word about excessive credit growth” in Mr. Krugman's article, he said. “He should have written ‘How did I get it so wrong?'”
Mr. Faber's view is that the collapse was due to the massive increase in credit stoked by the Federal Reserve. The Fed and academic economists such as Mr. Krugman failed to acknowledge that the borrowing boom would create economic chaos, he said.
Mr. Faber was speaking at the CLSA Asia Pacific Markets investor conference in Hong Kong. It's the same event Sarah Palin spoke Wednesday.
Mr. Faber, is, to put it mildly, a pessimist. “You can't find anyone more negative about the world than I am,” he said. “But stocks can still go up,” thanks to continued printing of money. He actually expects stocks overall to rise around 7% a year over the next decade, though in places like the U.S., much of that return will be eroded by inflation, brought on by the increase in the money supply.
September 28, 2009
Dr. Marc Faber [send him mail] lives in Chiangmai, Thailand and is the author of Tomorrow's Gold.
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